News Corporation (NWSA) Earnings Call Transcript & Summary

Thank you. Hello, everybody. I'm Gavin Deane. Welcome to the Deutsche Bank Conference at Palm Beach. I'm joined by Susan Panuccio, CFO of News Corporation, a long-standing member of the community here in Palm Beach at our conference. So thank you for attending again.

I thought we might start with something a little bit macro. You run a business that is across a number of geographies, U.S., U.K. and Australia, in particular. How do you see the business environment across those geographies for your businesses?

First of all, thanks for having me again. It's great to be back. So yes, we start actually each of our Board meetings with a comparison of the market for the U.K., Australia and the U.S. And actually, from a very, very high level macro perspective, the key metrics are pretty similar. Interest rates have gone up in all of the markets, albeit in Australia, the interest rates are a little bit lower than what we see in the U.K. and the U.S. And most of those markets, they've plateaued and people are expecting the interest rates to come down. Inflation is coming down from the COVID heights in all of the markets. But across all the markets, they are above the banks' target ranges. And unemployment is starting to [ capture all ] the market. So all of that is relatively consistent. But actually underneath that, there's quite a lot of differences in the markets. And we probably see the most playing out in real estate. We will probably get on to this a little bit later, I think. But the Australian market, against all odds, has bounced back really, really strongly. And that property market is very, what we would call, very, very hot at the moment as the U.S. market is obviously still pretty challenged. And in fact, I think in Q2, we saw existing home sales dropped to sort of 30-year low. So you couldn't get a greater juxtaposition to the market, notwithstanding the very headline macro numbers are the same. And then, of course, we've got two elections coming up in the U.K. and the U.S., and I'm not about to sort of judge I guess, the outcome of those elections. But it will be interesting to see how they play out, and I'm sure they'll have an impact on the market.

Dow Jones, should we start talking about Dow Jones? Recent performance has been strong. Professional Information, in particular, has been strong. You're on the record of saying that PIB might be the largest contributor, from a profitability standpoint, to Dow Jones this year. What's the scope for that to expand further?

Look, PIB is actually, I think, just such a fantastic component on Dow Jones. I mean you and I have talked about this over many years. I think you've probably been pitching it before I cottoned on to the fact that it was a great business to invest in. When we separated back in 2013, it really was Factiva for the engine for that particular part of the business, that's the content aggregation from licensed products all around the globe that we aggregate and package out. And we had Risk and Compliance in that segment probably back in 2014. I don't know the numbers exactly, but I guess it was sort of sub-$50 million in revenue. So that's sort of started its life as an extension from the Factiva database. And you sort of fast forward to now where we have separated out Dow Jones from the original News and Information Services segment, we did that a couple of years ago, and just recently, in Q2, we've now provided more transparency to our investors in relation to PIB because it's such a growing important part; so it now comprises Risk and Compliance, which has been seeing double-digit growth in the teens. So the last couple of years, in fact, last year, 2023, it delivered roughly $250-odd million of revenue, which is great, I think sixfold from where it started its life. Seeing regulation increasing around the globe and within the different markets, and we're seeing sanctions as a consequence of the sort of the economic and political and social turmoil that we see around the world ever increasing, and that really is the lifeblood of Risk and Compliance. So we see a really, really strong pathway to that particular business as we go forward. And then the other component of PIB now is Dow Jones Energy, which is -- comprises of OPIS and CMA, the two acquisitions that we made a couple of years ago. And those businesses were just great acquisitions. I think Robert, my boss and the CEO, he long held the belief that energy could be quite an attractive add-on for the PIB businesses. I mean he's particularly keen on Factiva and has long lamented the fact that we haven't been monetizing it in the way that he had hoped. And so we're very fortunate that we're able to pick up those businesses from a fourth disposition from S&P. So we got them at pretty good multiples. We always have a look at assets in this area. And as you will know that they trade for a particularly lofty price. So we've got those businesses at very good multiples. And they have lots of characteristics that we like. They were businesses that we knew we could integrate well into Dow Jones, we could leverage off existing content and product they already had within the business, and we could leverage the sales team. They have high recurring revenue, so over 90%, and largely digital, 100% digital. So lots of components that we like. And we've seen really strong growth. I mean they grew, I think, [ 15% ] in Q2 from a top line perspective, 20% in Q1. So they've been growing at a higher rate than what they were pre-acquisition. And we do believe that actually with the renewable focus coming up, that there are areas that we can branch out into those particular businesses that will help them grow. So again, we see actually a really, really strong pipeline of activity. So that they're the businesses that comprise PIB. And yes, you're right. They -- we did say on the record that we are expecting it to deliver over 50% of the EBITDA for Dow Jones, which is just a terrific transformation of that business. And we're really hoping that the investment community will start to see Dow Jones as a very different business to the rest of our traditional news media businesses because it is.

And then how do you see the margin profile going forward with that shift in mix?

Yes. We delivered, I think, a 27.9% margin last quarter. And in 2023, it was just shy of 23%, so we've already seen margin expansion as a consequence of that. And as we move forward, and we expect that, that level of growth will outpace the level of growth within the consumer business. I mean, we will expect to see [ management ] expand. We don't give guidance on exactly what that looks like. But we would expect to see that expand as we move forward.

Digital subscriptions at Dow Jones, there's more opportunity for growth there? And how do you see that domestically, say, domestically meaning U.S. in this case versus internationally?

Yes. It's another part of the business that we've been really pleased with. We now are at, I think, about 78% of our revenues being digital across the journal. Part of that is -- all Dow Jones, [ there's ] a whole part of the acquisitions, which we've talked about. But we have seen really strong growth in our digital subs, both within the Wall Street Journal and across Dow Jones. And so we do see, even within the U.S. market, still quite a lot of scope for growth. We've got a U.S. election cycle coming up this year. That is always helpful for subs growth as we think about the pipeline. And the team has started just recently focusing on bubbling in the last 12 months. I mean we've seen a little bit of bubbling pre-that but they've been more focused on it in the last 12 months as they're pivoting to look at subscription growth as opposed to just subscribers. So how do we get a subscriber to have multiple products? Of course, people who are deep into the subscription business will say that the more products you can get a consumer to engage in, the greater engagement you'll get, I hear always from the marketing team, greater engagement that we'll get in the greater...

In investment banking world, we call it product density.

Correct. Correct. And so we're sort of coming up to, I guess, the cycle for that in nearly 12 months. So we will have a look and see how is that going to manifest itself with us being able to step it up in pricing, how is that looking from a churn management perspective? So within the U.S. market, we do still see that there is significant opportunity for growth, and we feel pretty good about that. I think on the international side, I've been in this role for 7.5 years and get asked this question a lot. And I've always sort of over the last few years, [ saying ], I think there's a great opportunity internationally. And we've never really quite got into a stride in relation to that. I would say that there seems to be a real difference in the team at the moment. And there's a great momentum that I hear them talking about in relation to creating products that can exist in different markets. And I do think AI will help with that. So I think there's a lot of opportunity for us to leverage AI in translation activities that could help us go into some of the foreign markets. And we can start to have a look at more localized products that can get penetration in those markets, which I think will be really beneficial. Now, we're not going to go into a [ different ] market around the globe, I think we'll do this in a targeted manner. But I do think the teams are really starting to come to grips with what that opportunity could look like. At the moment, I think international is only 12% for overall base, it's actually pretty low when you think about it. And if you think about the Wall Street Journal as a brand, it's such a well-known brand across the globe, high-quality business information. And I do think that we can build on that as we go forward. So I think on both fronts, given the ebbs and flows of audiences and different news cycles, I do think that there's a lot more progress that we can make.

Maybe let's go to books, [ paper ] columns. Had a little bit of a tough time, but actually in the more recent period, a stronger recovery. How do you see that progress so far in this -- in your fiscal year?

I was listening to something Robert said last week, and it made me chuckle. He said that half of columns last year had long COVID, which I thought -- it made me chuckle for the way you described it, not because of the financial impact that it had last year. I think you're right. It had a really tough year last year, I mean, partly because of the Amazon reset with their logistics and having every set of their returns partly because of the inflationary pressures that we've seen in relation to [ Pretty ] manufacturing. And partly because, quite frankly, we didn't have as good a frontlist as well we have had in other years, and that happens sometimes. I think when we think about this current year, I mean it's nice to see them return to growth. They've had a great start to the year. The first half has been really, really strong. It had very good frontlist. The backlist has performed strongly. Christian Publishing has done incredibly well. I mean the thing that always amazes people is that we're the -- I think we're the largest publisher of Bibles in the world, which people don't naturally associate with us. But Christian Publishing has been doing very, very well. And off the back of a very difficult year last year, Brian and his team have really focused on the cost base. So they obviously [ partook ] in the 5% headcount reduction that we did across the globe. So that has really helped. They've worked really hard to rebase their cost base. So they have moved some of their manufacturing from different parts the world, [ preferences ] that come out of China, they're looking to publish on the books in India now. That has a benefit in the sense that it's a lower cost. It also has lower freight costs, depending on where we're shipping it across the market. We're seeing freight costs come down, albeit we are looking at the Red Sea and the activities that are happening over there. We're not really seeing an impact on that to date. So I think a combination of that and some of the pricing work that we did last year, so we increased a lot of our prices across our books, has really helped that business. And I do think that it's putting in good stead for the rest of the year.

What does that mean in the medium term for margins and growth?

You are always asking those questions.

Sorry, there's people out there who want to fill out models.

We -- look, we've always thought of HarperCollins, I guess, pre-COVID and pre last year, as a business that has -- is a pretty steady business. It grows anywhere between 3% to 5% of the top line. It's a really good cash converter, has very low CapEx. And I guess we'd expect to see a return to that. I think the margin so far have picked up at a higher rate than what we had thought they would at the beginning of the year. So we've had a better performance than what we thought, we always knew we had a better performance this year just because results were not great last year. But we have been pleased as a consequence of the things I've just talked about, that the margins have returned to a pretty robust view. So I think we would hope to see that matches. Margin expansion will happen, particularly as the shift in the composition of the revenue streams change.

Spotify. You've done a partnership with them on the audio side. Is it worth spending a couple of minutes on what that is exactly and then how it impacts the business going forward?

Yes. I mean, look, it's great, actually. So we launched a product with Spotify, I think, in the Australia and the U.K. markets in October and the U.S. in November. It's a consumption-based model, a new product that's out in the marketplace. I think they've got an initial introductory offer of $10 from a consumption perspective. And we're sort of thinking, and I guess, they are hoping as well, that it will be additive to the market. So as opposed to necessarily cannibalizing existing sales, it's going to be additive and attract a new demographic of audience with new products. I mean it's early days, and so time will see how that will evolve. But Robert talks in a very high way about the management team and the leadership of Spotify, we have a good working relationship with them. And it's off to a really good start, and we haven't quoted the numbers properly. But what we have seen though is that in Q1, before the product was launched, our digital revenue, which was e-books and audio, grew about 3%. And in Q2, they grew around 15%. So we've seen a significant uptick since that product launch. And the other thing that is interesting to us is that e-books really have plateaued. I mean they have over the last couple of years. I think we all thought that when e-books came out, it would probably go down the same path of the traditional newspaper model, and that hasn't been the case. And what we saw in Q2 was audio comprise 49% of that digital revenue, which is really interesting to us. So I think we see that there's a huge pathway for growth within audio going forward. And I guess the traditional books are holding up really well, too, because people like that tactile experience of reading. So we're pretty pleased with how that's going, actually. And we hope that, that will help the margin profile for the [ columns ] as we move forward.

We touched for a second or you touched for a second on AI before. Everyone is talking about it. There are many out there trying to operationalize it, there are many trying to quantify the AI component of their revenue base. Some are obviously seeking to get paid effectively for the content that is being used to train it. How do you see AI in your business?

How long have we got to talk about it? As sort of -- I think there's the good, the bad and the unknown, is the way I sort of think about it. And I have a boss who has been very vocal about the technology companies for a long, long time, 15 years plus. And Robert talked quite a lot about the risks associated with it. And of course, from a generative AI perspective, every content created, you're thinking very, very hard about what impact that will have on our business. But Robert also has been talking about the compensation models, and we have had seen some success with our traditional publishing business in doing some of these deals with the content providers. But when we think about AI and we think about our content, Robert talks very much about the leadership of these tech platform businesses and how they think about the content integrity of journalism and why that is so important. And I think it's his belief that we do have leaders at some of these companies that do genuinely get that, that it is really important that we have guardrails around the safety of that. Now, are we going to get it right? How is it going to manifest itself going forward? We don't really know. But what we can say is that the conversations that we're having with some of these companies at the moment are progressing well. We are seeing that there is a deep recognition for the fact that content integrity needs to remain, and we need to protect it. And so when we think about the deals that we're looking to strike at the moment, we're thinking about the guardrails that we have to have in place in order to ensure that, that content integrity remains as we're thinking about the compensation model. Compensation models, in one sense, are far easier than the first point. And so on the compensation model, we're having to think about the incredibly valuable backlog of content that we have, that we have built over decades, hundreds of years in some cases. And how does that go to training some of these models? There's also the updates to the model because once they have been trained, they have to be continually updated. So we're having to think about that. We're having to think about how these models may simplifize data when a query comes in. And so from a variety of different ways, including breaking news and updating the model, we're having to think about how might we monetize those throughout the course of these deals. I think the other thing, too, that we are thinking about is how can we work with these companies to help our products be better. And so one of the things that we struck, when we stuck the Google deal, from a compensation perspective, was that the teams actually get together on a regular basis to have to think about the products because we got to be honest, they have the greatest tech minds in the country sitting within the businesses. And if we can leverage from that in order to help our products be better, I think that's a really important thing. So from a sort of a commercial perspective, that's the way we're thinking about. Within our own business, I think we see lots of opportunities on both the revenue and the cost side. On the revenue side, whether we can create new products, whether it's half the columns, so then you think about voices and how they might read books in the future, whether it's around the personalization that we may be able to create in order to drive new revenue on products, I think, is really important. And then on the cost side, we hear a lot about it, and I have to ask the people in the business to show me what it's like. And I was in London recently, and one of the things the journalists have shown me is that when they create an article in a digital world, [ they ] do the research on type of the article. And they've now got AI tools embedded within their content management system, the digital system, that can help them published that story in a much more efficient manner. So the journalists are quoting their number, but they should never quote a CFO number because you -- remember, if the journalists are quoting your number, around 30% of their time can be saved in creating an article and getting it published as a consequence of these tools. So what do some of them do? They can have a look at all the articles that are being published, everything that we've got in our library and they can suggest headlines for that article so it comes up with a list of 5 headlines. The journalists can accept them, they can reject it, they can modify it, but it certainly helps with that prompt. It helps them identify keywords for search optimization. So it will again go through its library of content and be able to assist in that. And it will also tag [ obligations ], so we can obviously use it in a much more efficient manner. And by just doing those simple things, it's saves 30% of their time in publishing the story. So it's amazing.

And that's tools they're using now or tools they're...

Tools they are using now that we've embedded within the digital system. So we think that, that is amazing. And then we've got lots of opportunities and sort of examples across the business. So we're sort of -- we're having to think about it from both angles. So we think it could be transformative, actually, across the business. And the businesses are really engaging in it, which is really pleasing to see.

Great to hear the journalist in particular...

I find it with the journalists, once they get their mind around something, they are quicker than anyone that is not doing things. It may take a little bit longer because they love to argue. Once they get their minds on it, they actually, actually...

No. Debate is part of the process. Maybe we should go to digital real estate. You touched on this at the beginning as well, but the U.S. housing market has been difficult. You have investment plans at REALTOR. There's increased competition in the market. You would -- just discuss that dynamic for a bit for us.

Yes. Look, I think it's -- from the COVID highs, we certainly have ended up in the lows for the U.S. housing market. And yes, it is a difficult time over here. But we know from the Australian market that once it bounces back, it bounces back hard and fast. And so we want to ensure that we're in the best possible position with REALTOR, particularly given competitive environment that we can take advantage of that when the market turns, which it will turn. To that end, we've got a new CEO, Damian Eales, who is in that business. I think fortunate that I worked with him when I was down at News Corp Australia back in 2013. He's a terrific guy, a terrific leader. He is someone who is incredibly detailed and focused on a really good execution. So he's come into the business. He's having a look at the core proposition for the core lead generation model and how our systems are set up within that business. And I think he is [ in contention ] that we could be better. And so we have started to invest in parts of that business. The tech stack, particularly, quite frankly, is not good enough. I think it was so clunky, from an agent perspective, to use multiple systems, multiple log-ons, multiple bills. It didn't make for a great user experience, so we're doing work to make sure that, that is better. We're doing work on how do we build out the content set, so how do we make sure that every listing has as much information as it possibly can because we know that's what consumers want. We know that when they go into a website, they want to look at not just the stats and figures around a home and all the photos. They want to have a look at what's in the local community, what are the different points of contact, transport, schools, et cetera, they can look that. And so we're having a look at how we build out those content sets to make sure that we have as much as possible. That will help with customization on the journey as well. And we've also been having a look at some of our products and which ones we focus on. So the seller model, which we acquired a business called UpNest a little while ago, that's clearly going to be important as we scale out the business with perhaps some other areas we can leverage off other providers like rentals in order to get a more efficient model going forward. So, they're probably the main focus areas. We're also having a look at obviously marketing expenditure. Last year's marketing expenditure did drop quite a lot just given the macro condition in the environment. And the one thing Damian is very good at is pitching that business internally. I had actually -- I had a CFO conference last year, and I asked all of the CEOs to come and talk about what makes a good CFO. And Damian spoke for about 20 seconds on that, and he spoke for about 5 minutes on how those businesses could help them market [ real-time ] across our network. So didn't actually hit the brief, but what he is doing though is really leveraging the assets that we have within our portfolio for the New York Post, The Wall Street Journal and actually our sister company in Fox to ensure that we can use the audiences from those particular products to help drive more audiences through REALTOR, which helps us marketing. So I think you have to look at it in a variety of different ways.

You have recently announced a rental listing agreement with Zillow. Again, maybe it's worth spending 30 seconds on exactly how it works and then how you see the impact going forward?

Yes, we started to go down the path of building out an adjacency in rentals. But the reality is that it is expensive, it is time consuming. And there are other players out there who have better rental propositions than us, and so we're a business that I think has exercised very good discipline around allocation of capital. And as I've just said, we've got quite a lot of investment that we need to make within that REALTOR business to ensure that it could bounce back strongly when the market picks up. And when we looked at rentals, actually, Zillow has a really strong rental proposition. We thought by doing a deal with them, we could enhance the product that we have. We know that rentals are really important from a consumer perspective because it's the first step on their home-buying journey. And so actually, we've been able to save costs by not doing it ourselves, leverage off the audience and the proposition that Zillow has, enhance the proposition that we own -- that we have ourselves. So we actually think it's sort of a win-win all around, and it's something that we can get out in the market and leverage straight away. We keep the data for that proposition. And we get paid for the leads that we provide to Zillow. So it's -- I think it's a good result.

Australian housing market, by contrast, has been very strong and, I guess, rebounded is the right word. I think you said it was hot before. Would you like to comment a little bit about REA's recent performance and the drivers there and how you see it going forward?

Yes. I think our investors sort of know the history in the backlog for REA, but it's been just a fantastic asset for us. And I think off the back of a very, very strong market this year, we've seen them deliver their highest ever revenue in Q2, I think it was [ $290-odd ] million of revenue, up over 20% year-on-year from a growth perspective. And their share price hit an all-time high at like $24 billion, I think, roughly market cap now, which is astonishing to see how well that business is done. And yes, they are a great business in being able to utilize the most of what they have. So they push through yield increases each year. This year, it's been a double-digit yield increase. So that's really helped, given the penetration that they have with residential property over there. They have branched down into adjacencies in mortgages and data and valuation tools. And mortgages has not been performing as well, just given the market conditions down there, but we have a strong belief that's going to bounce back strongly. And they've also been investing in India where they have taken the majority ownership over there, and they've turned that property site into the #1 portal over in India from a digital perspective and an audience perspective in what, I guess, arguably is the most populous country in the world. So I think there's lots of things to be excited about with REA, and they tend to go from strength to strength. So we're really pleased with that investment.

Ad markets. Is it worth discussing for a minute the trends for Dow Jones and News Media in whatever way you want to take those, together or apart? And the U.S. elections obviously will play into that, although you also got U.K. elections at some point.

Yes. Look, I think the ad markets, and you've probably heard this from lots of other people, have been challenging. I think the thing that traps, we're starting to try and get the market to understand a little bit more is that advertising does not make up as much of our business is what people think it probably does and certainly, what it historically did. It makes up at [ 17% ] of our overall business. Within News Media, advertising makes up about 9% of our overall business. And within that, the subset print is even less. And so our performance last quarter for advertising, I think, was down 6%. When I think about it across all our different products, Dow Jones was down 4%, but Digital grew 1%, which we were relative -- I wouldn't say we never -- we're overly happy with 1% growth. But we're pretty happy off the back of some of the challenges that we've seen elsewhere, whereas the U.K. and Australia were down in their local markets in local currency, about 13% and 14%, respectively. So we're seeing -- to be honest, I mean, it's different speeds for different products. In Q2, print held up relatively well in the U.K. and the New York Post, albeit New York Post has a much more percentage of print advertising. Within Dow Jones and News Corp Australia, we saw print almost go back to sort of pre-COVID levels of decline, but pretty challenging. From a digital perspective, we saw the fun.com be particularly hit by the algorithm changes that we saw from some of the companies. They grew really, really strongly last year, and they would disproportionately hit in this current year, as was the New York Post. So, it's really patchy and it is -- we sort of say in our earnings, it's always hard to forecast. I'm sure people still -- or can be little bit better than that. But it's actually really hard to -- because it's pretty short term now. And when the algorithms do change, it can have an impact on the business overnight. But what is pleasing to see is that we have started to see the audience and the traffic pick up a bit on the [ comps ], on the back of, I guess, some tweaks to those algorithms. We're never quite sure exactly what they do, but we can see it in the numbers. So we'll have to watch it as we sort of play through the balance of the year, but it is a pretty tough environment. In relation to the political advertising, it is interesting. I mean I found it quite surprising when I came into this role. We don't really get any political advertising in the U.S. across our products. It's not something that I would have thought. It's something that we've actually set up a committee to try and rectify this year so they can actually start to have to think about how might we capture some of those dollars. So I think any success that they may have, I would think of as upside to our overall numbers.

And does that apply to the U.K. as well, albeit that the U.K. election seems to be ...

A lot -- we don't get a lot in the U.K. [ Some think ] we get more advertising or we have historically in Australia, but then they get to a certain time and then actually they can't advertise in the paper. So we don't tend to pick up a lot for the U.K. I mean what we do tend to see though is that because you do tend to get stronger audiences leading up to a political cycle, that can manifest itself in subs growth. And if you can get that, then it can lead into sort of upsizing programmatic advertising depending on what those exchanges look like and what the ad market looks like. But not direct at the time.

Okay. Streaming trends and Foxtel, you've launched Hubbl and Hubbl Glass TV, which, if I understand it correctly, it's a little bit like the Sky Glass TV. You're using those to sort of unify and manage people's streaming subscriptions, if I understand it correctly. How do you see the trends in the business?

I think it's first to -- I should say that at Foxtel, and again, we won't go over the history, I think it's done an amazing job actually to get that business back to stability. And I think it's important to understand that the Australian market is a little bit different to the U.S. market. And so whilst the streaming companies over here in the U.S. have obviously been having a pretty challenging time with lots of losses, we haven't seen that over in our business in Australia. They've been able to -- cost perspective, they've been able to leverage off the content that they have in their linear and broadcasting proposition in order to drive the subscription products of which we've had out there for a couple of years now. And actually, up until last quarter, we've seen, I think, 6 quarters of growth where streaming revenue upside offset the declines in broadcast. And so that has helped us stabilize that revenue line. So that's been really positive. We have seen though in the last quarter off the back of the writers strike, the entertainment product in Binge, probably not getting as many customers as what we had hoped to get. It's been a direct knock-on effect from that. And we also saw with Kayo, we had a weaker summer cycle down there or maybe the team couldn't perform as well as what we would liked from Australian perspective. And that, coupled with some inflationary pressures that we're seeing around the globe, has meant that the customers at Kayo, we probably had more pause customers, okay, we call them pause because we do tend to see customers come out over the summer months and come back into the sporting [indiscernible], which we're just about to start. And so how much of that is due to the weaker sports cycle, how much is due to inflation pressure, it's difficult to tell. But we'll have a pretty good view about that now that these winter sports cycles are about to start. So I think all of that team has done a great job in launching the streaming products and providing stability. I think when we think about Hubbl, I sort of think about it as the next iteration of product development within that business. We know we can't stand still with these products. And we also know from a consumer perspective, which we see over here in the U.S., I'm sure you in the U.K.; but there's a real pain point with all these different streaming products, and it's not user-friendly for a consumer to easily find the content that they want to digest. So with Hubbl, what we thought we would do is we would partner with Comcast. So they are a massive company who are investing a lot of money in this product, so we don't have to do it ourselves. We can leverage off the road map and the technology that they're building. We can get a proposition out into the marketplace, which hopefully will start to provide or ease some of those pain points that consumers feel. And so what will it do? It will provide a single build across all the services that they subscribe to, it helps for a more seamless search experience across all different products. It will enable us to be able to bundle our own streaming products they can on Binge with some of these other streamers that are down in the Australian marketplace. And we hope that off the back of all of that, that will help drive sales back into our core products. Now we've got the pack and we've got the TV. I mean we hope that we think that the [ pack ] will probably be the greatest beneficiary of that product. We're not anticipating that we will be selling a huge amount of TVs, we'll be focusing more on the [ pump ]. But I think it's literally just more to me. I mean, we've talked about it for a while, but I think it literally just launched over the weekend, so we'll see how that proposition goes, going forward. But based on the work that the team has done to date,on all the other areas of that business, so I think we're in good stead for that to land well.

We've got a couple of minutes left. So if anybody has a question, please store it, and I'll come to you after this next question for you, Susan. It gets asked a lot, so i must ask it. Any updates you can give on corporate structure simplification? I think it's fair to say there is a summer [ buff ] discount in your share price. How do you think about all of that? Or to the extent there's anything to say?

Yes, I can't really comment on that as you would expect me to say, apart from the words and the comments that Robert has already made publicly. And I think he does reiterate the point that we are seriously having a look at our corporate structures and our business as we always do. And I think -- and hopefully, our investors see that we've got a pretty good track record now of being really disciplined about that business. We will focus on anything that we think we maximize shareholder value for the long term, and we'll continue to focus on that. Outside of that, I just keep my head down and I keep pushing forward the business.

Well understood. Well understood. I don't know if we have a mic in there. Actually, if there was any pressing question, then please shout. Let's move on, if there's no mic in the room. Cost initiatives. It's been a feature of the recent discussions, where are you at? And how do you see that developing going forward as well?

We actually have a really good cadence when it comes to cost initiatives, which I think continually surprises our investors. We announced the 5% headcount reduction will exceed the cost we are -- I think we last publicly quoted $160 million. We'll exceed that from a cost perspective. We constantly have a look at ways that we can drive cost savings throughout the businesses. Of just in the U.K. recently, they're looking to combine their printing presses with DMG, subject to regulatory approval. We've recently just announced that we're going to come off linear for Talk TV. That should also provide some cost relief within that business. And actually, over in the U.K recently, they had the tabloids together having to think about what they can do across the globe together to ensure that $1 sort of cuts across the three businesses in a far more efficient manner. So we feel pretty good that we've got good cost discipline. And I think the benefit of having some of the more challenged businesses within our portfolio, you have to go really hard on costs. Our growth businesses can leverage off that as well because that's not areas that they would naturally tend to focus on, they tend to focus on revenue growth. And so we can kind of get the best of both worlds. So we feel pretty good about that.

I think we're within a few seconds of time. So thank you again for coming and joining us in [indiscernible].