Foxtel’s re-pricing and packaging strategy introduced in November has paid off with a lift in subscribers but resulted in a steep decline in pre-tax profits.
The pay TV giant had 2.8 million subscribers as of March 31, a 7% increase over the previous year, News Corp reported today.
But in local currency revenues edged up by just 1% and earnings before interest, tax, depreciation and amortisation fell by 17%.
In US dollars the results were even worse, affected by foreign currency fluctuations. Revenues dropped by $77 million to $620 million in the quarter and EBITDA plunged by $61 million to $163 million.
News Corp blamed the decline on increased programming and marketing costs, the investment in Presto, the launch of triple play and negative currency fluctuations. Foxtel’s net income was $44 million, down from $76 million.
In the quarter cable and satellite churn improved to 10.9%, compared with 13.1% in the prior year.