News Corp Reports 75% Drop in Profits, Pins Hopes on AI for Remarkable Turnaround, US

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News Corp, the media giant owned by Rupert Murdoch, has reported a significant drop in profits of 75% for the year ended 30 June. Despite this decline, the company remains optimistic about the future, citing the remarkable opportunity of artificial intelligence (AI) as a potential driver of a remarkable turnaround.

News Corp achieved a net income of $187 million (£147 million) during the period, a significant decrease from the previous year’s $760 million (£598 million). However, chief executive Robert Thomson expressed positivity about the upcoming months, highlighting the potential of generative AI to boost the company’s fortunes. Generative AI has the ability to create text, images, audio, and other media.

Thomson also revealed that digital products accounted for over 50% of News Corp’s annual revenues for the first time, indicating the company’s growing focus on digital platforms. He believes that generative AI presents an opportunity to not only generate new streams of revenue but also reduce costs across the business.

The company is actively engaged in negotiations to determine the value of its unique content sets and intellectual property (IP), which it believes will play a crucial role in the future of AI.

News Corp’s full-year results attributed the decline in profits internationally to higher newsprint and sports programming costs, as well as lower book sales and negative foreign currency fluctuations.

The company’s UK division, News UK, which owns newspapers such as The Sun and The Times, experienced a decline in print advertising revenues. However, this decline was partially offset by growth in digital advertising, according to the results report.

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Aside from newspapers, News Corp also owns other prominent brands including publisher HarperCollins, the Wall Street Journal in the US, and TV channels in Australia.

In terms of financial performance, the company reported a decrease in earnings before interest, tax, depreciation, and amortization (EBITDA) from $1.67 billion (£1.32 billion) to $1.42 billion (£1.12 billion) compared to the previous year.

Thomson emphasized the durability and depth of News Corp’s revenue streams, as well as the impact of stringent cost controls, as they navigated challenging macro conditions, supply chain pressures, and currency headwinds. He expressed optimism about the coming quarters, highlighting factors such as easing inflation, plateauing interest rates, and early signs of stability in the housing market.

News Corp’s focus on AI and digital platforms reflects the ever-changing landscape of the media industry. As the company seeks to adapt and evolve, the utilization of generative AI presents an exciting avenue for growth and innovation. With negotiations underway to determine the value of its valuable content sets and IP, News Corp is positioning itself at the forefront of the AI revolution. Despite the decline in profits in the past year, the company remains hopeful about its future prospects while acknowledging the challenges they face in a rapidly evolving media landscape.

Frequently Asked Questions (FAQs) Related to the Above News

What caused News Corp to report a significant drop in profits?

News Corp reported a 75% drop in profits due to higher newsprint and sports programming costs, lower book sales, and negative foreign currency fluctuations.

How much did News Corp's net income decrease by for the year ended 30 June?

News Corp's net income decreased by 75%, from $760 million (£598 million) to $187 million (£147 million).

What is News Corp's outlook on the future despite the decline in profits?

News Corp remains optimistic about the future, citing the remarkable opportunity of artificial intelligence (AI) as a potential driver of a remarkable turnaround.

What is generative AI, and how does News Corp plan to utilize it?

Generative AI has the ability to create text, images, audio, and other media. News Corp believes it presents an opportunity to not only generate new streams of revenue but also reduce costs across the business.

What percentage of News Corp's annual revenues came from digital products?

Digital products accounted for over 50% of News Corp's annual revenues for the first time.

What factors contributed to the decline in profits for News Corp's UK division?

The decline in print advertising revenues contributed to the decline in profits for News UK. However, this decline was partially offset by growth in digital advertising.

What other prominent brands does News Corp own?

News Corp owns brands such as publisher HarperCollins, the Wall Street Journal in the US, and TV channels in Australia.

How did News Corp's earnings before interest, tax, depreciation, and amortization (EBITDA) change compared to the previous year?

News Corp reported a decrease in EBITDA from $1.67 billion (£1.32 billion) to $1.42 billion (£1.12 billion) compared to the previous year.

What are the factors that Robert Thomson, News Corp's chief executive, highlighted as reasons for optimism about the coming quarters?

Robert Thomson expressed optimism about factors such as easing inflation, plateauing interest rates, and early signs of stability in the housing market.

How is News Corp adapting to the changing media industry landscape?

News Corp is focusing on AI and digital platforms to adapt and evolve in the media industry and utilize generative AI for growth and innovation.

What is News Corp doing to determine the value of its content sets and intellectual property (IP)?

News Corp is actively engaged in negotiations to determine the value of its unique content sets and intellectual property, which it believes will play a crucial role in the future of AI.

Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.

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