NBCUniversal Inc. The Peacock streaming service is displayed on a laptop computer in an arranged photo taken in the Brooklyn borough of New York, US, Monday, April 20, 2020.
Gabby Jones | Bloomberg | Getty Images
Streaming service Peacock is slowly taking off with consumers. However, its losses on Comcast’s balance sheet have been swift.
Like its peers, Comcast is investing in its streaming platform by putting more of its content on Peacock. But it is coming at a heavy cost.
Peacock suppressed earnings As for Comcast’s NBCUniversal, the company reported Thursday that Peacock reported an adjusted loss of $978 million during the fourth quarter. For the full year, Peacock’s loss was in line with what the company had warned about in the past – about $2.5 billion.
The pain is not over yet. Company executives said Thursday Peacock losses will peak in 2023 at about $3 billion, but expect a steady recovery thereafter.
Investors have changed their tune about adding customers regardless of the cost.
Rising content costs and slowing subscriber growth caused Wall Street to question the viability of the streaming business model last year. When netflix Last week’s reported subscriber growth not only buoyed its stock, but Its competitors got an advantageas well.
On Thursday, NBCUniversal CEO Jeff Shell said the company “made it clear from the beginning that we’re going to bounce back” on its investment in Peacock. “I think we feel better about it now,” he said, as the streamer announced the increase in subscribers.
Schell noted that Peacock’s goal was to make a comeback. NBCUniversal echoes what other media leaders have said in recent months about reaching profitability in streaming warner bros discoveryThe company cuts costs, including materials, as David Zaslav points out.
Fellow executives at Shell said Thursday they are optimistic about the streaming service. Peacock added 5 million paying subscribers — its best quarter ever — and the platform now has more than 20 million customers.
NBCUniversal was one of the last to enter the streaming landscape with Peacock. As they slowly made their way into streaming, they launched Peacock with a cheaper, ad-supported alternative some competitors have flocked to over the past year.
Still, consumers adding Peacock to their streaming lineup have only started in the past year. That’s likely because of its deep sports slate. Sunday Night Football games are broadcast simultaneously on the platform, as were 2022 World Cup matches and English Premier League games.
NBCUniversal films on the platform have also helped. The last installment of the horror franchise “Halloween” debuted in peacetime and in theaters on the same day in October. The studio’s 2022 hit, “No,” was also a boost, among others, executives said.
Officials said Thursday that broadcasts of programs on cable channel Bravo and broadcast network NBC the next day also tested positive.
However, the following day’s NBC programs also come at a cost. For years, NBC content would air the next day on Disney’s Hulu platform. NBCUniversal let that deal expire last year in order to consolidate Peacock.
And besides, propagating Peacock with NBCUniversal content from its linear network also only helped hasten the bleeding of Comcast’s cable-TV subscribers.
“We spend a lot 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 love what we’re doing and we had a phenomenal year getting up to 20 million paying subscribers.”
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.