News Corp tabloids struggle to hit ambitious subscriptions targets
Subscriber growth at News Corporation’s local tabloids has stalled as the publisher grapples with how to reach an ambitious goal to increase the number of readers who pay for news.
The internal figures, contained in filings in New York overnight, show the total number of subscribers at The Daily Telegraph in Sydney, the Herald Sun in Melbourne, the Courier Mail in Brisbane and the Adelaide Advertiser was at 547,411 as of June 30. That is down almost 2 per cent in a year.
The figures include subscribers to the newspaper and the publications online. They show a fall of more than 10,300 across the mastheads.
The one bright spot for News Corp was the performance of The Australian, the company’s national masthead. The figures show the number of subscribers has grown 15 per cent to 318,417 in the past 12 months.
News Corp Australia’s executive chairman Michael Miller said the company had 1.1 million subscribers across all of its publications – across The Australian and the tabloid newspapers that number stands at 865,828 – and the publisher had set itself a target of two million subscribers.
The new figures, however, show the difficulty of that task. News Corp tabloid newspapers, once with significant reach, were the source of the company’s influence in state and federal politics. Much of that audience has since drifted to other publications, including the company’s free news.com.au.
The Telegraph has 152,457 print and digital subscribers, the numbers show, up just 4641 in 12 months. The Herald Sun gained 4861 subscribers to hit 150,887, while the Courier Mail lost 6575 subscribers. It now has 140,532 online and print subscribers. The Advertiser lost 5807 subscribers, or some 7 per cent, to fall to just over 103,500 by June 30.
As first reported by The Australian Financial Review in June, News Corp is relying on deeper cost cuts and higher print advertising sales to make up for lower-than-expected digital advertising and subscription revenues.
Figures contained in a presentation given to staff by Mr Miller that month showed digital advertising was expected to add 19 per cent less than forecast as a proportion of its budget bottom line in the year to June 30. The proportion from subscriptions was 12 per cent below forecasts.
But those declines were offset by other areas such as print advertising, which grew its share of revenue by 12 per cent on company forecasts, and cuts to expenses, which added an extra 2 per cent in savings.
News Corp has cut more than $US160 million ($245 million) in costs over the past six months, and last week delivered above-expected earnings despite a sharp 75 per cent fall in net profits. The company also owns publications including The Times of London, the Wall Street Journal, as well as Foxtel and stakes in REA Group and Move, a North American real estate platform.
Analysts and brokers, however, are bullish on the company’s prospects. At the time, Macquarie’s Darren Leung said more costs had been removed than expected, and earnings were 10 per cent ahead of forecasts for the last quarter.
Aitken Mount Capital Partners’ Angus Aitken hailed the results as “very strong”. “We think [News] is mispriced and can double, and that isn’t even an aggressive call,” he wrote in a note to his clients.
News Corp shares fell 2.3 per cent, or 78¢, during trade on the ASX on Wednesday to $33.11. They are up 20 per cent over the last six months.
