Digital Set-Top Boxes Dent News Corp Profits

The provision of free set-top boxes by satellite broadcaster BSkyB (see Digital TV War Intensifies) has put a dent in the profits of its 40% stakeholder and parent company, News Corporation.

News Corp said in its annual financial results, released this afternoon, that the introduction of digital set-top boxes cost A$358 million (£144 million) in the fourth quarter of 1999. BSkyB brought in earnings of US$47 million (£29 million) in 1999; this compares to US$178 million (£110 million) for the previous year.

News Corp also owns News International, publisher of the Times, Sunday Times, Sun and News Of The World. Strong display and advertising gains across the papers pushed revenue up 7% year on year for the 12 months ended 30 June. Overall operating income, however, was down due to lower circulation revenue from the Sun, as a result of cover price discounting, and higher editorial costs across the group. The Times reported record advertising and circulation levels for the period.

Commenting of the company’s year, Rupert Murdoch, chairman and chief executive officer of News Corporation, said: “We have been extremely aggressive in seizing opportunities in the new media world, not only in the United States, but in other markets such as the UK, Australia and Asia. We committed A$480 million in forming epartners [see News Corporation Invests In Internet Partnership], a new media venture capital fund that gives us the flexibility to move quickly in this fast-paced sector.”

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