- During the coronavirus, News Corp’s streaming services performed very differently.
- Foxtel’s subscriber base contracted to fall below 2 million once again.
- Kayo and Binge, meanwhile, made up for the decline – adding nearly 400,000 subscribers between them.
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As coronavirus forces Australians to spend more time at home, their viewing preferences are clear.
With News Corp announcing their financial year results on Friday, including a $US1.5 billion loss, it appears people have voted with their feet on the company’s subscription businesses.
Subscription video services, made up primarily by Foxtel, recorded a 14% decline in revenue. While News’ numbers don’t drill down any further, Foxtel’s decline would be responsible for a significant part of the US$205 million which just evaporated.
This year Foxtel was hit by a sporting hiatus that suspended a decent portion of its offering, bar Australian horse racing which was allowed to continue unabated. It was enough to see its subscriber base contract, falling below 2 million once more. This was partially offset by the lower cost of sporting rights and production costs as COVID-19 brought things to a halt.
Interestingly enough, News’ emerging sports streaming service Kayo appears to be a whole lot more resilient. After shedding around 135,000 subscribers by May, Kayo managed to bounce back with a fury as Australians sought some much-needed sporting reprieve from their homebound humdrum.
In the final three months of the financial year, it managed to greatly expand its paying subscriber base from 331,000 to 542,000.
So too has News Corp’s streaming service Binge managed to get a decent foothold. Launched in March at the outbreak of the pandemic, the Netflix competitor has attracted 185,000 subscribers.
The two fledgling subscription services have proved rare bright spots for the company, which despite that growth saw subscriber numbers decline by 12%.
The international media giant is battling a broadly challenging media environment, sustaining a 19% hit to earnings as advertising dollars dry up. Despite all that, it appears investors had anticipated worse. News Corp stock rose 5% in early trade on Friday.
Even still, the company is now acutely aware of which parts of the business are and aren’t kicking goals.
- Binge and Kayo are Foxtel’s last ditch effort to win a new generation after a difficult and troubled history with streaming
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