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Presto sale results in $21m loss for Foxtel

The decision to shutter streaming service Presto has cost $21 million for Foxtel and $11 million for Foxtel's part owner News Corp this quarter.
Written by Corinne Reichert, Contributor

The sale of Australian subscription video-on-demand (SVOD) provider Presto to pay-TV company Foxtel has resulted in a quarterly loss of $21 million (AU$27 million), News Corp has announced.

"Foxtel's net income in the three months ended September 30, 2016 included a $21 million loss resulting from Foxtel management's decision to cease Presto operations in January 2017," News Corp said in its financial results report [PDF].

"Earnings of affiliates were negatively affected by $11 million, which represents the company's share of that loss."

News Corp's results revealed lower overall earnings before interest, tax, depreciation, and amortisation (EBITDA) for the quarter, partially driven by the closure of Presto.

"Foxtel's net income of $16 million decreased from $42 million in the prior year period," News Corp added.

"Presto had approximately 130,000 paying subscribers as of September 30, 2016, who will be invited to transition to the new Foxtel Play packages."

News Corp's overall revenue was $1.97 billion for the quarter, down 2 percent from last year's $2.01 billion, while EBITDA was $130 million -- 21 percent lower than the $165 million reported a year earlier.

Presto, previously a joint venture between Seven West Media and Foxtel, was fully acquired by the latter in October, with Presto customers to be moved across to the Foxtel Play streaming service as of December.

"It has been great working with the team at Seven on Presto, and we look forward to future collaborations," Foxtel CEO Peter Tonagh said at the time.

"We are delighted to be able to offer Presto subscribers access to the new look Foxtel Play, which we know will be highly attractive to them."

Foxtel announced several new Foxtel Play packages, with existing Foxtel Play customers to be transitioned over to the new pricing in December.

Presto will cease operations at the end of January.

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