NBCUniversal Inc. streaming service. A peacock is displayed on a laptop computer in this photo taken in the Brooklyn borough of New York, U.S., Monday, April 20, 2020.
Gabby Jones | Bloomberg | Getty Images
Peacock’s streaming service is slowly winning over consumers. Its losses on Comcast’s balance sheet, however, were swift.
Like its peers, Comcast is investing in its streaming platform by putting more of its content on Peacock. But it comes at a high price.
Peacock lowers Comcast’s NBCUniversal profit The company said Thursday that Peacock posted an adjusted loss of $978 million in the fourth quarter. Overall, Peacock’s losses for the year were in line with the company’s earlier warnings of about $2.5 billion.
The pain is not over yet. Company executives said Thursday that Peacock’s losses will peak in 2023 at about $3 billion, but expect them to improve steadily after that.
Investors’ tune has changed about adding customers regardless of cost.
Rising content costs and slowing subscriber numbers have led Wall Street to question the viability of the streaming business model in the past year. If Netflix reported that the increase in subscribers last week not only caused his stock to jump, but also that his competitors benefited from it.
On Thursday, NBCUniversal CEO Jeff Schell said the company “made it clear from the beginning that it was going to return” its investment in Peacock. He added, “I think we’re feeling better now,” as the streamer announced its subscriber growth.
Shell noted that Peacock’s goal was always to make a comeback. NBCUniversal echoed what other media executives have said in recent months about achieving profitability in streaming, particularly Warner Bros. DiscoveryDavid Zaslava, as the company cuts costs, including content.
Fellow Shell executives said Thursday they were optimistic about the streaming service. Peacock added 5 million paid subscribers in its best ever quarter, 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 option, which rivals had been leaning toward last year.
However, the number of consumers adding Peacock to their streaming lineup has only started to pick up in the past year. This is likely due to his deep athletic slate. Sunday Night Football games are simulcast on the platform, as are the 2022 World Cup matches and English Premier League games.
NBCUniversal’s films on the platform also helped. The latest installment in the Halloween horror franchise debuted on the Peacock and in theaters on the same day in October. Among other things, the studio’s 2022 hit “No” was also a boost, executives said.
The next day’s airing of programming on cable channel Bravo and broadcast network NBC was also positive, executives said Thursday.
However, these NBC next-day programs also cost money. For years, NBC content was streamed the next day on Disney’s Hulu platform. NBCUniversal let that deal lapse last year to beef up Peacock instead.
And on top of that, Peacock’s support of NBCUniversal’s content from its linear networks also only helps to speed up the bleeding of Comcast’s cable customers.
“We spend quite a bit of money creating content,” Comcast President Mike Cavanagh said Thursday. “So bringing some of that content as eyeballs move into a more streaming universe, we love what we’re doing and we’ve had a phenomenal year, reaching 20 million paid subscribers.”
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.