Comcast increases spending on Peacock streaming service

Small figurines with laptops and smartphones are seen in front of a Comcast logo displayed in this illustration taken December 5, 2021. REUTERS/Dado Ruvic/Illustration/File Photo GLOBAL BUSINESS WEEK AHEAD

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Jan 27 (Reuters) – Comcast Corp is increasing spending on its Peacock streaming service, executives said on Thursday, in a bid to catch up with big media rivals in the global battle for viewers.

Unlike the majority of its rivals, Peacock offers a free ad-supported version and two paid options: a $5 per month tier with “light ads” and an ad-free version at $10 per month.

In a call with investors Thursday, Comcast chief executive Brian Roberts said the “vast majority” of paid Peacock subscribers choose the $5 tier over the $10 tier. Going forward, the company will focus its strategy on ad-supported tiers.

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It doubles Peacock’s content spending to $3 billion in 2022 and plans to increase domestic content spending for Peacock to $5 billion over the next two years, an additional investment that will result in earnings before interest. , taxes, depreciation and amortization (EBITDA) loss of approximately $2.5 billion. He plans to fund this investment out of NBCUniversal’s cash flow.

In the fourth quarter, Comcast generated $778 million in revenue and lost $1.7 billion in Peacock-related adjusted EBITDA, more than double the $663 million in adjusted EBITDA lost in 2020.

The company previously pledged to spend $2 billion on Peacock content in the streaming service’s first two years.

Comcast reported that Peacock had 24.5 million active monthly accounts in the United States at the end of the year, up from more than 20 million at the end of July, including 9 million paying subscribers. Comcast defines this metric as the number of households that watched content on Peacock during the month.

Growth in Comcast’s NBCUniversal division helped the company’s fourth-quarter revenue beat Wall Street expectations.

Total revenue rose 9.5% to $30.34 billion in the quarter, beating analysts’ average estimate of $29.61 billion, according to IBES data from Refinitiv.

The company reported a 4.5% increase in cable revenue to $16.41 billion. It increased overall cable customer relationships, including broadband, video, voice and other services, by 3.3% to 34.2 million accounts.

However, it only gained 212,000 broadband customers in the last quarter, down 60.6% from the same period last year, when the company benefited from demand as the pandemic took hold. pushed people to work and play at home.

Comcast’s NBCUniversal media unit reported a 25.6% increase in revenue, driven by a takeover of the company’s theme park division. The division had the most profitable fourth quarter in NBCUniversal history as domestic tourists spent more while visiting.

Net income attributable to Comcast fell to $3.06 billion, or 66 cents per share, in the fourth quarter from $3.38 billion, or 73 cents per share, a year earlier. Comcast posted adjusted earnings per share of 77 cents, beating expectations of 73 cents.

The company increased its share buyback program authorization to $10 billion.

Shares of the company fell 5.4% to $45.81 on Thursday.

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Reporting by Helen Coster in New York and Eva Mathews in Bengaluru; Editing by Cynthia Osterman and Jonathan Oatis

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