Q4 2023 News Corporation Earnings Call
Total revenues in fiscal 2014, which included news America marketing and Dow Jones by fiscal 'twenty twenty-three news media was 23% and revitalized Dow Jones segment was 22%.
Digital real estate comprised 5% of total revenues 10 years ago and that has tripled to over 15%. This past year, which includes the acquisition of move where revenues have more than doubled.
Subscription video services revenues increased from 6% of new schools total to 20% bolstered by the consolidation of control of Fox tail of business renewed and Fox tells imminent completion of our refinancing is expected to facilitate repayment of our outstanding shareholder loans, beginning this fiscal year <unk>.
Ridley since our reincarnation, we have increasingly digital recurring revenues higher margins significantly more free cash flow robust finances, and bright prospects for long term growth and value creation for all our shareholders a few facts to demonstrate our digital scale today.
Based on our June metrics, we had 79 million unique visitors at Dow Jones $159 million at the Sun $74 million at Realtor Dot com $21 million at housing Dot com in India, and a $145 million at the increasingly influential New York post and that digital momentum is surely gathering.
In the age of generative II.
Along with this relentless focus on Digitization, we have been intent on simplifying the company and heightening our cost consciousness that cost discipline was clearly evident during a year that had a complicated plotline for books, while digital real estate was naturally inevitably affected by the interest rate hikes.
Which appear to be plateauing in the U S.
I would like to pay sincere tribute to Rupert and Lachlan Murdoch and our directors, who have been steadfast in their strategic support and all our employees and our loyal insightful investors.
Thanks to their collective committed efforts newschool achieved its three strongest fiscal years ever in the last three fiscal years 2021, 2022 and 2023 in fact fiscal 'twenty three was our second most profitable year following fiscal 'twenty two despite the difficult macro conditions in a couple of <unk>.
Our segments and our fourth quarter profitability was significantly higher than last year.
They have certainly been fundamental changes in the media landscape. We have led the quest for appropriate compensation for content from the big digital platforms and that quest began publicly in 2007, when I testified before the house of Lords about the challenges for publishers and society in the Internet age has entered a new fascinating phase.
With the rise of generative II clearly negotiations are well underway with the relevant companies and once again newschool hopes to set precedents that benefit creators publishers and journalist around the globe. It is crucial for our societies that AI is replete with EI that re composition does not lead to the decomposition.
<unk> of creativity and integrity.
We have been characteristically candid about the Iia challenge to publishers and to intellectual property. It is essentially a cryptic in the first instance content is being harvested and scraped and otherwise ingested to trained AI engines ingestion should not lead to indigestion.
Secondly, individuals stories are being serviced in specific searches and thirdly original content can be synthesized and presented as distinct when it is actually in extracting of editorial essence.
These super snippets distilling the effort and insight of great journalism are potentially designs are the reader will never visit our new site, thus fatally undemanding journalism and damaging our societies.
It is reassuring that the prescient executives at the largest digital companies can see these complexities and understand that our shared responsibilities extend far beyond the commercial that generative II cannot be degenerative that we are paving a platform for future generations and that we will be collectively held to.
Account and does not just by accountants.
From the philosophical to the functional there is no doubt that I articulations will affect most sections of most companies whether it be customer service subscription management chat bots chit chat bots text or audio and audio to video experiences efficiencies will be exponential and we are absolutely.
Clear in our company there must be a confluence of the technological the commercial and the cultural.
Lost earnings I mentioned supply of Wall Street Journal reporter, even guess Caveach unjustly incarcerated by Russia for being a journalist seeking facts seeking the truth, both the journal and the U S government vehemently deny the allegations against him.
Evan has now spent almost five months in prison and we thank the many thoughtful people from all around the globe, who have relatives cores and saw his release and we thank those who are continuing to press determinedly, but his emancipation and providing support to his courageous family.
Turning now to our results for Q4 and fiscal year 2023, the aforementioned macroeconomic factors that is inflation supply chain complications and bolting interest rates, along with volatile foreign exchange rates patently presented challenges some of which are more ephemeral than eternal Nonetheless.
We still saw significant progress across several segments and thanks to our digital and international strategic focus and acute cost consciousness, including the announced 5% head count reduction, which we expect to yield more than $160 million in annual gross savings not only was this fiscal year the second best ever in term.
And profits. We believe we are poised for greater growth in the years ahead as for the fourth quarter revenues were over $2.43 billion, 9% lower year over year, though a majority of that decline is attributable to foreign exchange rates and an extra week last year, a 53rd week to balance out the multiyear.
Caliber Matthew.
Mathematically that one extra week accounts for almost half of the difference and will obviously not be a factor in the current year.
Profitability in the quarter rose, 8%, which is especially notable in that it comes after a 50% rise year earlier, we are building on our positive performances, even when the headwinds of blustery.
Full year revenues were $9.879 billion down 5% on a record prior year and total segment EBITA was over 1.4 billion, 15% lower though still the second highest profits recorded for the New News Corp.
Dow Jones posted its highest profitability for both the quarter and the full year since we acquired the company helped by impressive results in the professional information business in fact, taking a step back Dow Jones has doubled its profitability in the past four years and for the first time Dow Jones was the highest contributing.
Profits across all of news Corp. In fiscal 2023, as we continue to develop the high margin b to B offerings.
We are focused on Dow Jones as a pillar of news corps future growth with significant value appreciation for shareholders. Dow Jones is nearing an important threshold with the lucrative b to b business expected to be the highest contributor to profitability in fiscal 2024, and a key driver for future margin expansion.
Dow Jones has been bolstered over the past year by the acquisitions of Opus and chemical market analytics and buys continuing double digit growth of risk and compliance.
It is worth noting that risk and compliance revenues have risen six fold over the past decade, we believe prospects remain decidedly bright as the corporate imperative to minimize risk and maximize compliance grows in an ever more complex regulatory regime.
We believe the energy transition is an enormous global opportunity for Opus and we will capitalize on it through new products the establishment of compelling benchmarks and the generation of must have data pricing and analytics, whether it be for fossil fuels hydrogen solar lithium cobalt evs or carbon.
Credits and offsets the industry relies on opus with pricing transparency, which is critical to day by day decision, making in a market that is undergoing massive transformation.
Dow Jones digital subscription growth accelerated in the second half partly helped by bundling of our products to capitalize on our clients' needs for a sophisticated market analysis and analytics.
We want the channel market watch readers Gws, Jai then to Barron's and investor's business daily and from there to a specialist business products that is a pathway to profit for the company. Moreover, we are increasing our international digital focus for the Wall Street Journal, which currently has only 12% of subscriptions outside the U S where there is much.
Tapped potential.
Subscription video services reported adjusted revenue and profit growth, which excludes currency impact for the second straight year and also for the fourth quarter a remarkable turnaround from the recent past we have long term rights to the key is try and sports and the Prime International Sports for Australians and have created a model that stream.
As around the world are now trying to emulate.
Australia revenue growth again outpaced broadcast declines in both Q4 and the full year with paid subscriber scaling at a double digit rate to nearly $3 1 million. So we are particularly confident about Fox tells future and our optionality given the imminent completion of our refinancing we were asked.
Frequently in the past how much more capital, we would need to commit to Fox, though but the question now is how much cash we will receive in coming years.
Ari I continued to be impacted by macroeconomic challenges in the Australian housing market, though we do see an easing of those challenges as the interest rate cycle peaks home prices have again started to increase in the auction completion right cross 70% in June up from 55% in the prior year ARIA as audience share against its nearest competitor.
<unk> continued to expand to north of three five times in June well visits to the site have expanded year over year for four consecutive months Ari I did benefit from product price increases linked to improvements in the quality of those products, while India remains a source of ongoing potential given that housing dot com is already.
The market leader in a country on a positive economic trajectory with a rapidly expanding middle class in the U S. We have new leadership at move operator of realtor Com move experienced much success under David Doctorow and broaden its offerings with the acquisitions of up city up nest antiviral, we sincerely thank David for that.
His positive contribution which will resonate for years to come.
Damian <unk> brings vast digital experience a fiercely competitive spirit and much knowledge of how to leverage used caused powerful U S platforms, whether that be the New York post or the Wall Street Journal Barrons to build the brand and expand market share dining has just returned from Australia, where the real to team spent time at Rei and the crew.
<unk> collaboration between the two companies will certainly intensified scale is crucial and to put a scale and perspective based on June comscore data Realtors valuable and engaged audience is well over two times of that of Homestar com not only do we have scale in residential sales. We believe that we can continue to monetize.
Audience successfully.
For Harper Collins and for other book Publishers, Q4, and fiscal 'twenty three generally was a challenging period with the post COVID-19 market resetting logistical issues at Amazon and acute inflationary pressures.
Some particular signs of success, where Joanna Gaines Magnolia table volume three and remarkably bright creatures by Shelby Van Pelt, and we have reason for optimism in the near future with books like Tom Lake by Ann Patchett, the collector by Daniel Silva and in the U K T V Big Adventures.
On the small screen by Peter Kay in Q2, we are looking forward to the next pioneer woman cooks by re Drummond and the little Liar by Mitch Albom.
And use media advertising trends very distinctly by geography, with the U K and the U S performing best in the quarter in the U K. The Sun had a successful year with digital outpacing print ads that guide in the fourth quarter and for the full year.
This strength was accentuated by the year over year growth of the Sun in the U S, which reported a substantial surge in page views and even higher yields than the successful U K side, the times and Sunday Times also hit 565000 digital subscriptions at the end of June and 11% increase underscoring.
The strength of the journalism and the global potential of the brand News Corp, Australia achieved almost 1.1 million digital subscriptions, an increase of 10% use dot com that I use was the leading news website in Australia. According to the Ipsos rankings, while the Australia and was also in the top 10 in the U S. The New York.
<unk> reported another year of strong profits after decades, if not centuries of endless losses as I mentioned the papers improved commercial fortunes have been accompanied by growing influence in New York, Washington, and beyond as the papers founder Alexander Hamilton Sagely observed those who stand for <unk>.
The thing.
For everything.
In a fiscal year affected by the reverberations of war inflation interest rate hikes supply chain disruption and other macroeconomic challenges and in a business inevitably impacted by foreign exchange fluctuations useful is proud to report its second most profitable year since its reincarnation a decade ago.
Our teams have been tested and have clearly past that exacting test. We ended the year on an upswing with the company returning to profit growth in the quarter with inflation showing signs of abating interest rates plateauing and incipient signs of stability in the housing market, we have sound reasons for optimism.
Specious macro conditions will surely work to the benefit of a company that has become more digital more global and with more recurring revenues and higher margin segments. We have navigated the sometimes perlis media waters adroitly and are particularly proud of our provenance, a provenance based on commitment curiosity and integrity.
We look forward with a sense of genuine of tangible excitement in the potential of our people and our businesses and we remain utterly determined to deliver positive results for our customers our employees and most certainly for our shareholders I will now pass you to our erudite CFO Susan Panocha.
Who will provide more insight into our financial coordinates.
Thank you Robyn.
Our second half results show a marked improvement from the first half of the year with fourth quarter profitability up year over year, highlighting that toxicity and durability of our revenue streams and our ongoing cost efficiencies as we navigate the ever changing macro conditions supply chain pressures and currency headwinds.
As the company continues to transition to digital digital revenues now comprise over half of the company's fiscal 2023 revenues. We have also transformed the revenue base away from cyclical advertising I think needs to one that is much more recurring and subscription base with strong growth prospects.
We have made strategic acquisitions that we believe is fundamentally strengthened the company the acquisitions of Itis CNI H M. H mortgage choice and ITT during fiscal 2021, and 2022 have essentially replace the revenues from news America marketing, providing a much stronger base for long term growth.
The company has changed and evolved since 2013 and is well positioned for future success we.
We have maintained a very healthy balance sheet, while we strengthen the asset base transform digitally generated healthy free cash flow and continue to improve our operating efficiencies.
Turning to our financials I will focus on the fourth quarter performance.
Fourth quarter total revenues, whereas the $2 $4 billion down 9% year over year, which was heavily impacted by the 110 million tons, a 4% negative impact related to the extra week last year and $72 million, a 3% impact from foreign currency fluctuations impressively total segment EBITDA was 341 million.
Dollars up 8% year over year, despite very difficult here I think the comparisons and weak trading conditions at Harper Collins margins improved by over two percentage points to 14%.
Fourth quarter, adjusted revenues declined 7% compared to the prior year, while adjusted total segment EBITDA rose, 2% versus the prior year, both revenues and total segment EBITDA were also negatively impacted by the extra week last year.
Mustard dressing and title segment EBITDA did not exclude that impact.
Earnings per share in the quarter were a loss of one <unk> compared to income of 19 cents in the prior year. The current quarter reflects $85 million of restructuring and impairment charges, mostly related to our company wide head count reduction that we communicated on our last earnings call and an $81 million noncash write down an equity losses of affiliates related to <unk>.
<unk> investment in property given the prior income with 19 benefited from a $149 million tax benefit.
Adjusted earnings per share was <unk> 14 cents in the quarter compared to 37 cents in the prior year.
Moving onto the results for the individual reporting segments, starting with digital real estate services segment revenues were $369 million down 17% compared to the prior year impacted by the ongoing macroeconomic pressures and negative impact of $15 million or 4% from foreign currency fluctuations and $14 million or 3%.
A negative impact from the extra week last year.
On an adjusted basis segment revenues decreased 14%.
EBITDA declined 11% to $108 million impacted by lower revenues, partially offset by the lower discretionary costs compensation and broker commissions adjusted segment EBITDA declined 5%.
<unk> revenues were $223 million, which declined 11% on a reported basis or down 5% on a constant currency basis. The revenue decline was due to the impact of lower national listings and a decrease in financial services revenue driven by lower settlement activity.
You buy listing for the fourth quarter without 18% year over year with the higher yielding metro areas of Sydney, and Melbourne, showing improvement each month of the quarter ended down 17% and 16% respectively.
These declines were partially offset by the annual price increases in the residential and commercial businesses increased uptake of premium products, including Premier plus favorable depth penetration and continued strong performance from Arya, India, which maintained its audience leadership. Please refer to <unk> earnings release and their conference call. Following this call for more details.
At news revenues were $146 million down, 24% compared to the prior year, which reflects $14 million or 7% negative impact related to the absence of the extra week.
Excluding the extra week impact revenue declined 17% similar to the third quarter results with yield optimization in the lead generation products, partially offsetting lower late in transaction volume.
Lead volumes moderated to down 14% year over year compared to a decline of 30% in the third quarter, while Realtors average monthly unique users declined 20% from the prior year to $74 million in the fourth quarter based on internal metrics, yet up from $72 million in the third quarter.
We remain focused on driving both usage and engagement through continued product enhancements and improvements to SCA, while expanding our core adjacencies of seller rentals and new Heinz.
Turning to the subscription video services segment revenues for the quarter with $501 million down 4% compared to the prior year on a reported basis due to foreign currency headwinds on a constant currency basis revenues rose, 3% versus the prior year, the sixth consecutive quarter of growth in constant currency streaming revenues accounted for <unk>.
99% of circulation and subscription revenues compared to 23% in the prior year.
T T revenue growth again more than offset broadcast revenue declines benefiting from both increased subscribers and price increases at <unk> and binge.
Total closing paid subscribers across the Fox tailgating proved to have a $4 6 million at quarter end up 5% year over year.
Title paid streaming subscribers approached $3 1 million, increasing 14% versus the prior year and accounted for approximately 66% of Fox tells total paid subscriber base.
<unk> continued to expand advertising inventory on the basic product generation type of modest incremental revenues and some upgrade activity each at the higher teens subscription offerings.
Foxtail ended the quarter with over 1.3 million residential broadcast subscribers down only 9% year over year broadcast churn continued to improve to add more than 260 basis points year over year to 11, 1% the lowest level since fiscal 2016, while broadcast RP rose 2% to over 84 Australian dollar.
Fox tell announced a price rise to Canadian July across some of the broadcast he's the first since fiscal 2019, which will benefit the fiscal 2024 results.
Segment EBITDA in the quarter of $78 million was down 4% versus the prior year, but was up 4% on an adjusted basis, despite higher programming costs, mostly related to contractual escalators across key sports rights on.
On the product front following the successful growth in streaming the business, we'll be launching a streaming aggregation device leveraging the sky class technology expectation is for a commercial launch later in fiscal 2024, and we will keep you updated on our progress.
Moving to attach aims Dow Jones had another strong quarter with revenues of $546 million down, 3%, which includes the negative impact of $40 million or 7% related to the absence of the extra week from last year, we lapped the <unk> acquisition in March and CNI in June .
Digital revenues accounted for 79% of total revenues this quarter up three percentage points from last year circulation and subscription dice revenues represent over 79% of total revenues up two percentage points from the prior year underscoring the stability and recurring nature of the revenue base.
On an adjusted basis revenues declined 6%, but would have delivered a modest improvement excluding the extra week.
We are continuing to see strong momentum in our professional information business with revenues rising 10% year over year benefiting from the continued integration of Otis and CNI, coupled with strong revenues from risk and compliance results were partly offset by the extra week last year, which led to a $14 million or 8% negative impact on the performance.
Excluding the extra week people revenues grew 18% Pip revenues this quarter accounted for 37% of segment revenues and while we don't disclose specific margins Pip margins are higher than the overall Dow Jones margin and are contributing strongly to segment EBITDA underscoring the uniqueness and durability of the Dow Jones asset mix.
Risk and compliance revenues rose, 10%, despite the extra week in the prior year and continued to grow at a high teens rate on a like for like basis, while 60% of the customers are in the financial services sector. The fastest growth is now coming from corporates with demand driven by the anti money laundering financial corruption in ESG screening and <unk>.
Return products retention remains over 90%.
Life doesn't see a nice revenue performance remains robust benefiting from price escalations, new products and new customers retention rates for Otis and CMA subscription products remain in the mid Ninety's, which is underpinning the transformation attach ames' revenue base.
Circulation revenues declined 6% due to the absence of the extra week lower print volume and witness at ITT as we nicely in the third quarter.
Excluding the extra week impact of $17 million or 7% circulation revenues were up 1% year, ITE, which is slightly higher than the third quarter right.
Title Dow Jones digital only subscriptions grew 12% year over year or by 163000 sequentially with the year over year rate increasing from last quarter.
Advertising revenues declined 14% to $100 million and accounted for 18% of Dow Jones revenues this quarter with digital down 10% in print down 18%, excluding the negative impact from the absence of the extra week of $9 million or 8% the decline rate moderated from the third quarter to down 6%.
Dow Jones segment EBITDA for the quarter grew 25% to $133 million as cost growth moderated from the first half margins improved to 24% up from 19% last year adjusted segment EBITDA for the quarter increased 17% and notable improvement over the third quarter and full year performance.
At the publishing both Harper Collins and the industry more broadly face challenging headwinds in the quarter revenues fell 13% $446 million, which included approximately $20 million or 4% of negative impact from the absence of the extra week.
Consumer demand slowed in the fourth quarter more than we initially expected leading to lower friendly sales and higher returns, particularly in Christian publishing in general books, most of the weaknesses in North America.
Segment, EBITDA declined 66% year over year to $16 million or 4% segment EBITDA margin segment EBITA was impacted by the weak top line performance as well as higher than normal levels of royalty write offs due to the underperforming for certain titles further compressing profit margins.
Despite some unusual headwinds we are seeing moderation in price and manufacturing costs, while head count reduction initiatives are expected to exceed the 5% target.
The backlist represented 59% of revenues for the quarter up three points from last year, but down slightly from Q3.
Digital sales declined 10% this quarter, mostly driven by lower ebook sales and accounted for 25% of continuing our sales up from 24% last year on an adjusted basis revenues fell 13% and segment EBITDA fell 17%.
Turning to news media revenues were $571 million down 9%, primarily due to the absence of the extra week, which negatively impacted revenues by $36 million or 6% and the impact from foreign currency of $18 million or 3% adjusted revenues declined 7%.
Advertising declined around 15%, reflecting a $15 million or 6% negative impact related to the absence of the extra week, and a $6 million or 2% negative impact from foreign currency fluctuations exco.
Excluding the impact from the extra week and currency advertising revenues declined approximately 7% due to weaknesses at news, Australia, which was impacted by last year's federal election, and some softness in real estate and retail news U K in New York pace were relatively stable versus the prior year.
Circulation and subscription revenues decreased 7% due to the absence of the extra week negatively impacting revenues by $19 million or 6% and $9 million or 3% negative impact from foreign currency, excluding the extra week and currency impact circulation and subscription revenues rose, 2% with growth driven by cover price increases in the <unk>.
UK, and Australia, and double digit subscriber growth across news, Australia, and the times and the Sunday times.
EBITDA of $45 million rose, 36% due to a 12% declining costs driven by ongoing cost saving initiatives and lower costs related to talk TV and other digital investments adjustment segment EBITDA rose 42%.
Turning to the outlook market trends remain mixed geographically that said, we have taken aggressive action over the years to improve our asset base, including a shift to more recurring and digital revenues, coupled with strong cost initiatives and focus reinvestment in our core pillars, we still expect some inflationary pressures, but are hopeful that they will be at a more modest.
Right, we exited the fiscal fourth quarter with the return to total segment EBITA growth and we hope to see improvements in fiscal 2024.
Looking at each of our segments at digital real estate services, a strain residential new buy listings for July declined 5%.
Sorry, I should benefit from double digit residential <unk> growth as price increases have been successfully implemented please refer to rei for more specific outlook commentary Aetna.
At news well, we anticipate improvements in lead volume and transactions across the full year. They will likely remain challenging in the short term. We also expect higher marketing spend compared to the fourth quarter together with ongoing investment in Adjacencies, which we will balance with cost reductions in.
In subscription video services, we remain pleased with the performance of the streaming products and the ongoing focus on broadcast and churn as we complete the migration of customers from cable in the first half.
We expect modestly higher expenses for the full year, driven by sports rights and product investment, which will be more weighted to the first half we expect full year capex and profitability will be relatively stable in local currency.
At Dow Jones, we hope to see improvement in advertising declines, but as is typical visibility is limited. We also expect to see continued strong growth from Pete wheat.
We expect modestly higher overall expenses in the first quarter and for the full year in contrast to the fourth quarter.
In book publishing Harpercollins and the industry exhibited more volatility last year than normal that said July was encouraging with a return to revenue growth EBITDA margins lifting from the fourth quarter lows and prior year comparisons are easing.
At news media July advertising trends remain mixed geographically, we expect top TV costs will be similar if not lower than the prior year in local currency. We are also seeing moderating newsprint cost pressures in the U K.
We expect Capex in fiscal 2024 to be moderately higher than in fiscal 2023, primarily due to digital reinvestment that being said, our capex came in notably lower than we expected this fiscal year and we will be monitoring it closely with respect to macro and business conditions as we did during the current year.
We expect to generate strong cash flows and expect to retain a high percentage of shareholders in the form of buybacks and dividends.
With that let me hand, it over to the operator for Q&A.
Thank you we will now start the Q&A session. Please limit your questions to one for participants.
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Our first question comes from David Karnofsky from J P. Morgan Please limit yourself to one last question.
Hi, Thank you.
Maybe Susan just on the cost initiatives I don't know if theres a way you could frame how much of that was a contributor in the quarter and then I think last earnings you'd stated.
You've got the majority of the benefit would come through.
Fiscal first quarter.
Is that still the case and then just on the other segment EBITDA that was it was better sequentially is that from the cost savings.
Should we think about that that line is sustainable.
Thanks, David.
Look I think we did have a really good quarter in Q4 in relation to the cost savings and that certainly helps some of the segments, particularly news media you can see that coming through in the results.
And you said you'd say last quarter that we would expect to see the full benefits coming through into fiscal 'twenty 'twenty. Four I think that still is the case as we sit here today, we do expect to exceed that $160 million of gross cost savings from the 5% head count reduction.
But I would not go as we go into 2024, we will have some inflationary pressures related to wages newsprint prices and manufacturing costs and we will continue with our digital reinvention initiatives across the various businesses. So that number of course, it was gross cost savings and that will help offset those increases and investments.
In relation to the other segment there are a couple of things going on we had the.
Settlement the legal fees in the quarter last year. So we got the benefit of that in this quarter.
We also had lower bonus accruals coming through initiate and what we did relative to the prior year I think if you want to think about the next year I'd probably have a look at the Q3 rate that's sort of indicative performance going forward.
Thank you.
We'll take our next question please.
Our next question comes from Alan Gould from Loop capital. Please limit yourself to ask your question.
Alright.
Thanks for taking the question.
Robert I've got two actually on the January the AI can you give us an indication of this consortium are you in a consortium.
The process is is there any legislative movement, and secondly can you give some discussion on Simon and Schuster I realize one author Dr.
Doctor.
Seemed like the multiple was.
Okay.
Yes, Alan look first of all NII, you'll right by instinct that this is an important moment in the history of using knowledge with commercial and social implications.
Found impact on creativity and integrity fake news and deep fakes are a concern the potential of a sophisticated forgeries for counterfeit content is almost endless.
Separately generated by <unk> has the potential to recycle recycle itself and what you might call endless perfidious permutations and that's why the covenants of the archival base is so crucial in Y refreshing daily weekly with incremental improvements is imperative.
So the potential is enormous but garbage in garbage out garbage all the barrels.
We've invested billions of dollars in knowledge creation actually tens of billions of dollars in that content certainly has a value in this editorial epoch.
For almost two decades, we've genuinely led the digital debate about prevalence, which is echoed in Washington, and London, Brussels in Canberra, and Tokyo and room.
For Us what gives me confidence for our company and our community is that the leaders of the largest digital companies are clearly sincerely focused on the issue.
He understands our collective responsibility and we are actively individually engaged in fruitful discussions I can't be more specific at this moment, but we see a positive financial result through consensual negotiation not through litigation, we would like to reward journalists not lawyers.
As for Simon and Schuster.
Normally we don't speculate on speculation about M&A.
But candidly as you intimated, we wouldn't be prepared to go that high.
Given that say in our case you could reasonably expect group.
Scrupulous scrutiny by the antitrust authorities with all the related legal costs and the financial opportunity cost. We obviously have great respect for the company and resources.
But given the regulatory risk we were quietly hoping that frac.
Frankly, Simon and Schuster would be reminded them that we would get the company for a bargain but.
It obviously didn't end up in the bonds inaugural bargain bin.
Yeah.
Thanks, Alan Thank you. Thanks, Alan Laila, we will take our next question. Please.
Our next question comes from Kane Hannan from Goldman Sachs.
Okay.
Please limit yourself to ask your question.
Hey, guys.
Just on Fox to or should we still think about the 5 million subs $3 billion revenue target you guys sit out for next year on the back of the Investor Day, and just given those Capex comments I mean, do we still think it will eventually come down to that 4% target or has something changed there.
Okay.
Okay.
We're certainly aiming high when it comes to sort of flex, though and you can see from the success that we've had in streaming.
Total streaming subs rose, 14% to $3 1 million and a streaming revenues rose, 26%. So that's all sort of healthy growth.
At the same time Brookhouse churn fell sharply and was 11, 1% in the quarter compared to 13, 8% in the prior year.
While broadcast <unk> rose 2%.
Where else in the World you actually witnessing a decline in the broadcast churn rate, while experiencing a continuing surge in streaming that really is the Fox sale success story.
And kind of just in relation to the Capex, yes, we still think that's irrelevant.
Time.
As I mentioned in my comments, we expect capex to be relatively stable in the coming year, because we've got the reinvestment in relation to the aggregation service or about to launch.
Yeah.
Okay.
Thank you Kane later on we will take our next question. Please.
Our next question comes from Andrew Rykowski from Evans and partners.
Oh, Hi, Robert Hi, Susan.
My question is around the Fox sale shareholder line.
Obviously, you flagged the intention for it to be repaid just interesting once that's right do you expect any recourse to us called from lenders in other words will you have to guarantee any of the Fox tail refi and and I guess as part of answering that question is there anything in particular, which has driven the ability of four.
So to re finance, particularly if you're not guaranteeing along.
And sorry, I would just extended a little bit further should we read this into.
Preparation for a potential spinout of Fox tail down the track obviously that's been speculated.
For a little while thank you.
Maybe I'll take the first couple of so we don't have a guarantee on that and we don't expect that there'll be anything to do with the guarantee going forward in relation to the refi actually the reason that we could refinance so successfully is really because of the underlying business performance of folks tell you know they've had a great couple of years really reinvented themselves and it's a real credit to the team.
And that they've got themselves into disposition. So that's really what's driving the strong refi outcome and maybe I'll hand over to Robert to comment on that.
Yeah.
Joe obviously, we cant comment specifically about an ipi, but what I can say with absolute certainty is that the success. We've had with folks still has given us absolutely the option of Optionality.
Thank you. Thank you.
Joe Layla, we will take our next question. Please.
Our next question comes from Craig Huber from Huber Research. Please limit yourself to ask your question.
Great. Thank you a book publishing obviously the margins and the profit dollars there were much lower.
I think most people expect is truly me, but also there are much lower than what than pre COVID-19 and stuff is there.
Any reason to think this environment.
Revenue performance in the more just won't continue for at least a few more quarters for my question.
Craig look obviously, the 50 <unk> week comparison exaggerates the decline, but the inflationary pressures are beginning to abate and some of the costs around royal.
Royalty Raj I'll show a relatively unique so the team at.
Because you've obviously been taking remedial action to improve our <unk> for this fiscal we have implemented a price rise across various categories.
And actually the team is particularly confident about the impact of that current releases and it's safe to say that our expectation our firm expectation is that there will be significant margin improvement. This year. This very week, we have three of the top 10 fiction best sellers in the U S with the number one seller and patch, it's Tom Mike which is already.
So more than 100000 copies across print digital and in the first week on sale as well in that top 10, we have Jamie copper head from Barbara Kingsolver under collected by Daniel Silva now that success in the top 10 will be reflected in the bottom line.
Thank you Craig Layla, we will take our next question.
Our next question comes from Lucy Huang from UBS, Please limit yourself to asking a question.
Thanks, Robert and Thanks, Susan I just have one question in professional information services to IEP to talk through kind of what drives the price ended the fourth quarter is it oh, what's the contribution from subscribers right fastest price growth in that business and I guess, maybe if you can talk through some of your margin expectation coming into the fourth quarter.
Is that expected to be more incremental investment in this space. So could we see margins continue to expand into next year. Thanks.
Well Lucy safe to say, we're delighted with the progress in the Dow Jones B to B business, you can see the impact on our margin more broadly at Dow Jones and longer term you will see that music operation.
In the fourth quarter of 2022, the EBITDA margin at Dow Jones is our important 8% in last quarter. It was 24, 4% and the overall margin at Newschool rise from 11, 8% to 14% in a year, where we were presented with real macro challenges are not margin increase is of course.
A measure of growing profitability, but it's also a measure of our robustness.
So quarter after quarter year after year, we've seen double digit.
Gross increases at risk and compliance we now expect the same for Opus and CMA.
And where.
Frankly delighted with the speed of integration of both Airbus and CMI and in ensuing quarters, you will see the benefits of that.
Thank you Lucy Laila, we will take our next question. Please.
Our next question comes from Brian Han from Morningstar.
Yeah.
Yeah.
Oh hi.
On the Wall Street Journal can you. Please provide some color on digital.
Digital subscription pricing in.
In terms of how much it rose in the June quarter, and what the outlook might be for Twentyfold.
Brian it's difficult to be too specific.
What you'll see in the circulation patents at Dow Jones is probably.
Ah metrics phasing and a modest decline in print subscriptions. The emphasis is on the digital bundle with the combination of Mark Wash Barron's and the Wall Street Journal.
Sometimes in the shorter term that means the average price of each is a little lower but we're building loyalty and reducing churn in each of the products and in the long term by increasing the price elasticity I mean, the biggest problem for any of that friction business apart from the acquisition itself is true.
Okay.
Thank you, Brian Leila will take our next question. Please.
Our next question comes from Darren Leung from Macquarie.
Your line is open interest reached one mute.
Hi, guys. Thanks, Jamie.
Just a quick one on those plays it looks like the revenues declined 24%.
Listings, it's obviously only down 2000, so it's one little bit of clarity in terms of.
Through the first period, where we've actually seen.
One more than volume birth.
So I just wanted to if cloud yes.
What's happened to the yield and other products space, that's usually been a bit of an offset for the business.
Yeah.
Obviously.
The housing market slowdown in the U S is having a profound impact on.
The whole digital property companies.
And that has been reflected to a certain extent that real trucks, but I have to say it is.
Is core.
News Corp is complementary to other assets and Youll see that irrefutable facts in coming months with the impact of Diamond Eagle's He knows our company intimately.
You will see with a lot of digital property companies as the cost of marketing.
Remaking our marketing.
But strong plans for leveraging our platforms.
Look we're talking about enormously influential digital platforms. It helps the wall Street Journal by the way do you have exposure in Florida via a realtor and it helps realtor to have the Florida audience with the new oppose which isn't in many many millions of as I mentioned the post has about 145 million monthly uniques, we have about $90 million of Dow Jones and in the U S alone about $110 million.
Sun, depending on the month.
So.
In building both listings in yield we're gonna be obsessively focused on leveraging that comparative advantage.
Darrin, there's a little bit of noise in the numbers because of week 53, if you exclude the week 53rd impact it was actually down 17%, which was consistent with what it was down last quarter.
And I would just make one further observation about the Australian property market as Susan alluded to earlier.
I would say that we are seeing some particularly positive saw strength.
<unk> market, which will surely benefit.
And us.
No doubt that activity has already picked up this quarter and that should be reflected in Arizona. It's a very transparent market anyone can track listings in the auction completion right.
So I would encourage investors to do the math in coming weeks.
That's sometimes forgotten that.
Thanks, Lachlan Murdoch Rei is an integral proud of abuse cooperation and it has a market cap today of around 21 billion Aussie dollars.
Thank you Darin. Thanks, guys. Thanks, Darren Laila, we will take our next question.
Our next question will be a follow up from Craig Huber from Huber research.
Great. Thank you.
I appreciate that the much better results in this quarter and you guys have had some really good results Universal cobot.
Happened in particular, but.
It comes up all the time with investors you know why is this company newscorp. So complicated and is there any potential movement here to simplify the company going forward and I guess I'd love to have it updated thoughts on that would be what you can tell us. Thank you.
No.
We are constantly reviewing our structure to ensure the optimal use of resources.
The best outcomes for investors.
That's why we would contemplate a style of realtor for rather generous price and why we've done much underlying structural and regulatory work that gives us more flexibility in our collective decision making.
We're conscious acutely conscious of our responsibilities to investors, but also acutely aware of the value of our assets.
And we've been building a portfolio for a reason.
Can see.
Since our split annual print related revenues, a decrease of almost $3 $2 billion that is correct $3 2 billion and we've more than replace that number with digital growth and made the company far more profitable with far greater free cash flow. So we know that we do need to provide more transparency, so that the value and the potential of our asset.
A better understood.
You might clear that's why we break out <unk> and you can see the rapidly increasing revenues, particularly in the professional information business, which was the largest contributor to profitability. This year and that has already been noticed by investors.
Thank you Craig a little we will take our next question.
At this time, we have no further questions. So I'll hand over to Michael Florin for closing remarks, great well. Thank you Laila and thank you all very much for participating have a wonderful day and we'll talk to you soon take care.
Yeah.