Good day, and welcome to the News Corporation First Quarter Fiscal Year 2016 Earnings Call. Today's conference is being recorded. The media is invited to today's call on a listen only basis. At this time, I would like to turn the conference over to Mr. Mike Florin, Senior Vice President and Head of Investor Relations.
Please go ahead, sir.
Thank you very much, operator. Hello, everyone, and welcome to News Corp's fiscal Q1 2016 earnings call. We issued our earnings press release about an hour ago and is now posted on our website at newscorp.com. On the call today are Robert Thompson, Chief Executive and Bedi Singh, Chief Financial Officer. We will open with some prepared remarks and then we'll be happy to take questions from the investment community.
This call may include certain forward looking information with respect to News Corp's business and strategy. Actual results could differ materially from what is said. News Corp's Form 10 Q for the 3 months ended September 30, 2015, identifies risks and uncertainties that could cause actual results to differ, and these statements are qualified by the cautionary statements contained in such filings. Additionally, this call will include certain non GAAP financial measurements. The definition of and a reconciliation of such measures can be found in our earnings release and our 10 Q filing.
Finally, please note that certain financial measures used on this call such as segment EBITDA, adjusted segment EBITDA and adjusted EPS are expressed on a non GAAP basis. The GAAP to non GAAP reconciliation of these non GAAP measures is included in our earnings release. With that, I'll pass over to Robert Thompson with some opening comments.
Thank you, Mike. News Corp is on track in its transition to a more digital and increasingly global future, having integrated several recent acquisitions and built a powerful platform for sustained growth. We are focused on driving the long term expansion of revenue and profit and leveraging the potency of our brands while diligently confronting costs to maximize long term returns for all investors. During the last quarter, foreign exchange fluctuations obviously negatively affected revenue and EBITDA in our international operations, but this should not obscure the real progress made at many of our businesses. In fact, News Corp's revenues, excluding the effects of currency, grew 4% in the last quarter, underscoring the value of our shift to higher growth businesses and our prudent reinvestment strategy.
We believe the global economy is still in relatively uncharted territory with the U. S. Interest rate rise pending and emerging markets still subject to political and economic volatility. From a macro perspective, our core markets are growing, but not at an optimum We are particularly pleased with the progress at realtor.com, which is significantly ahead of schedule on key metrics. We are now by some reckoning the world's largest digital property listings company.
A majority owned REA has just announced plans to acquire I Property Group, the leading digital real estate operator in Southeast Asia. We also see a bright future in the U. S. Where the national real estate market is still gradually returning to health with recent increases in the volume of units sold and the potential for further expansion. The company's digital expertise and ability to harvest commissioned data has been enhanced by the addition of Unruly, Storyful and Checkout 51, all of which will have a positive impact across our businesses and around the world.
We are already seeing significant new contracts and business opportunity because of Storyful's and Unruly's unique skills in measuring the social and viral penetration of advertising campaigns. And Checkout 51 acquired by News America Marketing will provide us with real time information about consumers' buying choices. In the areas of data and advertise, we believe markets are on the cusp of significant upheaval. Contemporary advertising has been distorted by trash traffic, invisible impressions and mockable metrics to the detriment of advertisers large and small. Needless to say, and thus worth reinforcing, all newspaper ads are 100% viewable.
Respected brands and quality journalism will have a particularly profound value at a time when so many so called audiences are artificial. While musing on the value of the genuine and verifiable, it is worth noting the healthy multiples of financial news brands with some but limited global reach. There is no business news brand with the authority, the credibility or the reach of The Wall Street Journal and Dow Jones. Will Lewis and our team at the company are striving to make the most of a brand, a content set and an audience that are uniquely valuable. Baty will provide further depth and detail on our results for the Q1 of fiscal 2016, where our reported revenues were $2,010,000,000 compared to 2.11 $1,000,000,000 in the previous year.
Clearly, currency fluctuations had a negative impact. Income from continuing operations was $143,000,000 compared to 109,000,000 dollars while total segment EBITDA was $165,000,000 compared to $194,000,000 again reflecting the significance of currency movements. Reported earnings per share from continuing operations were $0.22 compared to $0.15 in the prior year. As I signaled, our expanding digital real estate operations are a powerful source of growth and reason for optimism. REA revenues and EBITDA accelerated versus the 4th quarter with a notable improvement in listing volume in Australia and a higher uptake of premium listing passages.
Realtor. Com continued to benefit from its integration into the broader News Corp family and is reporting robust revenue growth with a 33% increase year on year, significantly higher than our competition. Traffic continued to expand rapidly in the most recent quarter with average monthly unique users of 46,000,000, a 43% increase year over year, while mobile users rose by 64%. Engagement at realtor.com is also strong with our enhanced editorial coverage seeing a more than 200% increase in traffic year over year and reflecting the crucial role that the company's traditional skills can play in the contemporary marketplace. Extra attention is being devoted to our software and service business, which today accounts for approximately 20% of Move's revenues to ensure that we provide realtors and vendors and purchasers with the freshest and most accurate listings information and to improve lead generation and conversion.
With realtor.com gaining market share and momentum, we continue to expect move to be EBITDA positive this year and that number should ramp up in fiscal 2017. We are also heartened by the performance of both WSJ Advertising and the Professional Information business at Dow Jones. Advertising at The Wall Street Journal rose against the comparable period both for print and for digital with the technology sector being a significant contributor to revenue. It is perhaps not surprising that those whose trade is the purely digital should appreciate the power of the print platform, which is in essence a succession of prominent daily billboards for an influential, affluent, self selecting audience. Meanwhile, circulation revenue at the journal grew mid single digits, thanks to a new pricing schedule and healthy volumes.
Keep in mind that circulation revenue at Dow Jones has grown every quarter since News Corporation acquired it in 2007. The Professional Information business grew adjusting for currency vicissitudes for the first time in more than 2 years and certainly appears to be headed in a positive direction. Our risk and compliance business is thriving at a time of intensified regulation and government scrutiny and we are launching a suite of WSJ Pro products aimed at professionals who require a sector specific briefing about changes, opportunities and threats in their areas of expertise. That higher level of business intelligence obviously demands a higher price. Speaking of launches, just this week, the journal released its new WSJ City App, bringing the best business news to people who are in or care about the City of London.
This is but one example along with the new global additions of the journal of the potential growth internationally. I'd also like to point out the success at Barron's, who has experienced growth in circulation and advertising revenue both in digital and print in the U. S. And internationally, especially with the launch of a digital edition in Asia. Fox Sports in Australia performed admirably in the Q1 in local currency.
Advertising grew significantly and continued to gain market share as advertisers recognize the loyalty of the viewer base, the quality of the sports rights and the work done to create compelling programming between sports events. The digital presence has increased through FOX Sports Now and the large audiences for the Rugby World Cup despite the time difference with London. We are also excited by the expanded and extended relationship with Australian Rules Football with the agreement that FOX Sports will broadcast matches through 2022. We are confident that FOX Sports has the most valuable rights for Australian sports, which generate by far the highest ratings. Foxtel continued to expand its cable and satellite subscriber base and penetration has certainly been improving.
The situation is very different to that of the U. S. Where the vast majority of households already have cable or satellite contracts. In Australia, the figure is a relatively modest 30% penetration. Meanwhile, we are pleased that the ACCC has approved the Foxtel investment in the TEN network and we expect to benefit from use of the multichannel network joint venture for advertising sales and services.
As previously indicated, we completed the sale of the Amplify Insight and Learning business and our decision to exit from the digital education business should begin to show earnings and free cash flow improvement. We are proud of the work done by the Amplify team in creating a unique curriculum for the contemporary classroom and have no doubt that the new owners will continue to develop this remarkable resource. From our perspective, the departure from digital education is consistent with our increasing focus on free cash flow and the imperative to drive higher value for for shareholders. HarperCollins was, as expected, partly a victim of its previous year's success with the Diversion trilogy, which has inevitably reached its maturity, though its backlist value will endure for many years to come. Go Set A Watchman, the sequel of Particular Mockingbird, became the fastest selling book in the company's history, having sold more than 3,000,000 units during the period.
But that success was balanced by a general softness in the e book market, a trend evident to all publishers and one we are watching closely. Our News and Information Services segment declined this quarter primarily due to advertising softness in Australia and currency weakness. News UK faced some advertising challenges, but was vigilant controlling expenses and the rate of advertising decline improved modestly versus the Q4 in local currency. Given this advertising weakness, in both countries there are renewed efforts to establish direct relationships with advertisers and to provide them with improved reach and returns. Our new executive team in the U.
K. Is much energized and News UK is also leading in digital expansion, having overseen with our tech team in New York, the acquisition of Unruly, now being leveraged by our businesses around the world. At a time when some are struggling to discern the difference between adtech and fadtech, Unruly is able to instruct clients on the relative virality and sharing potential of their advertisements given its sophisticated algorithmic metrics, which can track consumer penetration. The value of its market intelligence is certainly clear to our own properties in the U. S, Australia and U.
K. Creative commercial collaboration is intensifying around the company. We expect to use the powerful distribution channels that are MarketWatch and The New York Post to help drive downloads of Checkout 51 at News America Marketing. At the same time, we expect Checkout 51 will be a valuable source of sophisticated consumer metrics that will benefit many external clients of News Corp and can also help us target internal marketing with greater accuracy and effectiveness. There is certainly no shortage of data in the world, but much of it is ill defined and superficial.
We are aiming to create a data network effect among our businesses with companies like News America Marketing, The Wall Street Journal, realtor.com and others all providing leads to one another in a virtuous data circle. And within the real estate sector itself, we are already sharing expertise in software and content. We expect to be able to repurpose techniques and tactics across that network, which now stretches from Texas to Thailand and from Indiana to Italy. In conclusion, while we have experienced understandable challenges in a couple of our businesses this quarter, we remain confident in our overall plans for digital and global expansion. And we are certainly pleased by the growth potential of the increasingly powerful platform that is our digital real estate business.
With that, I turn things over to our CFO, Bedi Singh, to expound on the financial detail.
Thanks, Robert. During the Q1, we approved a plan to dispose of the company's digital education business and we completed the sale of Amplify's Learning and Insight businesses on September 30. Results for that segment are now reflected as discontinued operations. For comparability, this call will focus on continuing operations, excluding the impact from the Digital Education segment in both periods. We reported fiscal 2016 Q1 total revenues of $2,000,000,000 down 4% from the prior year period.
As Robert noted, we were again impacted by currency headwinds, primarily the weaker Australian dollar, which declined over 20% versus the prior year and negatively impacted Q1 total reported revenues by $188,000,000 or 8%. Excluding the impact of foreign currency fluctuations, acquisitions and divestitures, adjusted revenues declined less than 1% compared to the prior year. We reported total segment EBITDA of $165,000,000 compared to the prior year period of $194,000,000 Currency fluctuations, again primarily the weaker Australian dollar, impacted total reported segment EBITDA by $29,000,000 or 15%. This quarter also includes $5,000,000 of costs related to the U. K.
Newspaper matters, net of indemnification. Excluding these, as well as acquisitions and divestitures, our total adjusted segment EBITDA was down 7% compared to the prior year. Reported EPS from continuing operations were $0.22 versus $0.15 in the prior year. The current quarter EPS includes a tax benefit from the release of valuation allowances due to the planned exit of the digital education business, which resulted in increased expected utilizations of the NOLs that we acquired from the purchase of Move. Adjusted EPS from continuing operations were $0.05 versus $0.13 in the prior year.
Now let's turn to the individual operating segments. In News and Information Services, revenues for the quarter declined $161,000,000 or 11% versus the prior year period. More than 2 thirds of that decline was related to the impact of foreign currency. Adjusted segment revenues declined 3%. Within segment revenues, advertising, which was 53% of segment revenues this quarter, declined around 13% or about 5% in local currency, which is a modest sequential improvement from last quarter.
Looking at advertising performance across our key units. At The Wall Street Journal, domestic advertising improved 3% versus the prior year quarter and an acceleration versus the Q4 rate, with both print and digital ad revenues up versus the prior year. We saw strength in technology, particularly in print. We also had solid gains in luxury goods and professional services. At News Corp Australia, advertising revenues for the quarter declined 30% or 11% in local currency as the marketplace was weaker than the prior year quarter.
We again saw softness in several categories, including retail, employment, finance and auto, with the real estate category showing modest year over year growth. We are actively examining the cost structure at News Australia and looking for additional operating efficiencies in the near term. At News U. K, overall advertising revenues declined mid single digits in local currency, a slight sequential improvement from last quarter. We saw some improvements in the real estate category like in Australia, but more than offset by continued weakness in retail, most notably the grocers.
The Times and Sunday Times outperformed the market, down low single digits this quarter, while The Sun remained weak, down low double digit. As Robert mentioned, we made several management changes in September, including As Robert mentioned, we made several management changes in September, including appointing Rebecca Brooks as Chief Executive, and a key focus is on improving the performance at the Sun, particularly its digital proposition. We expect to leverage the capabilities of the recently acquired Unruly to help achieve this. We announced last week that the Sun's digital content will be transitioning to a largely free model by the end of November, and we would expect the increase in audience to drive improved revenue and EBITDA. News UK also continues to look very closely at its cost base.
At News America Marketing, revenues declined 5% versus the prior year quarter due to continued weakness in FSI impacted by weaker industry pricing. Domestic in store advertising grew modestly this quarter. Total circulation and subscription revenues, which accounted for 41% of segment revenues, declined 6%, but were up 2% in local currency. Dow Jones Professional Information business, excluding currency, grew modestly this quarter, the first increase in 10 quarters, led by strength in risk and compliance and stability at Factiva. In Consumer, we saw mid single digit growth again at The Wall Street Journal and at News Australia in local currency, driven by subscription and cover price increases and higher digital paid sales.
Segment EBITDA decreased $22,000,000 in the quarter or 21% as compared to the prior year period and adjusted segment EBITDA was down 15%. While we benefited from strong performance at Dow Jones, results were more than offset by weakness at News Australia and the impact of currency this quarter. Also included in segment EBITDA was an incremental $5,000,000 negative impact related to higher legal expenses at News America Marketing for ongoing litigations. Turning to the Book Publishing segment. Revenues increased 1 percent and segment EBITDA declined 24% versus the prior year.
Adjusted revenues fell 2% versus the prior year and adjusted segment EBITDA fell 33%, primarily due to the difficult year ago comparison, which had higher divergent sales and weaker e book sales in Q1 consistent with industry trends. Total digital revenues for the quarter were 20% of consumer revenues, down from 23% in the prior year, primarily due to the higher e book skewing Divergent year ago comparison, which impacted total revenues by $23,000,000 this quarter. Divergent sold around 400,000 units this quarter versus approximately 3,700,000 units in Q1 last year. The release of Goalsetter Watchmen in July, which shipped around 3,400,000 units with the vast majority in physical copies had only a modest uplift to profits as we expected. In Digital Real Estate Services, total segment revenues increased 79,000,000 dollars or 71%, driven by the inclusion of move results.
Segment EBITDA was flat compared to the prior year period as operating results improvement at REA Group were more than offset by foreign currency fluctuations. Excluding foreign currency fluctuations, REA's adjusted revenue and adjusted EBITDA grew 21% 31%, respectively, an improvement from the prior year quarter driven by higher listing volume in Australia and increased depth penetration. As you may have seen, earlier this week, REA announced plans to acquire the balance of I property it doesn't already own for AUD 4 per share. The total cost for the acquisition is expected to be approximately AUD 500,000,000 or approximately US350,000,000 dollars which REA plans to fund primarily through new debt facilities. The deal is subject to court and shareholder approval and will likely close in the Q1 calendar quarter 2016.
IProperty, as Robert mentioned, has leading portals in Malaysia, Indonesia, Thailand and Hong Kong and a strong presence in Singapore. The deal is consistent with REA and Newscorp's plans to expand geographically and invest in high growth regions. Southeast Asia is particularly attractive given favorable macroeconomic backdrop, increasing property transactions and low online share estate advertising. Reported segment results include $85,000,000 in revenue and an EBITDA loss of $4,000,000 from Move, including approximately $4,000,000 of stock compensation expense. Excluding the stock based comp expense, Move would have been breakeven this quarter and we continue to expect it to be EBITDA positive for this fiscal year.
On a standalone basis, Move's revenues would have grown 33 percent versus the prior year quarter. The improvement was led again by the connections for co brokerage product and non listing media revenues, benefiting from the successful integration into the Dow Jones Programmatic Exchange and higher audience levels. We also saw a year over year and sequential improvement in the software and services segment, led by an increase in subscribers to its top producer CRM product. In Cable Network Programming, revenues decreased by $15,000,000 or 11% compared to the prior year quarter. Subscription revenues fell 12% as higher affiliate fees and subscriber gains were more than offset by foreign exchange headwinds.
Advertising revenues were down 8% impacted by negative foreign currency fluctuations, but up strongly in local currency benefiting from the Rugby World Cup and the new V8 and Formula 1 motorsport properties combined with higher underlying market share. Segment EBITDA in the quarter fell 13% due to negative impact from foreign currency fluctuations and expected higher programming rights costs related to the Rugby World Cup. Excluding the impact of foreign currency fluctuations, adjusted revenues grew by 10% and adjusted EBITDA grew by 9 percent. With respect to earnings from affiliates, Foxtel ended the quarter with over 2,900,000 total subscribers with the majority of growth on cable and satellite subscribers, which increased 8% compared to the prior year period. In the quarter, cable and satellite churn improved to 10.1% from 10.9% in the prior year.
Foxtel revenues for the quarter in local currency were up 3% versus the prior year and EBITDA was down 21% due to expected higher programming costs, primarily sports rights and fees and an expected increase in costs associated with higher sales volume and the public launch of Triple Play. Last week, TEN Network received ACCC and ACMA approvals for Foxtel's 15% investment for a total contribution of AUD 77,000,000 subject to confirmation from the Australian Foreign Investment Review Board. TEN will also hold roughly 25% stake in the multichannel network ad sales venture with Foxtel and Fox Sports. Included with an income loss from discontinued operations, in the Q1 of fiscal 2016, the company recognized a pretax non cash impairment charge of $76,000,000 reflecting a write down of the digital education business to its fair value. As I noted, the sale of Amplify's Learning and Insight business was completed on September 30.
The gross proceeds from the sale of Amplify Learning and Insight will more than offset any exit costs relating to these businesses, including severance. And importantly, we recognize a tax benefit of $151,000,000 as a result of the plan to dispose of the digital education business. We will continue to maintain support for the Amplify Access tablet business. We expect future costs to be minimal and these will be reflected in discontinued operations as Access is classified as an asset held for sale. We expect the full free cash flow and earnings benefit from the exit of the digital education business from fiscal 'twenty seven onwards.
So in summary, we remain focused on driving long term growth and believe News Corp. Is on the right track. We're always examining our asset portfolio and willing to make changes that maximize value per share and long term growth. Our decision to exit digital education reflects our view that free cash flow is a priority for News Corp and that the ongoing investment spend at Amplify was better suited within a different structure. We have aggressively shifted our focus to digital real estate and we believe that Move and REA Group will be core pillars of our profitability.
We've extended our real estate reach and expertise through investments in India and through REA's investment in Southeast Asia, which should be magnified by its planned buy in of I property. While Book Publishing faced some tough comparables this quarter, we are very pleased with the successful integration of our past acquisitions. We continue to with advertising trends geographically uneven, we're investing in digital products, actively addressing our cost base and using different levels to drive growth in circulation revenues. As we shift more steadily to digital and towards a more balanced revenue mix, our mastheads are evolving into unique platforms that provide valuable audiences, which we can leverage across our properties as is evident with the success of realtor.com and at REA in Australia. We believe that the steps we've been taking have put News Corp in a better position to drive long term value per share.
We're pivoting the company into faster growth segments we'll continue to reinvest and be balanced with capital returns. With that, let me hand it over to the operator for Q and A.
Thank Thank you. And we'll take our first question from Entcho Raykovski with Deutsche Bank.
Hi, Robert. Hi, Betty. My question is around Foxtel. We're obviously getting revenue growth, but there has been a significant step up in the costs. How do you think about those costs going forward?
Do you view the costs now providing effectively a base? Or is there are there some one off costs in this quarter which are likely which you're likely to cycle out of in subsequent quarters?
In the quarter, obviously, some of the costs were related to programming. So we had costs for the motorsports. And so I think those to the extent we have sports related costs, you'd expect them to recur. In terms of marketing costs, we're still actively marketing the new packages. And I think there will be some continuing costs for that, but we should see those tapering down in the second half of the year.
Obviously, with triple play, there will be customer support and installation costs that will continue, but we should see those tapering down.
And, Shafar, I could just add to Betty's answer. Obviously, sales in Q1 were up 38%, total subs were up 10% to 2.9 $1,000,000 It's a very dynamic market in Australia at the moment as you're well aware. There is some competition for example from Netflix, but what you have to realize is that the offering at Netflix is certainly inferior to that of Foxtel and indeed at Netflix is certainly inferior to that of Foxtel and indeed inferior to that of Netflix in the U. S.
And just to add to that, obviously, the full impact of the use of Shrybos that we've added hasn't yet flown through because the additions were in the second half of last fiscal year. You should see that flowing through as well as the year goes on.
Okay. Operator, we'll take our next question please.
And we'll take our next question from Fraser McLeish with Credit Suisse.
Great. Thanks a lot. I've got a Foxtel related question as well. Just quickly, I think you at the full year, you said you expected Foxtel EBITDA to grow in FY 2016. I'm just wondering if you're still expecting that given the Q1.
And also, it was helpful breaking out the cable and satellite growth. But I
was just wondering, are you able
to give us the number of Presto subscribers that are actually included in that base? Thank you.
I think we still expect Foxtel to show EBITDA improvement as the year goes on. And again, it's a factor of what Robert and I both mentioned in response to the previous question, which is you'll see the effect of revenues for the new subscribers going all the way through and some tapering down of the costs. We're not actually breaking out, I think, the Presto numbers. But needless to say, most of the growth that we saw came from cable and satellite subscribers.
Operator, we'll take our next question, please.
We'll take our next question from Alice Bennett with CBA.
I'm sorry, I've got another Foxtel question. I just was wondering if you could give us a sense where ARPU has come through relative to the $93 you talked about in FY 2015, but also just a sense of whether you're seeing any stabilization from the pricing cut, but also presumably some tearing down as cut, but also presumably some tearing down as Netflix penetration picks up in Australia. Just whether you're seeing those ARPU numbers start to base out or you think there's still further downside to come?
So I think with the new pricing packages, what we're seeing is that ARPU has come down a little bit, I would say, sort of mid single digits. We haven't actually given out the actual ARPU number. But what's happening, I think, with that is we're seeing churn has actually improved. And in terms of spin down, I think it's sort of on plan is the best way to put it. So we haven't seen anything significantly worrying with respect to spin down.
Just to supplement, Beatty, on the point of churn, it's down from 10.5 percent to 10.1%. Obviously, it's a very competitive market, but we believe we have a very competitive product.
Operator, we'll take our next question, please.
We'll take our next question from Alexia Quadrani with JPMorgan.
Hi, this is James Kopelman in for Alexia. I just wanted to ask you a question about the journal and video and mobile advertising. I'm just curious how if you can provide any insight on how mobile and video are progressing? And particularly given how rapidly mobile is growing at a couple of your peers, could you say anything about adding new marketers maybe are already advertising in other platforms that you might be bringing on to mobile for the first time? Thanks.
It's a very good question. We are seeing obviously significant growth in the mobile audience. And generally speaking in recent years that growth in audience hasn't been reflected in a similar growth in mobile advertising. What we've done by acquiring companies like Unruly and Storyful is to bring real mobile video expertise into News Corporation, not just at The Wall Street Journal, but across the company. And so that is enabling us to derive higher returns and set us on a track for longer term exploitation of obviously what is going to be a commercially crucial canvas.
Okay. Operator, we'll take our next question please.
We'll move next to Doug Arthur with Huber Research.
Yes. Just a question on HarperCollins and Book Publishing. You've had a number of tough comp quarters here with Diversion. How do you sort of see the pipeline in comps going forward? Thank you.
I think with Diversion, the next quarter, we should see some easing of the comps, even though Diversion was still, I think, pretty big for Q2. So I think that's probably the way to look at it. Obviously, the mix of books, any quarter compared to the prior quarter, it sort of like depends on what happened. So I think it is one of those businesses where we will continue to go quarter by quarter. But generally, we're very pleased with the way the book business is developing.
Think obviously we'll see how the Christmas selling season pans out.
Just to be more specific, clearly we had a great hit with American Sniper at this time last year and into the New Year. But just to give you a range of figures that highlight the difficulty of comparison, which is a great challenge for the team at HarperCollins. Last year in the Q1, the Virgin generated about $25,000,000 in revenue off about 3,700,000 units. In the just completed quarter, it was $2,000,000 or 400,000 net units. And also don't forget about 40% of those units were e books, which are higher margin.
So that gives you a sense of why the comps were so complicated.
We'll take our next question, please.
We'll take our next question from Justin Diddams with Citi.
Good morning guys. Just a question on Move. Impressive revenue growth for the quarter. I was wondering if you could just elaborate a little on where that growth is coming from, whether it's sort of increased volume and usage through the platform, whether you put price increases through on the Co Broke product and how you're driving that revenue growth that would be really useful?
Well, it's there are 2 things I think to highlight. First of all, it's not only an increase in the quantity of traffic. It's very high quality traffic. And that's leading to in particular in the Co Broke area an increase in revenue that's quite significant. I think overall the revenue rose 33%.
You might have noticed earlier this week a company that starts with the final letter of the alphabet, Z that is, Z elsewhere, was up 13%. And one other important component was media advertising, which is where the not only in the editorial content, but also in the approach to media advertising, we saw a significant increase. That was up 60% year on year. And so both of those components have made material improvement.
Operator, we'll take our next question please.
We'll take our next question from Andrew Levi with Macquarie.
Thank you. Just a question on the book segment. You mentioned that the industry trends are a bit weaker for e book sales. I just want to get your thoughts on what might have been driving that, whether it was related to releases or you think there's some of the industry issue at play at the moment?
Thanks, Andrew. Yes. I mean, it's sort of hard to tell in sort of precise detail, but I think it's obviously a mix of books will affect that. I think pricing can be a factor in that. So I think there's a number of things at play.
But generally, if you read the other book companies and what they've been publishing in terms of their results, I think there seems to be a general weakness in e books.
And to add to Baty's point, which is obviously correct, it's made particularly so in our case because of the diversion effect and its pronounced e book component.
Okay. Operator, we will take our next question please.
We'll take our next question from Craig Huber with Huber Research.
Yes. Hi. Just curious
how much thought you guys have given and your Board of Directors has given to potentially break up the company by either spinning off your news and information segment to a separate standalone public company or taking your entire Australian assets and spinning those off into Australian equity? Thank you.
Craig, I think one thing you will have noticed from the results is how the complementarity of our assets has created a powerful platform that it makes News Corp as it is far more than the sum of the parts. We couldn't have done what the team have done at Realtor without the newspaper assets. We couldn't have done what the team have done at REA without those newspaper assets. And you're seeing that complementarity play out in other ways. And as we get more and more data across the business, whether they be the newspaper businesses, the News America marketing or the real estate companies, we'll be able to share important demographic data.
And I think that does give us real comparative advantage. And what you're seeing at the moment in the ad market, as I mentioned in my preamble, at the moment there is a lot of tension between advertisers and agencies. And that's both in, for example, freestanding inserts area right across the newspaper advertising. And we genuinely believe that the asset mix we have is has created a platform for the future for the company and obviously for shareholder.
Thanks, Greg. Operator, we'll take our next question please.
We'll take our next question from Brian Han with Morningstar.
Hi. Thanks for Baty, can you confirm, did you say the earnings and cash flow benefits of divesting Amplify won't come through until fiscal 'seventeen? And how much did Amplify cost me is going to be cash burn in 'fifteen?
So in 2015, the cash burn was roughly about $200,000,000 There will be some benefit in fiscal 2016, though what I meant was like the full effect will be felt from fiscal 2017 onwards.
Okay. Operator, we'll take our next question please.
We'll take our next question from Alice Bennett with CBA.
I just had a question about data, which you're referencing quite a lot. Just wondering whether you're close to the point where data is becoming monetizable, I guess. 1 of your competitors in Australia has talked recently about programmatic finally turning positive for yields for their online display revenues because of their data and what they're doing with it. Are you at the point where you're close to monetizing it? Or is it more just sharing it with other parts of your business?
We're certainly monetizing it. And obviously, there's data and there's data. There's high quality and there's low grade. And you look for example, one of the Checkout 51s benefits for the company and its efficacy is clear is that instead of intentions or context through the uploading receipts, you're seeing buying action. And that tells you a lot about not only the purchase, but the purchaser.
So for example, if somebody goes to a home improvement store and buys 15 tins of paint, some siding for the house, that person may be preparing that particular home for sale. That lead is invaluable to a realtor. And so at the same time, if that person is moving into an area or leaving an area, that's what you might call a typical catchment area a Wall Street Journal reader, it's an opportunity to attract a new subscriber. Now that's internally our ability to optimize that data and clearly we'll get more sophisticated as the months progress. However, we're also able to use that data for our clients, our advertisers and our partners.
Thanks, Alice. Operator, we'll take our next question please.
We'll move next to Eric Katz with Wells Fargo.
Thank you. So I assume you're consolidating I Property into your financials in calendar Q1 as you mentioned. Can you tell us the size, how much revenue and EBITDA does that business generate?
So we will be consolidating I mean REA will be consolidating I Property. And obviously, since we consolidate REA, it will flow upwards into our consolidation. EBITDA from that business is sort of marginal and revenues are sort of in the $50,000,000 range.
Thanks, Eric. Operator, we'll take our next question please.
And we'll take our next question from Alice Bennett with CBA.
Hi. Sorry, just one more question. Just with subscription revenues around the world, it's provided a bit of a buffer to your newspaper revenues the last couple of years. Just wondering with the cover price increases that have been fairly aggressive, whether you see that kind of tapering out over the next year or so? Or you still see further scope for those to continue to rise?
Alistair, I think I wouldn't agree with your phrase aggressive. I think we've been conscious of our different markets and the elasticity that different products have. And if you're talking about The Wall Street Journal and The Times of London, that's very different to the Daily Telegraph. But at the same time, we believe that these are beacon brands that they have the best journalism in the world and there remains a certain elasticity, which varies by segment. Thanks, Alice.
Operator, we'll take our next question, please.
We'll go next to Andrew Rykovski with Deutsche Bank.
Hi. Just a follow-up question around cable network programming. And obviously, there was news earlier this week that the EPL contract has been lost to another provider. I just wanted to understand, how do you think now internally about potential loss of subscribers given that contract is gone? And do you intend to backfill perhaps that spot with either direct agreements with the clubs or other spots?
And sure, obviously, you can buy any right as long as you're prepared to pay any price. But sometimes by our reckoning, any price is not appropriate for us or our shareholders. And as you say, there are some EPL fans in Australia. There's no doubt about that. But we're certainly not talking about prime time.
The 3 p. M. Kickoff in U. K. Is 2 a.
M. In Australia. So as you know, hardcore fans of anything in Australia are called Tragics. So the sweet spot for EPL at 2 in the morning are Tragics or Insomniacs. And the other thing you might have noticed yesterday is Bayern Munich beat Arsenal 5.1 in the Champions League, which may be itself an indictment of the value of the Premier League.
We'll
take our final question from Peter Stamulis with Evans and Partners.
Hi, good morning guys. I was just interested in your thoughts around this ad blocking technology and how it may impact your traditional mastheads and in particular advertising revenues going forward and how I suppose you mitigate those risks? Thank you. Look, it's much talked about and less seen to be honest in our businesses. The truth is that for example, Unruly will give us expertise in around ads and insight into the use of ads that is valuable to our clients and as well as to our products.
But the role of ad blockers is much more pronounced in what you might call commodity content sites, sites that have more noise than news and that's certainly not ours.
Great. Thank you, Peter. Well, thank you all for participating and have a great day and we'll talk to you next quarter.
That does conclude today's