Comcast Chairman and CEO Brian Roberts
Courtesy of Jonathan Pushnik/Comcast
Peacock, the streaming service from Comcast's entertainment division NBCUniversal, grew its revenue 57 percent in the fourth quarter and surpassed $1 billion in a quarter for the first time, while narrowing its loss. The streamer ended 2023 with 31 million paid subscribers, the media, entertainment and technology giant announced Thursday.
Comcast President Mike Cavanagh said at an investor conference in early December that Peacock had reached 30 million subscribers. It had 28 million subscribers at the end of September, after adding 4 million in the third quarter. This meant an increase of around 3 million in the final quarter of 2023.
Comcast CFO Jason Armstrong told analysts on a morning call that the three million new Peacock subscribers in the last fiscal quarter came in part from viewers drawn to NFL and Big Ten football games, without providing specific numbers to name. NBCU's loss related to Peacock was $825 million in the fourth quarter, compared with a loss of $978 million a year ago on revenue of $660 million.
Cavanagh spoke during the call about Peacock streaming an NFL wild-card playoff game Saturday night that averaged 23 million viewers on the flagship online platform, local NBC affiliates in the teams' home markets and the NFL+ mobile app .
“Our investments in the network and technology platforms we have built over decades have allowed us to shine and deliver a seamless experience across the web and on Peacock. “This shows that our company is uniquely positioned to win in this high-bandwidth era,” he told analysts.
To further bolster Peacock, Cavanagh reiterated that Christopher Nolan's Oscar-nominated Oppenheimer biopic will stream exclusively on Peacock starting February 16, long after its theatrical release in July 2023. And he announced that the 2024 Olympics will be live on Peacock would be broadcast, with many of the events also being broadcast live on NBC and other NBCUniversal TV platforms.
Cavanagh called Peacock “the fastest-growing streamer in the U.S.” as he moved beyond ongoing operating losses to use the streamer as part of a comprehensive and growing TV offering for consumers across a range of NBCUniversal platforms, operating as a holistic ecosystem be treated. CFO Armstrong told analysts: “2023 marked the peak of annual losses at Peacock and for 2024 we expect significant improvements in losses compared to 2023.”
The entertainment group had previously promised Peacock would reach a “peak loss” of around $2.8 billion in 2023, up from $3 billion previously. On Thursday, it said its 2023 loss was $2.75 billion. Peacock's revenue continued to grow over the most recent period and throughout 2023.
Cavanagh told analysts he was more focused on how Peacock performed within NBCUniversal TV's overall strategy than on himself. “I'm less focused on what individual Peacock losses do and more focused on doing what “I think we've set a very good path for ourselves,” he said.
As legacy media cedes streaming subscriber power to Netflix, streaming profits are the focus of Wall Street. For comparison, Warner Bros. Discovery reported a profit of $111 million last quarter for its direct-to-consumer division, which includes Max/Discovery+, while Paramount Global posted a streaming loss of $424 million reported and Disney lost $387 million on the Disney+/ESPN+/Hulu combined deal.
The latest Peacock updates were part of Comcast's fourth-quarter and full-year earnings reports.
The company also reported its highest-ever fourth-quarter and full-year adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for its theme parks division. Profit rose 11.6 percent to $872 million in the fourth quarter and 24.7 percent to $3.3 billion for the full year.
Comcast lost 389,000 pay-TV subscribers in the fourth quarter, compared with a loss of 440,000 in the year-ago period. Additionally, the company lost 34,000 broadband customers in the most recent period after losing 23,000 in the fourth quarter of 2022, a data point that Wall Street analysts will be closely analyzing.
At Comcast's NBCUniversal, content and experiences results improved in the fourth quarter, driven by theme parks, media and studios. Content & Experiences revenue increased by 2.3 percent or 5.9 percent excluding severance payments.
Studios revenue rose 4.3 percent to $3.06 billion in the fourth quarter thanks to higher box office receipts, including showings of Five Nights at Freddy's, Trolls Band Together, The Exorcist: Believer and Migration. Content licensing revenues were little changed “as higher content licensing revenues at our film studios were offset by lower content licensing revenues at our television studios, primarily due to the timing of content being made available under licensing agreements, including the.” Impact of the Writers Guild.” and Screen Actors Guild work stoppages in the current year.”
The Studios segment's quarterly profit rose 83 percent to $308 million as higher revenues accompanied nearly flat operating costs. “Consistent operating expenses primarily reflected consistent programming and production costs, reflecting lower costs related to lower content licensing sales at our television studios, including the impact of work stoppages in the current fiscal year, offset by higher film costs,” explained Comcast.
Media unit revenue rose 3.1 percent to $6.98 billion, “due to higher domestic distribution, international networks and other revenues, partially offset by lower domestic advertising revenues,” Comcast said. “Domestic distribution revenue increased primarily due to higher revenue at Peacock, driven by an increase in paying subscribers. International channel revenues increased primarily due to an increase in revenues related to the distribution of sports channels and the positive impact of foreign currencies.”
Domestic advertising revenue fell due to an unfavorable comparison with Telemundo's broadcast of the FIFA World Cup in the same period last year. Excluding the World Cup contribution, advertising revenue increased 2.7 percent, “primarily due to an increase in revenue at Peacock, partially offset by lower revenue at our networks.”
However, the media unit's adjusted EBITDA fell 50.2 percent to $108 million in the fourth quarter, reflecting higher operating costs driven by increased sports and Peacock programming costs, “partially offset by a decline in content costs.” at our entertainment television networks, including the impact of the Writers Guild and Screen Actors Guild work stoppages during the current year. The increase in sports costs reflected increases in programming fees for the NFL and the English Premier League, as well as the addition of Big 10 content . The same period last year also included lower costs for leagues that paused due to the World Cup.
Quarterly theme park revenue increased 12.2 percent, driven by higher sales at both international and domestic parks.
Theme park revenue rose 11.6 percent in the fourth quarter as the increase in revenue more than offset higher operating costs, which were due to “higher costs primarily associated with increased attendance.”
The company's “Corporate and Other” segment swung from a profit of $28 million to a loss of $5 million in the fourth quarter of 2023, with Comcast reporting “an increase in operating expenses related to Sky operations in Germany “In the same period last year, games were suspended for four weeks to reflect the timing of the FIFA World Cup and content fees related to a change in our entertainment content development strategy.” This Segment includes, among other things, personnel costs, the Sky brand services and networks in Germany, the Philadelphia Flyers ice hockey team, the Wells Fargo Center arena in Philadelphia and Xumo, the streaming platform joint venture with Charter Communications.
Comcast, led by Chairman and CEO Brian Roberts and Cavanagh, has been frequently mentioned by bankers and Wall Street analysts as a possible player in future industry mergers and acquisitions. However, management has signaled that it would not be easily drawn into the deal. Cavanagh reiterated late last year that “the bar is set very high” for the company to do deals. “Our job is always to look at things, but all I can say is that the bar is really high because I really like the organic hand we have,” he explained. “We don’t need to do anything inorganic in terms of acquisition.”
Roberts praised the company's performance on Thursday. “We closed 2023 and the fourth quarter with excellent operational and financial performance,” he said. “(We) were the No. 1 studio at the global box office for the first time since 2015; and maintained Peacock's position as the fastest-growing streamer in the US
“For the third consecutive year, we achieved the highest revenue, adjusted EBITDA and adjusted earnings per share in our company’s history,” emphasized Roberts. “At the same time, we invested in future growth, returned $16 billion to shareholders and maintained a healthy balance sheet.”
Looking ahead, the CEO said, “2024 is already off to a great start – I couldn’t be prouder of how our company has come together to deliver a record-breaking NFL Wild Card game on Peacock and the biggest night in the country to deliver Internet.” always. Our unique and complementary capabilities will enable us to capitalize on the many opportunities that lie ahead.”
Comcast's board increased the company's dividend for the 16th consecutive year.