News Corp Earnings Down Across The Board Despite Jump In Subscribers

News Corp has reported some pretty sobering results for its fourth financial quarter of the year and for the whole of its 2023 fiscal year.

Total revenues were down nine per cent year-over-year for Q4 and down five per cent year-over-year for its entire 2023 fiscal year.

Its subscriptions video services saw a four per cent drop in revenue in Q4 and over the course of the whole financial year, despite the number of paying subscribers growing by five per cent. For advertisers, a growth in News Corp’s SVOD user base is heartening, though the company should be trying to turn this user growth into corresponding revenue growth.

The company’s news media function fared even worse. It saw a nine per cent drop in revenue in Q4 and a six per cent drop over the course of the financial year. This is despite News Corp Australia increasing its number of digital subscribers to 1,059,000 at the end of the quarter (943,000 for news mastheads), compared to 964,000 (882,000 for news mastheads) in the prior year.

News Corp blamed a lot of its shortfall on the lack of an extra week in the financial year — quite where this extra week appeared from is unclear. For its news media function, the company reckoned that it missed out on some US$36 million (AU$55.3 million) in revenue as a result — though this would still have left a US$22 million (AU$36 million) drop from the previous year.

“News Corp’s Fiscal 2023 results highlighted the durability and depth of our revenue streams and the impact of stringent cost controls as we navigated challenging macro conditions, supply chain pressures and currency headwinds,” said News Corp chief exec Robert Thomson.

“Our results showed marked improvement in the second half, so with inflation abating, interest rates plateauing and incipient signs of stability in the housing market, we have sound reasons for optimism about the coming quarters.”

Still, this earnings cycle marked an important turning poting for the company as digital accounted for half its revenues for the first time ever.

“That momentum is surely gathering pace in the age of generative AI, which we believe presents a remarkable opportunity to create a new stream of revenues, while allowing us to reduce costs across the business. We are already in active negotiations to establish a value for our unique content sets and IP that will play a crucial role in the future of AI.”

News Corp staff were reportedly “blindsided” by its use of AI to produce some 3,000 articles per week and only learnt of its use in The Guardian.

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