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Video subscribers boost News Corp coffers

AAP  |  08 Feb 2019Text size  Decrease  Increase  |  
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Cash is streaming into News Corp's coffers after the consolidation of Foxtel and Fox Sports and the launch of sports streaming service Kayo in Australia.

The subscription video services are giving Rupert Murdoch's media conglomerate a near billion-dollar first-half revenue boost.

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News Corp says digital subscriptions at its mastheads have increased

In early afternoon trading, News Corp (ASX: NWS) was up 2.50 per cent at $18.78 - an 11 per cent discount to Morningstar's fair value estimate of $21.

The global media empire lifted its total earnings before interest, taxes, depreciation, and amortisation by 26 per cent to $US728 million ($1.03 billion) for the six months to December 31, according to unaudited second-quarter results released on Friday.

News Corp's total first-half revenue was up 22 per cent to $US5.15 billion, following the combination of Foxtel and Fox Sports Australia in April, with the company's book publishing and digital real estate divisions also reporting growth.

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But News Corp Australia's revenue fell 5 per cent in the three months to December, while the overall first-half global revenue lift was offset by a 23.4 per cent - or $US536 million - increase in operating expenses to $US2.82 billion.

The Foxtel consolidation - which saw News Corp take a 65 per cent ownership in the new company - accounted for $US139 million of this increase.

Addressing the results, New York-based chief executive Robert Thomson said digital subscriptions at News Corp Australia's mastheads, including The Australian, Daily Telegraph, Courier Mail, and Herald Sun, had risen by 70,000 - to 460,300 - from the same point last year.

"News Corp has reported increased profitability and revenue growth during the first half of fiscal 2019, highlighting the power of premium content and authenticated audiences in a fact-challenged world that craves credibility," he said.

Total Foxtel subscribers were steady at 2.9 million as of 31 December.

Thomson said the launch of sports-only streaming product Kayo had opened to positive reviews in Australia and was primed to thrive during the upcoming winter sports season.

He said there were 100,000 paying Kayo subscribers as of this week following the service's launch in November.

News Corp's unaudited first-half net income was $US196 million, up from a $US16 million loss at December 2017.

The company declared an interim dividend of US10 cents per share across A and B class shares.

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