Earnings Call Transcript - NWSA Q1 2022

Operator, Operator

Good day and welcome to the News Corp First Quarter Fiscal 2022 Conference Call. Today's conference is being recorded. This call will be on a listen-only basis. At this time, I would like to turn the conference over to Mike Florin, Senior Vice President and Head of Investor Relations. You may begin, sir.

Mike Florin, SVP, Head of Investor Relations

Thank you very much, Bobby. Hello, everyone, and welcome to News Corp's fiscal first quarter 2022 earnings call. We issued our earnings press release about 30 minutes ago and is now posted on our website at newscorp.com. On the call today are Robert Thomson, Chief Executive, and Susan Panuccio, 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 will 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-K and Form 10-Q filings identify risks and uncertainties that could cause actual results to diverge and contain cautionary statements regarding forward-looking information. Additionally, this call will include certain non-GAAP financial measurements, such as total segment EBITDA, adjusted segment EBITDA, and adjusted EPS. The definitions and GAAP to Non-GAAP reconciliations of such measures can be found in our earnings release. With that, I will pass it over to Robert Thomson for some opening comments.

Robert Thomson, CEO

Thank you, Mike. We are journeying through the contours of our complex commercial landscape that has been a stalling test of the mettle of companies and countries. For us, the first quarter was the most profitable of its kind since the relaunch of News Corp in 2013, continuing the trends that were evidenced in the last financial year and building on those rapid rates of growth. And we continue to have much confidence in our immediate and long-term prospects. I would like to honor the work done by our employees around the world. They have cut through extraordinary exigencies and provided a prevalent service to their customers and to their communities. The Company's purpose has endured and indeed thrived through such challenging times, which is a tribute to the reputation and Lachlan Murdoch and the culture they created and have curated. Revenues for the quarter were $2.5 billion, an increase of 18%, while our profitability rose 53%. I should repeat that figure for clarity, profitability rose 53%. It is worth bearing in mind that this increase follows a 21% increase in profitability in the first quarter last year. Every one of our key operating segments posted significant revenue expansion and strong segment EBITDA growth. I would like to reiterate that our Board authorized a $1 billion stock repurchase program in September. As we previously indicated, we have refrained from executing on the buyback during this quiet period, but that period officially ends in the coming days. It is a very different buyback to that which was approved in 2013 when we were unsure about share dislocation at the time of the separation from Fox. We now have confidence in our performance, our resilience, our ability to generate cash for our investors, and our potential. Bolstering that confidence is the fact that our recent acquisitions are exceeding our expectations and our core segments are thriving. We now have an option across the businesses and significantly more flexibility in our ability to return capital to our investors. One note where they saw in that optionality is our ability to capitalize on the great success of the Foxtel streaming strategy, which was highlighted during the Foxtel strategy day. We have been working through the potential permutations and will continue to provide updates as appropriate. In the meantime, it is worth noting that the subscription video services segment EBITDA rose a rather healthy 46% in the first quarter. As for our campaign to hold big digital accountable, clearly there have been pronounced and profound developments in recent times. We are pleased with the agreements we have reached and the work it has progressed on revaluing content. However, we have always regarded the digital ad market as a separate issue. The release of an underacted complaint by the Texas Attorney General last month has highlighted the extent of the problem. The manipulative language was deeply concerning. We are obviously considering our position on this important matter and want to ensure that in the future, the ad market properly recognizes the value of our audience and of our inventory. Now, turning to the first quarter. Dow Jones recorded a 15% increase in revenues compared to the same quarter last year, with segment EBITDA surging 32%. That profitability was a record for the first quarter. Revenue at Risk & Compliance grew 26%, meaning that we have had 25 consecutive quarters of double-digit growth. Overall, the Professional Information Business experienced a solid 13% increase in revenues. And that should expand when we complete the acquisition of OPIS, which is expected to close early next calendar year. The past few weeks have highlighted the importance of intelligence about energy and carbon markets, and we fully expect to become a world leader in that area. I've been talking about Dow Jones, which expanded a first quarter record of 29%, with digital advertising climbing 38%. Meanwhile, subscription growth remains robust with a 19% increase across our consumer products to approximately 4.6 million, with circulation revenues rising approximately 13%. The ongoing transformation of Dow Jones continues to pace, with digital now accounting for 75% of the segment's revenues. Digital Real Estate Services was again a source of express growth with Move, the operator of realtor.com, seeing revenue surge 30%. The U.S. housing market is sturdy, with price rises moderating, more properties coming to the market, and longer listing times, all of which work in our favor. As for the house flipping flip-flop by Zillow, we have always been focused on the digital markets, not on bricks-and-mortar and certainly not on sorting out the septic tank or papering over wall cracks. We concentrated on our core competency and never took on excessive balance sheet risk or chased what appeared to us to be very low margin returns. It appears Zillow now finally understands what we always knew to be true. That said, as an open platform, we do see opportunities to be a marketplace for the industry, including iBuyers such as Opendoor, providing them with the same kind of dependable and trusted information that agents and consumers alike have valued. In Australia, REA had a remarkable first quarter with revenues burgeoning 62%. That is correct, 62%. Australia has slowly been emancipated from severe lockdowns, and access to homes for sale has been limited. So, we believe that positive market conditions will largely continue as the country returns to a semblance of normalcy. One harbinger is that site traffic in Q1 was 129 million average visits, up 13% year-over-year. That book business is thriving and even more so with the successful integration of HMH. Excluding the $50 million contribution of HMH, book sales have reset in the post-pandemic period to around 22% higher than the same period in 2019. There has been a resurgence of interest in printed books as their tactility and talismanic quality is increasingly important at a time when many people have screen fatigue. We sold notable successes in Q1 with the Bridgerton Series, The Authoritarian Moment by Ben Shapiro, and The Cellist by Daniel Silva. In the months ahead, we have high hopes for The Pioneer Woman Cooks Super-Easy by Ree Drummond, The Storyteller by Dave Grohl, and Gangster Granny Strikes Again by David Walliams. In subscription video services, the first quarter built on the significant progress made in FY '21 in reshaping the Foxtel group as a streaming-led business, with improved revenues, profitability, and cash generation. For the second consecutive quarter, growth in Kayo and Binge revenues clearly offset the not-unexpected modest decline in Retail Broadcast revenues. As of September 30, total subscribers were approximately 4 million, up 18% year-over-year. This includes a record 2.2 million total streaming subscribers, up 68% thanks to Kayo and Binge. While there will always be a certain seasonality in sports viewing in Australia, Kayo is quickly establishing itself as a year-round provider as it now offers 50 sports in total and is furnishing and gauging off-season programming for the football season ahead of the new season early next year. Foxtel's appeal was further broadened with the launch of the Flash Streaming News Service, featuring a diverse collection of 20 local and global news sources with content for all political persuasions. That breadth combined with a cutting-edge world-class user interface adds to the luster of Foxtel and is indicative of its potential. We're now obviously in a position to be even more ambitious. So, Foxtel and we are always seeking to maximize its undoubted potential. News Media was a strong contributor to News Corp's profitability this quarter with segment EBITDA of $34 million in the quarter after a loss in the same period last year. That is a tribute to Rebekah Brooks, Michael Miller, and Sean Giancola, and their talented, committed teams. Their transformation was in part due to the benefits of our deals with the major tech platforms, notably Google and Facebook. Together, these deals will contribute annual revenues in the nine figures to News Corp, clearly putting our news businesses on a more profitable path. Despite the successive lockdowns, our Australian business is faring well, showing significant improvement in profitability thanks to cost initiatives and rising digital advertising revenues, and news subscriptions, which improved to 850,000, up 24% year-over-year. News UK performed admirably, particularly in advertising, both digital and print and in subscriptions. The Times and Sunday Times contributed meaningfully to profits, and their digital paid subscriptions have now reached 380,000. The wireless and radio network increased its revenue and profit contribution with exclusive football broadcasts drawing large audiences and increased advertising. Wireless reported record rates of 6 million unique listeners per week according to the most recent survey. Our broadcast expertise is assisting our other media properties in the UK and will complement Talk TV, which is scheduled to launch in the early months of 2022 with Piers Morgan taking a global role across our broadcast and news properties. We believe Talk TV will be contemporary, low-cost, and high impact. In the U.S., the New York Post, once a legendary loss-maker, is now contributing to segment profitability and is an increasingly important voice in the national political divide. Its digital network reached 151 million unique users in September, almost half of the U.S. population, according to Google Analytics. Digital advertising revenue was 28% higher compared to the same quarter last year, and print advertising increased 62%, recovering from the COVID-related lows of last year. The company built on its momentum from last fiscal in the first quarter, and we remain optimistic about growth prospects going forward. Clearly, there are macroeconomic pressures affecting certain companies, but our increasingly digital orientation has bolstered our ability to weather the pandemic and deal with the economic uncertainty in some of our markets. We are confident in our employees, confident in our businesses, and very confident in our prospects. Now, for further details and invaluable insight, I cede the floor to Susan Panuccio.

Susan Panuccio, CFO

Thank you, Robert. As Robert mentioned, the strong operational momentum that contributed to last year's success has carried into our first fiscal quarter results. In the first quarter of fiscal 2022, total revenues exceeded $2.5 billion, reflecting an 18% increase driven by revenue growth across all key segments, particularly in Digital Real Estate Services. Total segment EBITDA reached $410 million, representing a 53% increase compared to the previous year, the highest quarterly growth rate since 2017, even with the challenges posed by lockdowns in Australia and a prior year comparison of 21% total segment EBITDA growth. When excluding acquisitions, currency fluctuations, and other disclosed items, adjusted revenues and adjusted total segment EBITDA increased by 10% and 47%, respectively. Reported EPS was $0.33 compared to $0.06 last year. Adjusted earnings per share were $0.23 for the quarter versus $0.08 in the prior year. Now, moving on to the individual reporting segments, let's start with Digital Real Estate Services. Segment revenues reached $426 million, marking a 47% increase year-over-year. On an adjusted basis, revenues grew by 29%. Segment EBITDA rose by 16% to $138 million, or 21% on an adjusted basis. Despite increased investment spending at Move and REA and tough year-over-year comparisons, cost reductions were implemented to offset the impacts of COVID. Move generated $180 million in revenues, reflecting a 30% year-over-year growth, with real estate revenues rising 39%, comprising 87% of total revenues. This growth was led by the traditional lead-generation business, benefiting from strong agent demand as well as improved sell-through and yields. We're also seeing early success with the Market VIP rollout, a hybrid product aimed at Move's top-performing agents. The referral model showed strong revenue growth, accounting for about 32% of revenues, driven by record-high values and an increase in transaction volume. Revenue growth was somewhat offset by the divestiture of Top Producer in March, which negatively impacted revenues by $5 million or 4%. With record-high prices and limited supply, lead volumes fell around 18% compared to over 40% growth last year, although leads remain approximately 15% higher than pre-pandemic levels. Encouragingly, new listings have risen from recent lows, and we have observed a moderation in lead volume declines in September and October. Pricing remains strong due to robust agent demand. REA had an outstanding quarter with revenues climbing 62% year-over-year to $246 million, including a $7 million positive impact from currency fluctuations. This success was bolstered by $43 million from the Mortgage Choice acquisition and $8 million from consolidating Elara, now being rebranded as REA India. The solid performance was driven by Australian residential revenue growth due to increased penetration, price hikes, and a favorable product mix. Revenue growth also included an 11% rise in new buy listings, despite lockdowns creating restrictions on physical inspections in Melbourne. Listings in Melbourne increased by 79%, while Sydney saw a 7% decrease. Financial services also benefited from the highest levels of settlements and submissions. For further details, please refer to REA's earnings release and their upcoming conference call. Shifting to the Subscription Video Services segment, revenues for the quarter were $510 million, a 3% increase compared to the previous year, benefiting from higher streaming revenues and a modest contribution from favorable currency fluctuations, partially offset by decreased broadcast and commercial subscription revenues. On an adjusted basis, revenues were flat. Total closing paid subscribers across Foxtel reached nearly 3.9 million at the end of the quarter, up 17% year-over-year, with total subscribers, including trialists, nearing 4 million. This increase was mainly due to ongoing growth in paid streaming subscribers, which faced some declines in broadcast subscribers and commercial subscriptions, worsened by lockdowns in Australia. Total paying streaming subscribers rose over 69% to nearly 2.1 million, and total streaming subscribers, including trialists, exceeded 2.2 million. Streaming products accounted for approximately 54% of Foxtel's total paid subscriber base. Broadcast churn improved, decreasing to 14% from 14.6% last year and 17.1% in the previous fourth quarter. Broadcast ARPU increased 4% from the prior year to $82 Australian, balancing subscriber volume declines consistent with Foxtel's strategy to focus on higher ARPU subscribers while reducing low-cost offers. Foxtel is observing an improved subscriber mix as the percentage of higher-value long-term subscribers rises, which coincides with lower churn rates. Net declines for residential broadcast subscribers moderated sequentially, with 1.6 million broadcast subscribers at quarter's end, and commercial subscribers fell over 30% from the fourth quarter to 162,000. We expect a recovery for commercial subscribers in the second half as restrictions ease. Continued product innovation includes the launch of iQ5 and an IP-enabled set-top box, announced plans to partner with Comcast and Sky for the launch of Sky Glass, and the introduction of a new streaming service dedicated to live news, featuring over 20 local and global news services. Segment EBITDA for the quarter was $114 million, up 46% compared to the prior year, primarily driven by $34 million in lower sports costs, benefiting from the $36 million negative impact experienced in the first quarter of fiscal 2021 related to deferred sports costs from the fourth quarter of fiscal 2020. Adjusted segment EBITDA grew by 42%. Focusing on Dow Jones, Dow Jones recorded revenues of $444 million, a 15% increase from the previous year, with digital revenues representing 75% of total revenues for the quarter, a 2 percentage point increase compared to last year. Adjusted revenues, which notably exclude the impact of IBD, increased by 9%. As Robert mentioned, both revenues and profitability achieved the highest first-quarter results since the acquisition. Circulation and subscription revenues rose by 12%, including a 13% circulation revenue growth, primarily due to the acquisition of IBD and continued strong volume gains in digital-only subscriptions. Dow Jones subscriptions for its consumer products increased to an average of approximately 4.6 million in the quarter, reflecting an 18% rise year-over-year. Of that, over 3.6 million were digital-only subscriptions, a 24% increase from last year. IBD contributed 100,000 digital-only subscriptions, leading to a total of 128,000 subscriptions. Professional information business revenues rose by 13%, accelerating from the previous quarter. Revenue growth from Risk & Compliance surged by 26%, driven by higher entry rates and robust growth across the Americas, Europe, and Asia. We also noticed modest improvements in other areas. Advertising revenues, which accounted for 20% of revenues for this quarter, grew by 29% to $90 million, marking the highest growth rate in the first quarter since the acquisition. Digital advertising trends remain strong, increasing by 38% following 14% growth in the first quarter of the previous year, and account for 61% of total advertising revenues. All categories exceeded expectations, particularly in technology and finance, and we continue to see improved yields. Print advertising revenues remained strong, rising 17% year-over-year, partially influenced by comparisons to COVID-19. Dow Jones segment EBITDA for the quarter rose 32% to $95 million with EBITDA margins improving by nearly three percentage points to 21%, despite an 11% growth in total costs, which includes IBD and higher employee expenses. On an adjusted basis, segment revenues and EBITDA for the quarter rose 9% and 24%, respectively. In book publishing, HarperCollins reported a 19% revenue growth to $546 million, and segment EBITDA increased by 20% to $85 million. Adjusted revenue and EBITDA rose by 7% and 10%, respectively, compared to last year. Despite a challenging comparison from the prior year, book consumption levels remain elevated, and overall consumption in the industry is still higher than pre-pandemic levels and significantly above the historical low single-digit growth rates. This quarter benefited from a recovery in Christian Publishing, which had been more affected by retail store closures in the previous year, as well as heightened sales in the UK. General Books also saw healthy growth, benefiting from new releases alongside increased sales from the backlist titles in the Bridgerton series by Julia Quinn. Digital sales rose by 5% this quarter, making up 21% of consumer sales. The Barclays accounted for 62% of revenues, a 2 percentage point increase from last year, highlighting the significance of this high-margin revenue stream and a key reason for the acquisition of HMH. The integration of HMH continues to progress well and is currently being incorporated into a full imprint structure within HarperCollins. We remain on track with our savings target of $20 million to be achieved within the first two years. Overall, HMH contributed $50 million in revenue and $6 million in segment EBITDA during this quarter. Turning to News Media, revenues for the quarter reached $576 million, a year-over-year increase of 18%, driven by ongoing recovery in the advertising market, significant growth in circulation and subscription revenues, along with a $25 million positive impact from foreign currency fluctuations. Within the segment, revenues for News UK and News Corp Australia rose by 18% and 14%, respectively. The Wireless Group and the New York Post also demonstrated strong growth. Adjusted revenues for the segment were up 13% compared to the prior year. Circulation and subscription revenues increased by 16%, which included a $30 million or 5% benefit from currency fluctuations, strong digital subscriber growth, additional revenue from platform agreements, and cover price hikes. Advertising revenues grew by $39 million or 21% compared to last year, stemming from favorable COVID-19 comparisons, particularly strong in digital across our operations. On a reported basis, advertising revenues in Australia climbed by 5% or 2% in local currency, despite negative impacts from lockdowns, while News UK advertising revenues surged by 36% or 28% in local currency. In the U.S., trends remained robust, with the New York Post recording a 32% growth in advertising revenue. Segment EBITDA of $34 million increased by $56 million compared to the previous year, reflecting higher revenues, cost savings at News UK and News Corp Australia, and a modest positive contribution from the New York Post. Adjusted segment EBITDA rose by $52 million to $30 million. I would now like to discuss some themes for the upcoming quarter. Despite our strong performance in the previous year, we are encouraged by overall trends. Like many companies, we are closely monitoring supply chain challenges, especially in book publishing and within our mastheads, as well as the effects of wage inflation on talent and retention. In Digital Real Estate Services, Australian residential listings through October rose by 16%, and we are optimistic about the easing of physical inspection restrictions, particularly in Melbourne. At Move, we are witnessing strong yield improvements despite short-term lead volume challenges due to ongoing supply issues. Similar to the first quarter, we plan to continue reinvesting in Move as we drive the core business and expand into adjacent markets. The year-over-year cost increases experienced in the first quarter were amplified by previous COVID-19 savings initiatives affecting headcount and marketing; we expect more moderate year-over-year cost increases for the remainder of the year. In subscription video services, we are pleased with the ongoing performance of Kayo and Binge, as well as efforts to improve broadcast ARPU and churn. We anticipate seasonality in Kayo due to the conclusion of key winter codes, but we are looking forward to our summer schedule featuring the Ashes and the Cricket World Cup in the second quarter. Costs are expected to rise in the second quarter, particularly for entertainment and sports rights, as well as increased marketing expenses to support the launch of Flash, the new streaming product. Overall, we maintain expectations for costs throughout the year to remain relatively stable in local currency. At Dow Jones, overall trends remain strong, with advertising and subscription growth continuing to perform well. In book publishing, trends are favorable, even as we compare to the previous year's COVID-19 benefits. We have a strong lineup of releases for the second quarter, including titles from Ree Drummond. For News Media, we expect the segment to show profit improvement, benefiting partially from recent content licensing revenues. We do anticipate higher costs in the UK as we expand further into video content and leverage our key brands and mastheads. CapEx was modestly higher in the first quarter, and we expect full-year CapEx to be around $100 million compared to last year. Finally, we remain focused on generating strong and positive free cash flow for the year, with first quarter free cash flow influenced by the timing of working capital payments. With that, let me now hand it over to the Operator for Q&A.

Operator, Operator

Thank you. If you're using a speakerphone, please ensure the mute function is off to allow your signal to reach us. Please limit your questions to one at a time. We will take a brief moment to let everyone signal for questions. Our first question comes from Entcho Raykovski with Credit Suisse.

Entcho Raykovski, Analyst

Hi Robert. Hi Susan. I've got one question, one just very quick follow-up. Basically, you comment on maximizing value at Foxtel. Obviously, this has been widely reported in the press, but is there an option you considering? And what's the potential timing on whatever considerations you have? And then secondly, just, I know Robert you mentioned the winding down. Do you expect to see any impact on Move? I mean, could that perhaps get closer to some agent or perhaps an independent franchise model? Any comments would be helpful.

Robert Thomson, CEO

It's not the right time to discuss the specifics of the review regarding Foxtel. However, both we and our partners at Telstra acknowledge that the outlook for Foxtel has fundamentally changed, and we now have a successful streaming story. We've developed cutting-edge technology and significantly improved our user interface. Our team, led by Patrick, is focused on driving further success. The narrative has changed over the past two years, especially since skeptics questioned whether we would need to invest more in the company. We took a majority stake because we needed more clarity, responsibility, and decisiveness. Our media platforms are being utilized to enhance and promote the quality of Foxtel. We made difficult yet smart decisions regarding our streaming and systems, and here we are today. We will not be naive moving forward; naivety is not an option at this stage. Regarding Zillow, while we considered entering the brick-and-mortar space, we were clear about our digital priorities. We successfully revitalized realtor.com, which we acquired for around $700 million, and it's currently valued at approximately $6 billion. As digital trends continue, it could reach $20 billion in five years. We are dedicated to serving vendors, buyers, and realtors diligently. Concerning Zillow, the belief that finding a reliable plumber or contractor was simple, or that holding inventory wouldn’t incur costs, seems odd to me. I can't predict the eventual impact when Zillow decides on its business direction, but I remain confident in REALTOR's future and in the U.S. real estate market. We are in a marketing transition, and the basic principles of supply and demand still hold. High prices will lead to buyer hesitation and more sellers entering the market; this is an unchanging reality. We appear to be in such a transitional moment, which bodes well for REALTOR. Interest rates will play a role, but for the foreseeable future, we are still dealing with historic lows or near-historic lows. More importantly for us, we are witnessing a lasting trend. The myth that millennials wouldn't want to own homes has been proven false. The idea that we would prefer shared living spaces or that car-sharing diminishes the value of owning a home has been debunked. The notion of "COVID coziness" has not held up; working from home implies the need for a home. An insightful article this week in Barons touched on this topic. As such, the narrative around the supposed sharing economy has been significantly challenged. We see price increases moderating, interest rates remaining relatively low in the U.S., and the eviction moratorium largely ending, with the market gradually improving. Our audience traffic has surged by 30% to 40% compared to pre-COVID levels, and leads are 15% to 20% above pre-pandemic levels, indicating strong demand. We are genuinely excited about REALTOR's present and future prospects.

Mike Florin, SVP, Head of Investor Relations

Thank you. And Joe, Bobby, we'll take our next question, please.

Operator, Operator

Thank you. Our next question comes from Alexia Quadrani with JP Morgan.

Alexia Quadrani, Analyst

Thank you. In the news media business, I was wondering if you could sort of give us an idea of what you think the overall opportunity is even longer-term from licensing fees from tech platforms over time. And then just a quick follow-up on Foxtel; with some of the streaming platforms, the S5 players launching their own platforms in Australia. Do you see that as incremental competition, or how should we view that?

Robert Thomson, CEO

First of all, on News Media, what you're seeing is really a transformation led by our teams, as Susan mentioned. Whether it be ad revenue, which shouldn't in the UK was up 36%, Australia 5%, New York Post 32%. Overall ad revenues increased 16%, in the UK 13%, Australia 9%. You're seeing a lot of hard work done by our teams being very diligent about costs, but also being focused on growth. Certainly, the big digital deals will make a difference to all of our publications. And frankly, all we can say given the constraints of confidentiality is that the deals mean that comfortably over nine figures are flowing into the news companies in return for the highest quality news services in three separate continents. Though unfortunately, we are yet to reach agreement with Facebook in the UK. We are watching closely the evolution of possible legislation there that channels the Australian legislation. This applies to both companies with respect to the ad tech conundrum. We have always kept the ad tech issue to one side as I strongly believed that there were two components in need of resolution: the value of content and digital ad dysfunction. I was fairly confident there would be document discovery, and the Texas Attorney General's complaint has revealed some of the rather disturbing details. I have little doubt that the Department of Justice will add to that detail in coming days. Now, how we resolve these issues does indeed remain to be seen.

Susan Panuccio, CFO

And Alexia, on your second question you asked about the competition within Australia. I think the Foxtel team did a great job of talking about this at the strategy day. Around basically the great content they have within sports, particularly the AFL and our own cricket contracts that they have. They had long-term relationships with the studios and have developed a very good working relationship with them. There is great aggregation of the services down there. So, while there is clearly competition that is coming into that marketplace, they are operating very well within that current environment.

Alexia Quadrani, Analyst

Thank you.

Mike Florin, SVP, Head of Investor Relations

Thank you, Alexia. Bobby, we'll take our next question, please.

Operator, Operator

Our next question comes from Craig Huber with Huber Research Partners.

Craig Huber, Analyst

Yes, hi. My first question is regarding the ongoing strategic review of Foxtel. I'm curious if there are any other reviews happening within the company, as many investors believe the company is too complex. Additionally, could you provide the year-over-year changes in EBITDA for realtor.com for the quarter? Thank you.

Robert Thomson, CEO

Craig, as a simplification, kindly we are constantly reviewing our structure. As you know, we've sold quite a few companies along the way. The local newspaper business at Dow Jones, which we presumed would struggle, turned out to be a success. Amplify found a bit of a home. News America Marketing was less meaningful to us as print sales declined somewhat. Unruly, which has found a welcome home elsewhere, and within we still have a relationship. But Ad-tech, let's say, is for others. So, we will constantly be institutionally introspective, reviewing our structure with Foxtel or Digital Real Estate, or as we have done to designate Dow Jones as a separate segment so that you can see not only the potential there but also to be clear about the very positive progress that the team is making in news media. We've made many changes. Those changes have been productive and profitable, and we will never stop questioning or challenging ourselves.

Susan Panuccio, CFO

And Craig, just on your question in relation to REALTOR, as you know, we don't give the EBITDA number, but the year-on-year difference was up $6 million negative in relation to REALTOR. And one of the main reasons for that is the continuing investment in growth in that business within marketing and headcount.

Craig Huber, Analyst

Thank you.

Mike Florin, SVP, Head of Investor Relations

Thank you, Greg. Bobby, we’ll take our next question, please.

Operator, Operator

And our next question comes from Brian Han with Morningstar.

Brian Han, Analyst

Hi. Two very quick questions if I may. On capital management, are there any technical or legal impediments to increasing your annual dividend amount, or do you feel that buyback just gives you more flexibility down the track? And secondly, can you please comment on how much EBITDA was booked in the first quarter from the licensing deals with the big digital platforms?

Robert Thomson, CEO

Clearly, we've focused on the buyback and we're now in a position to begin the buyback, as we've had to wait until the earnings announcement, given the regulatory restrictions in the quiet period. That quiet period is almost over, and you will soon hear the sound of buyback. The pacing depends on being rational about the trends in the market, but this is a very different buyback to that initiated at the time of the split. As you know well, at that moment, we were worried about unexpected share dislocation. And what is the provision to intervene if and when necessary, during that unprecedented unpredictable period? Now, we're on an entirely different epoch. The company has a clear momentum. We are confident about our cash generation potential, our ability to both invest to grow, and to return capital. So, as I mentioned, now that the quiet period is almost over, you will soon hear the sound of buyback.

Susan Panuccio, CFO

And Brian, just in relation to your question on the content licensing, we haven't given out that number apart from saying it was going to be into nine figures. Just in relation to how that's going to be pacing over the course of the year, we would expect it to grow as more products within those particular contracts launched like for instance, showcase over here in the U.S. So, we would expect to see that build as we go throughout the year. We talked previously in relation to a high-level allocation of switching between the News Media segment and Dow Jones.

Mike Florin, SVP, Head of Investor Relations

Thank you, Brian. Bobby, we’ll take our next question, please.

Operator, Operator

No further questions at this time. I will turn the call back over to you for any closing remarks.

Robert Thomson, CEO

Great. Well, thank you, Bobby. And thank you for all participating. We look forward to talking to you soon. Have a great day. Take care.