News Corp and Telstra-owned Foxtel Group has reported and increase in revenues for the first quarter of FY 2022, up to US$510 million (A$688.4 million), which represents a 3% increase on the previous corresponding period.
Total closing paid subscribers across Foxtel reached 3.85 million at quarter end, up 17% year- over-year, with total subscribers, including trialists, equating to approximately 4 million.
Speaking to investors following the release of the News Corporation Q1 results, chief executive Robert Thomson said: “In Subscription Video Services, the first quarter built on the significant progress made in FY21 in reshaping the Foxtel Group as a streaming-led business, with improved revenues, profitability and cash generation. For the second consecutive quarter, growth in Kayo and Binge revenues clearly offset the not-unexpected modest decline in retail broadcast revenues.
“We are obviously now in a position to be even more ambitious for Foxtel and are always seeking to maximise its undoubted potential.”
News Corp CFO Susan Panuccio added: “Kayo and BINGE ended the quarter with approximately 1.1 million and 885,000 total subscribers respectively. In the aggregate, total paying streaming subscribers were up more than 69% to nearly 2.1 million, and total streaming subscribers, including trialists reached over 2.2 million. Streaming products in the aggregate reached approximately 54% of Foxtel’s total paid subscriber base.
“Broadcast churn improved, declining to 14% from 14.6% last year and 17.1% in the fourth quarter. Broadcast ARPU increased 4% from the prior year to 82 Australian dollars, mitigating subscriber volume declines, consistent with Foxtel’s strategy of focusing on higher ARPU subscribers and fewer low cost offers. Foxtel continues to see an improvement in subscriber mix, as the percentage of higher valued, longer-tenured subscribers continues to rise with a corresponding decline in churn rates.
“Net declines for residential broadcast subscribers moderated sequentially with 1.6 million broadcast subscribers at quarter end. Commercial subscribers were down over 30% from the fourth quarter to 162,000 and we do anticipate a recovery in the second-half with the easing of restrictions.
Foxtel’s capital expenditures for the three months ended 30 September 2021 was $48 million, compared to $51 million in the prior year.
On forward commentary, Panuccio said: “In Subscription Video Services, we remain pleased with the ongoing performance of Kayo and Binge and the efforts to improve broadcast ARPU and churn. We do expect seasonality in Kayo, given the end of key winter codes but look forward to our summer schedule with The Ashes and the Cricket World Cup in the second quarter. Costs are expected to be higher in the second quarter, most notably for entertainment and sports rights, as well as some higher marketing to support the launch of Flash, the new streaming offering. Overall, we continue to expect costs for the full year to be relatively stable in local currency.”
Total streaming subscribers, including Kayo Sports, Binge and Foxtel Now reached 2.2 million (2.09 million paid), up 68%.
– Streaming subscribers represent 53% of the Foxtel Group’s total subscribers.
– Kayo reached 1.08 million subscribers (1.06 million paid), up 59%.
– BINGE reached 885,000 subscribers (802,000 paid), up 176%.
– Foxtel Now reached 239,000 subscribers (227,000 paid), down 23%.
Foxtel residential and commercial broadcast subscribers were 1.77 million, down 5.2%.
– Foxtel Residential subscribers declined to less than 1.61 million.
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