News Corp shares have slipped almost 10 per cent after the company reported its quarterly results and confirmed plans to hike prices for its streaming platform Kayo Sports, as it seeks to capitalise on a strong start to the AFL and NRL seasons.
In a call with investors to discuss the company’s quarterly results on Friday morning (AEST), News Corp’s global chief executive Robert Thomson confirmed plans to raise prices for Kayo, but did not specify by how much or when the increase would take effect. “Kayo plans to implement a price increase as it benefits from its scale platform and high-quality production, which is driving record ratings at the start of the season for both the AFL and the NRL,” he said.
News Corp shares on the ASX were down 9 per cent to $26.22 in afternoon trading.
A basic subscription to Kayo currently costs $25 a month, while a premium subscription costs $35.
A message on the Kayo website on Friday morning said: “Kayo Basic will increase to $27.50/mth on your first bill from 9th May 2022 (or after your offer ends).”
The price hike comes after News Corp’s subscription video segment, which houses pay TV platform Foxtel, Kayo and other streaming services including Binge, posted a 6 per cent fall in quarterly revenue to $US494 million ($694 million).
News Corp has been exploring plans to float its Foxtel business – which includes the Foxtel pay TV platform, Kayo and other streaming services, on the ASX. However, those plans were recently shelved due to market volatility. Thomson said News Corp was still pleased with Foxtel’s performance.
“We remain pleased with Foxtel’s turnaround and harbour great optimism about its near and long-term future. We are continuing to explore all options for Foxtel to continue to maximise its value, while watching closely all developments in the financial markets.”