New Look Foxtel Set To Dent Revenue & Subscription Declines
Under pressure Foxtel has managed to hold onto subscribers with the pay TV operator currently undergoing a transformation program under the new management after a $33M revenue drop.
New Foxtel boss Patrick Delany, who took the reins in January in place of former chief executive Peter Tonagh, is set to launch new services next week after reporting that residential customer churn for cable and satellite was down over the quarter from 13.3 per cent to 12.5 per cent, while average revenue per customer declined 3 per cent over the same period due in part to the Company selling cheap Foxtel Now packages Vs a full home package.
Delany has called in consultants to help him plot a new future for Foxtel with a bold new program set to be rolled out on the 14th of August in Sydney.
Telstra and News Corp merged Fox Sports, formerly 100 per cent News Corp owned, and joint-venture Foxtel in April. News Corp now owns 65 per cent of Foxtel.
The net loss for News Corporation over the quarter was $US355 million, compared to $US424 million in the same quarter in 2017, predominantly due to a $US337 million impact from combining Fox Sports and Foxtel.
News Corp CEO Robert Mr Thomson recently confirmed that Foxtel will launch an over-the-top streaming service in late-2018 and noted the recent acquisition of cricket rights ensured a “year-round offering for the first time” that would help reduce seasonable subscriber churn.
Foxtel’s revenues dropped $US33 million in the three months to June 30, “primarily due to lower subscription revenues at Foxtel, due to subscriber mix, and lower advertising revenues, partially offset by the positive impact from currency fluctuations”, a note to investors says.
Earnings (before interest, tax, depreciation and amortisation) over the three months was down 39 per cent compared to the same time in 2017 due to the revenue hit, increasing programming costs for major sports and $US10 million in additional transition costs.
Foxtel contributed US$610 million to News Corp’s overall revenue in the fourth quarter ended June 30.