Rupert Murdoch has cut the information flow about his powerful
newspaper operations in Australia yet he’s maintaining disclosure of
the poor performing investment in the Foxtel Pay TV operations, just as
subscriber numbers reach the magic million mark and revenue seems set
to top one billion dollars before the end of June. The third quarter
figures for Foxtel in News Corp’s latest report make for ugly reading –
despite some improvements, there’s still red ink everywhere.

But you have to wonder whether the improvement detailed by News
flowed from improvements at Foxtel or were the result of cuts in jobs
and spending instigated during the quarter. News said the
operating loss at Foxtel fell to $17 million in the third quarter from
$59 million in the March quarter of last year.
The operating loss for the first nine months of this financial year was
unchanged at $117 million.

The net loss was $15 million for the quarter and was
higher for the nine months at $94 million compared to $83 million last year.
News’s share was a miserly $3 million loss compared to $8 million for
the previous corresponding quarter. Net debt though was up to $498
million for the nine months, compared to $207 million, as the full cost
of the digital conversion has peaked. It’s now supposed to start
easing. Revenue growth has been maintained at $61 million for the
quarter or a rise of 27% from $219 million to $280 million. That took
revenue for the first nine months to $769 million.

Gross subscriber numbers rose to 1,162,000 (up from 1,074,000) and net
numbers reached 998,000 from 867,000. But as good as it will be when
the magic millionth subscriber is officially reported,
there are signs that it’s a struggle to add subscribers at a faster rate. At the end of December, net subscribers totalled
985,000, so a mere 13,000 new net subscribers have been added in 90
days. Not brilliant. At the end of September net subscribers totalled
942,000, so the growth slowed sharply in the last quarter, which is no
doubt a reason why there’s been a cutback in spending and jobs.

Peter Fray

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