News Corporation (NASDAQ:NWSA) Q2 2017 Earnings Conference Call - Final Transcript

Feb 09, 2017 • 05:00 pm ET

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News Corporation (NASDAQ:NWSA) Q2 2017 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. [Operator Instructions] We'll go first to John Janedis with Jefferies.

Analyst
John Janedis

Hi. Thank you. Just on Dow Jones, with the revenue there more than 50% digital, how quickly are the digital circulation and advertising buckets growing? Is the Journal primarily competing with Facebook and Google or traditional publishers for ad budgets and what is the time line of the $100 million in cost savings?

Executive
Robert J. Thomson

John, Robert here. I think the journal itself has quite distinctive audience as you can imagine both by virtue of income and demography generally. And it's difficult to imagine Facebook, Snapchat or anyone else replicating what is a unique audience. And I think that's what the team at Dow Jones are emphasizing. Our unique audience is growing because of its unique quality content and the push for WSJ2020 is not only to improve the flow of news, but to make much more efficient, the actual delivery of the content in ways that suit the contemporary user.

Generally speaking at Dow Jones, as you said, digital revenues are growing both in terms of advertising, circulation revenues up around 6%. And in terms of print this quarter, as I mentioned earlier, it's hard to give you a definite outlook for this quarter, but certainly thus far the decline is moderating.

Executive
Bedi Singh

And just with regard to the cost savings that we mentioned on the WSJ2020, we're expecting to take out $100 million on an annualized basis by the end of fiscal 2018.

Executive
Michael Florin

Thanks, John. Catherine, we will take our next question please.

Operator
Operator

Thank you. We'll go to Entcho Raykovski with Deutsche Bank.

Analyst
Entcho Raykovski

Hi, Robert. Hi, Bedi. My question is around Foxtel. Firstly around the churn rise, which has remained around that 15%, 16% mark. Do you expect that to decrease in coming quarters as perhaps you get into more favorable comps? And just on Foxtel as well, you've obviously detail the expected shutdown costs around Presto, will there be any output deals, which will remain on force that will also need to be renegotiated that might stay would be with the Foxtel platform and we continue to incur costs?

Executive
Robert J. Thomson

Entcho, I'll handle the first part of that question. As you say, Q2 churn is around 15.6% compared to 10.3% in the prior year during Q2, but clearly there a lot of offers that in the market. No contract sales offices, which aren't necessarily more fluid. Also last year at this time, we had the Rugby World Cup, whereas as you know Australia performed unexpectedly well, which was obviously auspicious facade. There is no Rugby World Cup, this year, but we are entering a crucial sales period for the key core winter sports Rugby League in Aussie rules.

And so, over the next two quarters, we obviously expect to see stronger results, but look there are office out there with the phasing out of Presto and the focusing on Foxtel play and it's certainly up to our team in Australia to prove to customers what we all know to be