Rupert Murdoch’s News Corporation has recorded a steep 75% drop in full-year profit but sees opportunities ahead as it expands the use of cost-saving AI-produced content.
The US-listed media conglomerate – which owns mastheads in the US, UK and Australia, along with book publishers, subscription television and real estate advertising assets – recorded $US187m ($A287m) in net profit for the financial year, down from the previous year’s $US760m record.
The result was weighed down by lower print and digital advertising at News Corp Australia, a division that includes flagship newspaper, The Australian. It also recorded lower print advertising at its UK news arm.
For the first time, News Corp generated more than half of its revenue from digital streams and the media company revealed an upbeat assessment of the potential of generative AI, capable of producing text, images, video and other media, to drive profits.
“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 News Corp chief executive Robert Thomson.
“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 disclosed it was producing 3,000 articles a week using generative AI.
The volatile trading period, marked by high inflation, proved difficult for News Corp, which owns Wall Street Journal publisher Dow Jones and runs book publisher Harper Collins.
Its newspaper stable also includes The Sun and The Times in London, and the New York Post.
Revenue for the 12 months to 30 June was $US9.9bn ($A15.1bn), a 5% decrease on the prior year. The financials were partly depressed by there being one less week in 2022-23 than in the prior financial year.
“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.
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The company’s business news-focused Dow Jones unit was a standout performer, posting its highest profitability to date. The Foxtel business was supported by increased subscribers to its Binge and Kayo streaming services.
News Corp recently reduced staffing costs through widespread redundancies.
The media company’sbook publishing arm recorded lower revenues as book sales dropped, while digital real estate assets suffered from challenging housing market conditions in Australia and the US.
A fall in Australian real estate listings, especially in Sydney and Melbourne, dented revenue in News Corp’s property portals. It also recorded an US$81m write-down in its investment in PropertyGuru, a large South-east Asian online real estate business.