News Corporation, headed by Rupert Murdoch, has reported a significant 75% decline in its full-year profit, but remains optimistic about future opportunities as it expands its use of cost-saving AI-generated content.
The US-listed media conglomerate, which owns media outlets in the US, UK, and Australia, along with book publishers, subscription television services, and real estate advertising assets, posted a net profit of $187 million (AUD 287 million) for the financial year, down from the previous year’s record of $760 million.
The drop in profit was attributed to lower print and digital advertising revenues at News Corp Australia, including its flagship newspaper, The Australian, as well as lower print advertising at its UK news division.
For the first time, News Corp generated over half of its revenue from digital sources. The company expressed a positive outlook for generative AI, which has the capacity to create text, images, video, and other media, as a means to boost profits.
News Corp CEO Robert Thomson commented, “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. 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.”
News Corp’s Australian arm revealed that it is generating 3,000 articles per week using generative AI.
Despite the challenging trading environment marked by high inflation, News Corp faces difficulties, given its ownership of Dow Jones, publisher of The Wall Street Journal, and book publisher Harper Collins. Its newspaper portfolio includes The Sun and The Times in London, as well as the New York Post.
Revenue for the 12-month period ending June 30 reached $9.9 billion, a 5% decrease compared to the prior year, partially due to there being one less week in the financial year of 2022-23.
Despite this, News Corp expressed optimism about the future, with Thomson saying, “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.”
The company highlighted the success of its Dow Jones unit, which focuses on business news and achieved its highest profitability to date. Additionally, the Foxtel business saw growth in subscribers to its Binge and Kayo streaming services.
News Corp recently implemented widespread staff redundancies to reduce costs. Its book publishing arm experienced lower revenues due to a drop in book sales, while its digital real estate assets faced challenges in the Australian and US housing markets.
A decline in Australian real estate listings, particularly in Sydney and Melbourne, impacted the revenue of News Corp’s property portals. The company also noted an $81 million write-down in its investment in PropertyGuru, a significant online real estate business in Southeast Asia.