Books, real estate, and Dow Jones: News Corp’s future bypasses consumer news
News media absent from News Corp’s Q2 profit pillars
“AI is more friend than foe”, claimed News Corp CEO Robert Thomson during a second-quarter earnings call on Friday morning that revealed that News Corp is profiting from real estate listings, book sales, and its Dow Jones “professional information business”.
The company’s second quarter revenues rose by 6%, to $2.36 billion, driven by the “three core drivers of the business” as CEO Robert Thomson put it: Dow Jones (publisher of the Wall Street Journal), digital real estate services, and book publisher Harper Collins. EBITDA rose by 9% to $521m.
Net income dropped by 21% year-on-year to $242m, although the comparable December 2024 quarter saw a spike due to the sale of Singapore real estate hub Property Guru.
News media revenues were flat, remaining at $570m, with increased circulation and subscription revenue wiped out by a decline in advertising, primarily in print. A rise in digital subscribers was also offset by a drop in print readers.
Mumbrella records show the yearly tempo of News’ News Media revenue
Earnings decreased by 5% to $70m, “primarily driven by lower contribution from News Corp Australia” as well as startup costs for the California Post. Digital now makes up 43% of total news revenue, compared to 39% in the second quarter of FY25. News Corp Australia’s digital subscribers rose by 4%, from 1.126m to 1.168m.
“There was an improvement in ad trends compared to the first quarter and a modest increase in circulation revenue,” Thomson said of the Australian news division.
“Last week we celebrated the launch of the California Post, which is bringing editorial enlightenment to the West coast and is built on the renewed profitability of the New York Post”, he added.
Dow Jones revenue was up 8% to 648m, with subscriptions to The Wall Street Journal up 11%, year-on-year.
Digital real estate — including the REA Group — was up 8% to 511m. At REA Group, the revenue spike was credited to “price increases, growth in add-on products and geographical mix, and higher financial services revenues” in the Australian market.
Book sales at Harper Collins rose 6% to 633m, driven by its Christian Publishing division and higher physical book sales.
News Corp’s second-quarter numbers
Chief financial officer Lavanya Chandrashekar explicitly ignored the News Media division in discussing the company’s priorities.
“ We remain disciplined in our focus on the three core growth pillars, Dow Jones, digital real estate, and book publishing, which collectively accounted for 95% of our profitability in the second quarter,” she said.
“News Corp has evolved well beyond the scope of a traditional media company.”
“We have the option of optionality”, Thomson told shareholders and media during the investor call on Friday morning when asked whether News planned to make any acquisitions.
Addressing a question on the impact of artificial intelligence on the market, Thomson said, “there is a fundamental misconception about the impact of AI on News Corporation”.
“AI is retrospective and synthesises generic content, sometimes imperfectly, but is past tense, often past imperfect,” he said.
“We have contemporary creative proprietary content, which is only accessed if AI companies pay us — our ‘woo or sue’ strategy. We’ve been consciously building a moat, and it is a moat with saltwater crocodiles, with sharks, and an even more dangerous species — lawyers,” he joked.
“More importantly, the moat separates commodity content from our premium prescient IP.”
He said that Anthropic is “already set to pay out $1.5 billion for the inappropriate use of pirated books” and News Corp will “get a large chunk of that money later this year”.
Thomson also touted the partnership with OpenAI, “whose expertise will enhance our editorial business and real estate products, while our editorial will enhance OpenAI products.”
News Corp declared a semi-annual cash dividend of $0.10 per share, payable on April 8.
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