Peacock, a streaming service, has been gaining popularity with users gradually. However, Comcast’s losses from it have come in quickly.
Like its rivals, Comcast has been putting more of its material on Peacock as part of an investment in its streaming service. But it’s coming at a heavy cost.
Peacock weighed down earnings for Comcast’s NBCUniversal, with the company reporting Thursday that Peacock recorded an adjusted loss of $978 million during the fourth quarter. For the overall year, Peacock’s losses were in line with what the company had earlier warned about $2.5 billion.
The pain isn’t over yet. Peacock losses will reach their pinnacle in 2023 at almost $3 billion, according to company management, who expect things to then gradually get better.
Investors’ tune have changed about adding customers no matter the cost.
In the past year, Wall Street has begun to doubt the sustainability of the streaming business model due to rising content costs and sluggish subscriber growth. When Netflix announced subscriber growth last week, not only did its stock increase, but so did that of its rivals.
On Thursday, NBCUniversal CEO Jeff Shell said the company had “made clear from the start we’re going to make a return” on its investment in Peacock. He added, “I think we feel better about that now,” as the streamer announced subscriber growth.
Shell noted the goal for Peacock all along was to make a return. NBCUniversal echoed what other media leaders have said in recent months about reaching profitability in streaming, especially Warner Bros. Discovery’s David Zaslav as the company cuts back on costs, including on content.
Shell’s fellow executives said Thursday (January 26, 2023) they were optimistic about the streaming service. In its greatest quarter to yet, Peacock added 5 million paying subscribers, bringing the platform’s user base to over 20 million.
NBCUniversal was one of the last to enter the streaming landscape with Peacock. They debuted Peacock with a less expensive, ad-supported alternative, something rivals have leaned on over the past year as they gradually made their way into streaming.
Even so, over the past 12 months, more people have started to add Peacock to their streaming library. That’s likely been due to its deep sports slate. Sunday Night Football games air simultaneously on the platform, as did 2022 World Cup matches and English Premier League games.
NBCUniversal movies on the platform have helped, too. The last installment of horror franchise “Halloween” debuted on Peacock and in theaters on the same day in October. The studio’s 2022 hit, “Nope,” was also a boost, among others, executives said.
The next day airing of programs from cable channel Bravo and broadcast network NBC has been a positive too, executives said Thursday.
Those next-day NBC programs also come at a cost, though. For years, NBC content would air next-day on Disney’s Hulu platform. NBCUniversal let that deal expire last year to strengthen Peacock instead.
And besides that, propping up Peacock with NBCUniversal content from its linear networks also only helps to accelerate its bleeding of Comcast’s cable-TV customers.
“We spend quite a bit of money creating content,” Comcast President Mike Cavanagh said Thursday. “So migrating some of that content as eyeballs move to a more streaming universe, we like what we’re doing and we had a phenomenal year getting paid subscribers to 20 million.”
