News Corp chief executive Robert Thomson has called for compensation from tech companies using the media conglomerate’s intellectual property to train AI engines, after the company reported marginally lower revenue in the face of an “insipid” advertising market.
The Murdoch-controlled media company — which owns Dow Jones and HarperCollins, and is publisher of The Wall Street Journal, The Times in London, the New York Post and The Sun, as well as The Australian, Daily Telegraph and Herald Sun in Australia — reported on Friday morning a dip in revenue of 2% to US$2.45 billion.
On a call with investors, Thomson called on tech companies to remunerate News Corp wherever the company’s IP has been used to train AI; when the company’s content has been surfaced “in response to users’ AI queries”; and when its IP is monetised by other parties through AI engines.
“We expect our fair share of that monetisation,” Thomson told investors. “Generative AI cannot be degenerative AI. The digital debate over content and journalism has evolved significantly in the past few years. And we appreciate the social and commercial commitment of our partners at Google, Apple, Microsoft and Meta.
“The A in AI cannot be ambiguity, nor can the I represent ignorance — integrity would be more apt.”
Thomson’s disquiet on AI comes in the thick of challenges faced in a soft advertising market, which saw ad revenue reported by the company fall by 6% to US$393 million for the March quarter, down from the US$418 million booked in the same quarter last year.
Despite beating the expectations of analysts on Wall Street, News Corp was able to report only a short string of wins on Friday morning. Among them was strong revenue growth at Dow Jones, which got the nod from Thomson early in the call and reported a revenue increase of $42 million on the same quarter last year, driven in no small part by acquisitions of OPIS and CMA last year.
News Corp pointed to a US$98 million hit from foreign currency fluctuations, which also dragged the company’s third-quarter results, along with tough housing markets in both Australia and the US, challenging its digital real estate services.
In Australia, falling house prices that flowed from a decrease in national listings “most notably in Sydney and Melbourne” contributed to a 10% decrease at REA Group, a fall in revenue to US$222 million.
Even still, Thomson maintained optimism over the local market, where he said Foxtel had made inroads to lure subscribers to its streaming services, driving subscription revenues to 26% of total circulation and subscription revenue through the quarter, up 6% on the same quarter last year.
“Streaming now accounts for two-thirds of the total Foxtel subscription base, and that revenue growth is more than offsetting the decline in broadcast. Fears that our world-class streaming products would be a catalyst for cannibalisation have been unfounded,” Thomson told investors.
“Broadcast churn is at near record low levels with Foxtel retail churn in March under 10%. That success is also a tribute to our marketing and customer service teams at Foxtel.”
As of March 31, the company said, Foxtel’s paid subscriber base totalled more than 4.5 million, up 6% on the year prior, thanks to subscriber growth on streaming platforms Kayo and Binge, where News Corp recently launched advertising on its lowest-tier subscription plans.
In the company’s news segment, revenue took a fall of 3% overall, made up of a 5% fall in Australia and a 4% fall in the UK, both of which were hit by foreign currency fluctuations, the company said.
News Corp reported that advertising revenues from its news segment had fallen $11 million compared with the same period last year, thanks again to foreign currency fluctuations, trembling digital advertising income in Australia, and a fall in print advertising in the UK.
By the end of the quarter, News Corp Australia’s digital news subscribers totalled 937,000 — up slightly on the 876,000 reported in the same quarter last year. In the UK, The Times and Sunday Times ended March with 494,000 subscribers, up on the 421,000 reported last year.
The Sun, meanwhile, reports to reach 199 million global monthly unique readers each month, up on the 171 million reported last year, and the New York Post reported to be reaching 147 million global monthly unique readers by the end of March, down on the 155 million reported the same period last year.
