Comcast Beats Earnings Estimates And Peacock Hits 42 Million Subscribers

The number of US-based subscribers of NBCUniversal’s premium ad-supported streaming service Peacock has leaped from 33 million in the fourth quarter of 2020 to 42 million in Q1 2021.

During the Q1 earnings call of parent company Comcast on Thursday, NBCU attributed the increase – coming a year after Peacock’s launch – to the popularity of "The Office," which hit the streaming platform in January, as well an exclusive agreement with the WWE Network to stream wrestling as of last month.

The company did not break down the number of subscribers that have signed up for Peacock’s free ad-supported tier or its premium streaming service, although Comcast CEO Brian Roberts said on the earnings call that monthly users are consuming nearly 20% more programming hours each month than traditional audiences on NBC.

“And we just crossed 1 billion total hours watched, nearly double our plan when we launched,” he said. “This strength in users and engagement has enabled us to create additional advertising inventory outside of our initial partnership, with CPMs at a material premium to linear prime time.”

Comcast has been making big investments to expand its Xfinity Flex TV streaming devices, which is currently free to broadband customers to connect to streaming services. Roberts said Xfinity with X1 and Flex have been key to driving more subscribers on Peacock.

“We’ve recently secured more original programming with creative partners like WWE and the NFL, providing a strong path to upsell into Peacock premium,” he said. “And as Peacock gained scale in the US, we see compelling ways we can expand internationally.”

NBCUniversal CEO Jeff Shell said that an ad-supported AVOD model that includes subscription and ad revenue was the right decision.

He added that subscriptions will continue to drive ad revenue in the future, as well as the number of monthly active accounts after users sign up. In terms of monthly active accounts, Peacock is about a third of where Hulu is today, Shell said, adding that the platform only launched nationally less than a year ago, compared to Hulu’s 13 year-run.

“We’re very pleased with how that’s grown steadily,” he said. “One of the upsides for us is converting those non-MAA sign-ups to MAAs, which we think we’ll do over time. An average Peacock MAA is using Peacock more than an average TV viewer is watching NBC. So, we’re very pleased with that.”

He added that Peacock CPMs are equal to or, in some cases, above what they’re getting on NBC primetime. And in Q4, sponsorship deals will roll out and NBCU will begin selling all of its inventory on a spot basis.

“But we’re in early stages of the upfront right now,” he said. “So, we’re already starting to talk to advertisers about making upfront commitments that include Peacock.”

Olympic expectations

Peacock’s debut was initially set to coincide with the 2020 Olympic Games when it launched last July. Shell and other execs said in January that they were optimistic about the 2021 Summer Olympic Games in Tokyo scheduled for this year.

“We have two Olympics in the next seven months,” he said on Thursday. “We’re going to do some pretty exciting things on Peacock with our Olympics programming. And then, even though we’re back in production … most of those have not hit Peacock yet. So, the strength of our original programming that we have planned to launch with is really coming in future quarters.”

How’d the reorg go?

Roberts said NBCU is beginning to see the benefits of its new operating structure, following Comcast’s reorganization last year of its cable networks and broadcast television businesses around streaming.

Q1 is the first quarter in which Peacock – which was previously reported in Comcast’s corporate results – is included in NBCU, which is now broken into three business segments: Media, which combines the company’s TV businesses and Peacock; Studios, which combines its film and television studio businesses; and Theme Parks.

Overall, Comcast’s revenue increased 2.2% to $27.2 billion in Q1. NBCU revenue decreased 9.1% to $7 billion in Q1, and adjusted profit decreased 11.8% to $1.5 billion. Media revenue increased 3.2% to $5 billion, while advertising revenue dropped 3.4% due to lower entertainment ratings. That was partially offset by higher pricing and sports volume, as well as advertising revenue from Peacock, which had not yet launched in the prior year period.

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