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Foxtel Posts Record Numbers As Streaming Becomes Focus

Foxtel has posted some mighty number for the September quarter, with total subscribers up 18 per cent on the prior year, just a hair off the four million mark at 3.97 million.

The big lift in the group’s fortune comes from impressive uptake in its various streaming service. Total streaming subscribers across Kayo Sports, Binge, and Foxtel Now has reached 2.2 million, up 68 per year-on-year.

Streaming now makes up 53 per cent of Foxtel’s total subscribers, a watermark result proving the decision to pivot from a purely ‘residential’ satellite-based service to the world of streaming has been a hugely successful one.

In addition, as News Corp CFO Susan Panuccio pointed out, broadcast churn (the amount of people migrating away from satellite-based subscriptions) improved, declining to 14 per cent from 14 per cent last year and 17.1 per cent in the June quarter.

“In the aggregate, total paying streaming subscribers were up more than 69 per cent to nearly
2.1 million, and total streaming subscribers, including trialists reached over 2.2 million,” Panuccio explains.

Breaking this down further:

– Kayo reached 1.08 million subscribers, up 59 per cent.
– BINGE reached 885,000 subscribers, up 176 per cent
– Foxtel Now reached 239,000 subscribers, down 23 per cent.
– Foxtel residential and commercial broadcast subscribers were 1.77 million, down 5.2 per cent.

Foxtel’s EBITDA during the September quarter was A$154 million, up a whopping 46 per cent compared to the previous year.

Panuccio points out that this lift was “primarily driven by US$34 million [A$43.2m] of lower sports costs, benefiting from the US$36 million [A$45.9m] of negative impact seen in the first quarter of fiscal 2021 related to deferred sports costs from the fourth quarter of fiscal 2020.”

Revenues for the December quarter were up 3 per cent year-on-year, to A$688.6 million.

Average revenue per person also rose by 3.8 per cent, to A$81.70, based mostly of Foxtel’s premium brand positioning.

“For the second consecutive quarter, growth in Kayo and Binge revenues clearly offset the not unexpected modest decline in retail broadcast revenues,” News Corp Chief Executive Robert Thomson said.

“It’s worth noting that Subscription Video Services Segment EBITDA rose an impressive 46 per cent in the first quarter,” he added.

Looking forward, Panuccio notes that the Foxtel Group’s offerings have only continued to improve.

“Product innovation continued with the launch of iQ5, an IP-enabled set-top box, the announcement
of plans to partner with Comcast and Sky on the launch of Sky Glass, and the launch of a third
streaming product, Flash, a dedicated live news streaming service featuring more than 20 local and
global live news services.”

Panuccio does note that during the current quarter, costs are expected to be higher, “most notably for Entertainment and Sports rights, as well as some higher marketing to support the launch of Flash.”

Costs for the full year, however, are expected to be “relatively stable”.




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