Comcast Corp. said the number of paid subscribers to its Peacock streaming service rose more than 40% in the first quarter, due in part to a packed February of top sporting events, including the Super Bowl and the Beijing Winter Olympics.
The performance of Peacock, which has been slow to gain momentum since its launch less than two years ago, comes as streaming industry leader Netflix Inc. said last week that it was launching for the first time in more than a decade lost subscribers. Netflix’s demise highlighted the challenges newer streaming entrants are likely to face as they expand their subscriber base while competing against a much larger field of competitors.
Comcast chief executive Brian Roberts said Thursday that as of March 31, Peacock had more than 13 million paying customers and 28 million monthly active accounts. In the fourth quarter, Comcast said more than nine million people paid to watch Peacock, which is also available free of charge to existing cable and broadband subscribers of Comcast and other providers such as Cox Communications Inc.
Mr. Roberts attributed the surge in subscribers to the Beijing Olympics and the Super Bowl, as well as new content to Peacock, including “Bel-Air,” which he described as the service’s most successful original series.
“Given the natural ups and downs of our content suite, we don’t expect to see that kind of growth every quarter,” Mr. Roberts said when speaking to investors.
Philadelphia-based Comcast, owner of Xfinity-brand broadband and cable services, media empire NBCUniversal and Britain’s Sky TV business, reported a 6.6% rise in net income to $3.55 billion, or 78th, on Thursday cents a share, compared to $3.33 billion, or 71 cents a share, a year earlier. Revenue rose 14% to $31 billion, boosted by strong growth at NBCU, while subscriber growth in broadband, the cornerstone of Comcast’s business, continued to slow.
Comcast shares closed 6.2% lower on Thursday.
On Wednesday, Comcast and cable provider Charter Communications Inc. announced a joint venture that will see Charter use Comcast’s platform. The partnership will result in a rebranded technology platform that will also be used on XClass TVs, Comcast’s foray into smart TVs. Charter will pay Comcast $900 million over the next few years as part of the partnership, while expanding the reach of Comcast’s technology into an additional cable footprint. A timeframe for the deal was not announced.
“Not only will we make these products available to millions more customers, but we will also open a doorway to brand new revenue opportunities,” said Mr. Roberts, adding Peacock will be embedded into the platform to continue growing its customer base quickly.
NBCUniversal has taken many steps to make Peacock more appealing, including removing its popular sitcom The Office from Netflix so that it lives off Peacock alone. The company also ended a deal with Walt Disney Co.’s Hulu that will move some high-profile programming back to Peacock.
“Bel-Air,” a reboot of the 1990s sitcom “Fresh Prince of Bel-Air,” was Peacock’s highest-grossing original to date, Comcast executives said.
Photo: NBC Universal
“Instead of going to Hulu and watching ‘The Voice’ the next day or ‘Real Housewives’ the next day, you can watch them exclusively on Peacock starting in September,” NBCUniversal CEO Jeff Shell said Thursday. Mr Shell said new episodes from his cable channel Bravo will be available on Peacock for the first time the next day.
NBCU also positioned Peacock as a destination for sports. The streaming service provides access to Premier League football matches, Sunday Night Football, the Olympics and programs from World Wrestling Entertainment Inc. such as WrestleMania.
Peacock comes in three tiers: a free, ad-supported version with limited content, an ad-supported tier for $4.99, and an ad-free tier for $9.99.
“We’ve said from the start, since we launched Peacock, that we take a different approach than most other people in the streaming business,” Mr Shell said. Rather than viewing Peacock as a separate company, NBCUniversal sees it as “an extension” of its TV unit, he said. “I think our strategy is working.”
Last week, Netflix said it would explore a lower-priced ad-supported offering after announcing it was losing customers in the first quarter.
Mr Shell added that NBCUniversal remains flexible about changing its business model as needed, citing Peacock’s shift to gaining more paying subscribers rather than focusing on its free tier. “Obviously as things change in the streaming market we will continue to evaluate and switch, but for now we’re really happy with both our business model and our performance.”
Chief Financial Officer Mike Cavanagh said Comcast expects about $2.5 billion in Peacock losses this year, with much of that coming in the second half as more content airs during that time.
The Olympic Games have been a revenue-generating endeavor for the IOC almost since its inception. WSJ’s Stu Woo sheds light on the history of brand partnerships and the challenges sponsors face at the Beijing Games. Photo: Fabrizio Bensch/Reuters
Comcast announced earlier Thursday that its broadband unit, the cornerstone of the business, added 262,000 new customers, down 43% from the same period last year. The slowdown in broadband growth follows a period of robust quarters in the early months of the pandemic, when many customers relied solely on their home networks.
The company’s mobile phone business added 318,000 new customers, a quarterly record, taking Xfinity Mobile’s total subscriptions to nearly 4.3 million. The cable TV business, still weighed down by cable cuts in favor of streaming services, lost 512,000 customers.
The company’s NBCUniversal unit, which is made up of its television, streaming, film and theme parks businesses, reported a 47% increase in revenue to $10.3 billion. NBCU benefited from the Super Bowl and Beijing Winter Olympics being available on platforms like NBC and Peacock. Those two events alone accounted for about $1.5 billion of the $6.87 billion in revenue generated by NBCU’s media segment, the company said.
NBCU’s studios division saw revenue increase 15% to $2.76 billion, while revenue for its theme parks unit more than doubled to $1.56 billion. Both companies were badly hit in the early days of the pandemic and are still recovering.
Revenue for the UK-based Sky TV business fell 4.5% to $4.76 billion, mainly due to currency fluctuations.
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