News Corp has released their most recent financial results, indicating the cancellation of live sport has seen Kayo lose roughly 136,000 paying subscribers.
As of March 31, 2020, Foxtel’s total closing subscribers were 2.933 million, an increase of 1% compared to the prior year, primarily due to subscriber growth at Kayo, partially offset by lower broadcast subscribers at the onset of the COVID-19 pandemic.
As of March 31, 2020, there were 444,000 Kayo subscribers, of which 408,000 were paying subscribers, compared to 199,000 subscribers the year prior.
As of May 2, 2020, there were over 272,000 paying Kayo subscribers, indicating a drop of 136,000 as a result of the cancellation and postponement of almost every major sport in the entire world due to COVID-19.
Despite this drop, which was understandably expected without the existence of live sport on the subscription video service, News Corp has managed to report increased numbers in digital subscribers, contributing to higher profitability in its News and Information Services segment.
News Corp chief executive, Robert Thomson, said the impacts of COVID-19 are being felt right across the industry.
“We are operating in a different, difficult time,” Thomson said.
“Every business and family is facing challenges and our thoughts, in particular, are for those who are suffering deeply and personally from the impact of COVID-19…
“Despite the onset of COVID-19, and particularly volatile, adverse currency movements, profitability was relatively stable.
“Notable, profitability was higher at the News and Information Services segment, fuelled by significant digital advertising and subscriber growth at Dow Jones, including The Wall Street Journal, which reached approximately three million subscribers in the last week, a new record, with over 2.2 million that are digital only…
“Clearly the pandemic will have an impact on our results in the fourth quarter, but all of our businesses are embarking on cost-cutting programs intended to deal with short-term need but also to ensure that the Company is well equipped to prosper in a decidedly different business environment after the crisis abates,” he said.
Closing digital subscribers at News Corp Australia’s mastheads as of March 31, 2020, were 613,300, compared to 493,200 the year prior, while The Times and Sunday Times reported closing digital subscribers of 345,000 as of March 31, 2020, compared to 286,000 the year before.
Overall, News Corp reported, across their subscription video services, revenues for the quarter decreased by $77 million, of 14%, compared with the year prior, of which $38 million, or 7%, was due to the negative impact from foreign currency fluctuations.
Across the entire company, News Corp reported revenue of $3.5 billion for the three months leading to March, down 8% from the previous year.
With more results likely to be published for the third financial quarter from competing media organisations over the coming weeks, it will be interesting to see how News Corps’ 8% revenue drop measures up across the industry.