News Corp profits dive 75% as Murdoch-owned firm hints at AI future
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At News Corp Australia, a company that publishes The Australian as its flagship daily, a poor performance was exacerbated by decreasing print and digital advertising.
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Rupert Murdoch, the head of the US-listed media group, which owns News Corp Australia, speaks during the Hurman Kahn Award Gala, in New York, on October 30, 2018. (AP)
Although Rupert Murdoch's News Corporation had a sharp 75% decline in full-year profit, it still sees prospects as it increases the usage of content created by AI to cut costs.
The US-listed media conglomerate reported a net profit of $US187 million ($A287 million) for the fiscal year, down from the previous year's record of $US760 million. The company has mastheads in the US, UK, and Australia, as well as book publishers, subscription television, and real estate advertising assets.
Lower print and digital advertising at News Corp Australia, a business that includes The Australian newspaper, pulled down the outcome. Additionally, its UK news division reported fewer print advertising.
The media business offered an optimistic appraisal of the potential of generative AI, capable of producing text, photos, video, and other material, to boost revenues. News Corp generated more than half of its revenue from digital streams for the first time.
"That momentum is surely gathering pace in the age of generative AI, which we believe presents a remarkable opportunity to create a new stream of revenues, while allowing us to reduce costs across the business," said Robert Thomson, the News Corp chief executive.
"We are already in active negotiations to establish a value for our unique content sets and (intellectual property) that will play a crucial role in the future of AI."
The company's Australian arm recently revealed that it was utilizing generative AI to produce 3,000 articles every week.
It was tough for News Corp, which owns Wall Street Journal publisher Dow Jones and controls book publisher Harper Collins, to operate during the tumultuous trading period, which was characterized by rising inflation.
For the twelve months ending on June 30, revenue was $US9.9 billion ($A15.1 billion), down 5% from the previous year. The fact that there was one fewer week in 2022–2023 than the previous fiscal year contributed to the financials' decline.
"Our results showed marked improvement in the second half, so with inflation abating, interest rates plateauing and incipient signs of stability in the housing market, we have sound reasons for optimism about the coming quarters," Thomson said.
With its best profitability to date, the business news-focused Dow Jones section of the company put up a stellar performance. Additional subscriptions to its Binge and Kayo streaming services helped to bolster the Foxtel company.
News Corp recently lowered staffing costs by making numerous redundancies.
The media company’s book publishing arm saw fewer revenues as book sales declined, and digital real estate assets suffered due to the tough Australian and US housing markets.
News Corp's property portals also saw a decline in revenue due to a drop in Australian real estate listings, particularly in Sydney and Melbourne. It also declared a write-down of US$81 million for its stake in PropertyGuru, a significant Southeast Asian online real estate company.
