News Corp posts 26pc jump in dig­i­tal growth

The Weekend Australian - - BUSINESS - DAR­REN DAVID­SON ME­DIA ED­I­TOR

News Corp has signed up more dig­i­tal sub­scribers in an era of “fake news” with the group’s Aus­tralian news­pa­pers record­ing a 26 per cent jump in the most re­cent quar­ter.

The group re­ported 389,600 dig­i­tal sub­scribers in the three months to De­cem­ber 31, from 309,200 in the same pe­riod a year ago, as read­ers showed re­newed com­mit­ment and pub­lish­ers at­tracted new sub­scribers.

“It is cer­tainly in the in­ter­ests of our share­hold­ers that there be a dig­i­tal re­ori­en­ta­tion to­wards qual­ity and in­tegrity, and that more peo­ple are en­cour­aged to pay for pro­fes­sional jour­nal­ism,” News Corp chief ex­ec­u­tive Robert Thom­son said.

“There is a so­cial and com­mer­cial value to jour­nal­ism, but that value needs to be val­ued by the dig­i­tal pub­lish­ing plat­forms. The bot-in­fested bad­lands are hardly a safe space for ad­ver­tis­ers, whose brands are be­ing tar­nished by as­so­ci­a­tion with the ex­treme, the vi­o­lent and the re­pul­sive.”

At The Aus­tralian, dig­i­tal sales ac­count for more than half of to­tal paid sales af­ter a pick-up in growth last year pushed sales past the 100,000 mark.

“The Aus­tralian con­tin­ued to grow dig­i­tal sub­scribers, cross­ing the 100,000 mark for the first time,” Mr Thom­son said on a call with an­a­lysts. “Sig­nif­i­cantly, more than 50 per cent of its paid week­day vol­ume is now dig­i­tal.”

News Corp Aus­tralia’s gain in dig­i­tal sub­scribers con­tin­ues a pe­riod of solid growth en­joyed by the group’s Bri­tish and US ti­tles in the sec­ond quar­ter amid con­tin­ued in­ter­est in the new ad­min­is­tra­tion of Pres­i­dent Don­ald Trump and the pro­lif­er­a­tion of “fake news”.

The Wall Street Jour­nal posted a 29 per cent in­crease in dig­i­talonly sub­scribers to ap­prox­i­mately 1.4 mil­lion.

Dow Jones, pub­lisher of The Wall Street Jour­nal, is near­ing a short-term goal of 3 mil­lion to­tal sub­scribers, with 2.8 mil­lion sub­scribers to the unit’s con­sumer prod­ucts in the quar­ter. The Times and Sun­day Times con­tin­ued to gain mar­ket share, with dig­i­tal sub­scribers up 20 per cent ver­sus the prior year.

Dig­i­tal rev­enues now rep­re­sent 29 per cent of News and In­for­ma­tion Ser­vices seg­ment rev­enues, com­pared with 26 per cent in the prior year.

Over­all, News Corp re­ported a 3 per cent in­crease in rev­enue in the quar­ter, driven by sus­tained dig­i­tal growth, pos­i­tive cur­rency fluc­tu­a­tions and the dig­i­tal real es­tate busi­ness.

For the three months ended De­cem­ber 21, the com­pany posted rev­enue of $US2.18 bil­lion ($2.8bn), com­pared to $US2.12bn in the prior cor­re­spond­ing pe­riod. The rev­enue gain was also boosted by the ac­qui­si­tions of Aus­tralian Re­gional Me­dia and Aus­tralian News Chan­nel, op­er­a­tor of the Sky News chan­nels, as well a $US47 mil­lion pos­i­tive im­pact from for­eign cur­rency fluc­tu­a­tions.

The com­pany recorded a net loss of $US66m com­pared with a loss of $US219m in the same pe­riod a year ear­lier, and a loss of US14c a share, com­pared with a loss of US50c a share in the prior year.

The rev­enue was slightly ahead of es­ti­mates from an­a­lysts polled by Bloomberg at $US2.13bn. Aus­tralian-listed shares in News Corp ended 0.6 per cent higher at $20.51.

The news and in­for­ma­tion­ser­vices busi­ness, which ac­counts for just un­der twothirds of the com­pany’s top line, re­ported a flat rev­enue of $US1.3bn.

“The ro­bust first-half re­sults high­light the virtue of our strat­egy to be­come in­creas­ingly dig­i­tal and global, the dis­ci­pline of our fi­nan­cial man­age­ment, and our com­mit­ment to premium con­tent and high­qual­ity, high-in­tegrity news,” said Mr Thom­son, not­ing that first-half rev­enues were up 4 per cent and prof­itabil­ity im­proved by 27 per cent.

The dig­i­tal real es­tate busi­ness, the com­pany’s main profit driver, re­ported a 21 per cent gain in rev­enue to $US292m, driven by con­tin­ued traf­fic growth at REA Group’s realestate.com.au and Move’s re­al­tor.com.

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