Hollywood Reporter: Peacock Quarterly Loss Narrows to $639M as Streamer Hits 34M Subscribers

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Peacock, the streaming service of Comcast’s entertainment unit NBCUniversal, grew its first-quarter revenue and narrowed its loss to $639 million from $704 million in the year-ago period, and $825 million in the fourth quarter of 2023, despite higher programming costs. The streamer ended March with 34 million paying subscribers, compared with a year-end 2023 figure of 31 million, the company also said on Thursday.

“Peacock paid subscribers increased 55 percent compared to the prior-year period to 34 million, including net additions of 3 million in the first quarter,” Comcast highlighted. “Peacock revenue increased 54 percent to $1.1 billion.”

Christopher Nolan’s Oscar-winning epic Oppenheimer exclusively started streaming on Peacock on Feb. 16 after its theatrical release in July 2023.

As streaming profits, which have so far been elusive for most industry giants, remain in focus for Wall Street, Peacock previously posted a full-year 2023 loss of $2.75 billion. But Comcast CFO Jason Armstrong earlier this year emphasized that “2023 marked the peak in annual losses at Peacock, and for 2024 we expect to show meaningful improvements in losses, versus 2023.”

In its quarterly earnings report on Thursday, the media, entertainment, and technology giant, led by chairman and CEO Brian Roberts, also disclosed lower bottom-line figures for key NBCU units as adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) fell. Peacock’s losses are disclosed as part of NBCU’s media unit.

First-quarter revenue for the company’s media unit increased 3.6 percent to $6.4 billion, “primarily due to higher domestic distribution revenue,” boosted by the Peacock subscriber gain. “International networks revenue increased primarily reflecting the positive impact of foreign currency,” Comcast also noted. “Domestic advertising revenue was consistent primarily due to lower revenue at our networks, offset by an increase in revenue at Peacock.”

Adjusted EBITDA for the media division fell 6.1 percent to $827 million “due to higher operating expenses, which more than offset higher revenue.” But Peacock’s revenue topped the $1 billion mark for the second quarter in a row, reaching $1.1 billion. The company also reiterated a key recent data point, saying that it has booked $1.2 billion in ad commitments for the Summer Olympics in Paris.

First-quarter revenue for Comcast’s studios segment decreased 7.2 percent to $2.7 billion “due to lower content licensing revenue, primarily reflecting the timing of when content was made available by our film studios.” Theatrical revenue increased though “due to the successful performance of recent releases, including Kung Fu Panda 4 and Migration, compared to theatrical releases in the prior-year period, including Puss in Boots: The Last Wish and M3GAN.”

Adjusted EBITDA for the studios segment fell 12.2 percent to $244 million “due to lower revenue, which more than offset lower operating expenses.” The latter primarily reflected lower programming and production expenses, “mainly due to lower costs associated with the timing of when content was made available by our film studios,” the company explained.

First-quarter revenue for the conglomerate’s theme parks unit rose 1.5 percent to nearly $2.0 billion on “higher revenue at our domestic theme parks.” International theme parks revenue was flat “due to higher underlying revenue, offset by the negative impact of foreign currency.”

Adjusted EBITDA for the theme parks division dropped 3.9 percent to $632 million though, “reflecting higher operating expenses and the negative impact of foreign currency, which more than offset higher revenue.” The higher expenses were due to higher marketing and promotions costs.

Comcast’s core cable and telecom business again lost pay-TV and broadband subscribers in the first quarter, the latter being a data point that Wall Street analysts will analyze particularly closely. The company lost 487,000 U.S. video customers in the latest period, after a year-ago drop of 614,000, ending March with more than 13.6 million total users. Comcast also lost 65,000 U.S. broadband subscribers, compared with a year-ago gain of 5,000, to end the first quarter with nearly 32.2 million total users.

“In studios, following a record year with eight Oscars including best picture, our film group continues to leverage our incredible IP with hits like Kung Fu Panda 4,” Roberts said on Thursday. “And Peacock remains one of the fastest-growing domestic streamers with impressive acquisition, retention and engagement trends.”

“Our team is continuing to execute exceptionally well in a dynamic and competitive marketplace,” he touted. “Overall, I am proud of our ability to consistently perform at the highest levels and continue to position the company for long-term growth.”

Comcast president Michael Cavanagh led the comments on Thursday’s earnings conference call, taking over the role traditionally played by Roberts. Cavanagh highlighted that the broadband market remains “extremely competitive,” especially when it comes to cost-conscious consumers, but touted growing average revenue per user and encouraging usage trends. He also reiterated the promise that Comcast would return to broadband subscriber growth “over time,” reaffirming management’s confidence.

Comcast has six growth businesses that it sees worth investing in: Peacock, studios, theme parks, residential broadband, mobile, and business services.

“We have a clear vision” for how to compete now and in the future,” Cavanagh told the earnings call. And he touted the company’s enviable financial position, compared with peers, allowing Comcast to “invest organically and aggressively” in its six growth businesses. He highlighted that they account for more than 55 percent of Comcast’s total revenue today, which will only grow over time.

Given Comcast’s long history of big acquisitions, including the likes of NBCUniversal, cable giant AT&T Broadband and European pay-TV firm Sky, Wall Street observers have often kept eyes and ears open for possible signs of any involvement of the company in major M&A. Some investors and analysts have in the past expressed concern that Comcast could end up shelling out big bucks for assets on the block, and spend time and energy on integrating them.

Cavanagh touched on that topic during the earnings call on Thursday, signaling a focus on reinvesting capital into growth businesses.

“The power of our studios continued this quarter,” Cavanagh also mentioned on the call, touting “an exciting slate still ahead,” including The Fall Guy in May, Despicable Me 4 and Twisters in July, and Wicked in November. “For the third year in a row, we will release more movies than any other major studio.”

Cavanagh praised the company’s film team for helping its studio rank as “the number 1 global studio by worldwide box office and winner of eight Academy Awards, including best picture for Christopher Nolan’s Oppenheimer.”

“Peacock has been on a great trajectory,” Cavanagh also argued. Signaling potential price increases by the streamer down the line, just like peers have done, he said: “Our content offering provides such a great value proposition that we should have some real pricing power over time.”

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