Foxtel Struggles, Profits Fall 17%
Struggling to compete up against the likes of Netflix and Fetch TV Foxtel has reported a $17 million-dollar loss.
Net income fell from $52M to $24M revenues fell 3%, at the same time the value of News’ 50% stake in Foxtel dropped to $US1.2 billion ($A1.57 billion) from $US1.4 billion ($A1.84 billion) because of the competitive environment in the Australian pay TV market and management’s revised projections for the Pay TV network that is struggling to attract subscribers up against a low-cost Netflix and Stan.
In the second quarter, cable and satellite churn was 15.6%, which the Pay TV Company said was primarily driven by newer customers under no-contract offers and seasonal sports disconnections.
Foxtel’s net income of $24 million decreased from $52 million in the prior year period, primarily due to a $17 million loss resulting from the change in the fair value of Foxtel’s investment in Ten Network Holdings and $5
million in losses associated with the continued operation of Presto.
There was no mention of the cost that Foxtel is having to allow for following the failure of tens of thousands of Foxtel iQ3 boxes.
Foxtel EBITDA decreased $11 million to $144 million from $155 million in the prior year, primarily due to lower revenues and planned increases in programming costs.
News Corp who own 50% of Foxtel reported a $US219 million loss for the December quarter due primarily to $US537 million worth of write-downs on its Australian assets.
The crown jewel in the News Corporation operation is the 61 per cent stake in realestate.com.au (REA).
That stake has a current market value of $4.33 billion. According to Bloomberg, News Corp is worth around $9.7 billion, which gives some idea of how important REA has become to its media masters.