News Corp quietly unveils 'Netflix of Sport' as Foxtel struggles
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News Corp quietly unveils 'Netflix of Sport' as Foxtel struggles

News Corp has quietly unveiled its "Netflix of sport" streaming service, amid signs of more weakness at its pay TV provider Foxtel.

A 'beta' trial website for the new service, dubbed KayoSports, went live on Thursday. It will offer access to over 50 sports for $25 per month (for two screens) or $35 a month for (3 screens), the website, designed to generate customer feedback, said.

The branding of the new service as KayoSports was previously foreshadowed by Fairfax Media.

News Corp on Thursday posted a 23 per cent increase in quarterly revenue to $2.52 billion. Profits rose 47 per cent to $128 million.

News Corp boss Robert Thomson has flagged the business' strong digital subscriber growth.

News Corp boss Robert Thomson has flagged the business' strong digital subscriber growth.

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However, Foxtel dragged down overall revenue due to changes in the packages subscribers have been choosing and fewer high profile events charging pay-per-view.

Average revenue per user fell 6 per cent. Lower advertising revenues and a new revenue recognition standard also weighed on the result, with earnings down 27 per cent.

Subscriber churn increased 0.2 per cent to 12.9 per cent, but there were more users at the end of the three months with 2.9 million up from 2.8 million the quarter before. This growth was largely a result of new Foxtel Now subscribers and Fox Sports' commercial subscribers being included in the result.

Foxtel is 65 per cent owned by News Corp, and 35 per cent owned by telecommunications company Telstra after a merger with Fox Sports in April.

The pay TV platform was being "enhanced," Mr Thompson said, with a new Fox Cricket channel, the roll out of ultra-high definition 4K resolution and "advanced work on a sports-only IP offering".

The media company's Australian newspapers, such as The Australian, had 442,400 digital subscribers by the end of the quarter compared to 375,400 last year, at a time when the print advertising market continues to slide.

News Corp's advertising revenues dropped 7 per cent compared to the year before, in part driven by poor results in Australia and the United Kingdom. A "modest" increase in digital advertising helped offset some of the declines.

“In the first quarter, our growth in revenue and earnings reaffirmed our strategy to focus on digital development, and to put particular emphasis on subscriptions as the advertising market continues to evolve," Mr Thomson said in a statement.

He said digital paid subscriptions had risen at many of the company's mastheads, with The Wall Street Journal's average daily digital subscribers at 1,584,000 and The Times and Sunday Times at 263,000.

The Sun's 74 million global monthly unique users fell from 84 million the year before.

News Corp's real estate listings platform REA Group posted 17 per cent revenue growth over the three months to September 30, while earnings (before interest, tax, depreciation and amortisation) were up 23 per cent to $130.9 million.

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REA Group chief executive Tracey Fellows said in a statement that the property platform's strong quarterly results show that "despite tougher market conditions, our customers and consumers are clearly seeing value in the products and experiences we are creating".

Australia's once-hottest property market, Sydney, has rapidly been cooling with lower levels of sales, price falls and fewer developments after years of booming buying and selling activity.

There was a 3 per cent decline in listings across the country, with an 8 per cent drop in Sydney and 1 per cent in Melbourne.

REA's share price has fallen 22 per cent from an August 20 peak of $93.35 to $72.61 on Wednesday. Over the same period, Domain's share price fell 30.7 per cent to $2.46 while All Ordinaries fell 7 per cent. Fairfax Media (owner of The Sydney Morning Herald and The Age) has a 60 per cent stake in Domain.

An earlier trading update from Domain ahead of a merger of Fairfax and free-to-air broadcaster Nine Entertainment Co reported total revenue down 1 per cent as digital revenue increased 6 per cent for the first 15 weeks of the financial year. The announcement resulted in a sharp share price drop.

News Corp's share price increased 3.27 per cent to $19.12 by 10.27am on Thursday.