Six months after its nationwide launch, Comcast NBCUniveral’s premium ad supported streaming service Peacock has 33 million subscribers in the United States – up from 22 million in Q3 2020 – exceeding the company’s targets following a reorganization of its TV and streaming businesses last year during the COVID-19 pandemic.
During Comcast’s Q4 earnings on Thursday, CEO Brian Roberts said the streaming platform is only expected to grow with the addition of “The Office” earlier this month and “Modern Family” in February, as well as exclusive agreement with the WWE Network announced earlier this week to stream wrestling in March.
Not only is “The Office” driving incremental users to the streaming service, Roberts said those viewers are finding and watching other programs like “Parks and Recreation” and “Yellowstone,” as well as movies from Universal and other studios, and sports programming. There’s also strong interest among advertisers.
NBCUniversal CEO Jeff Shell added that more viewers streamed “The Office” on Peacock compared to use among Netflix customers, though he did not provide any numbers.
“Peacock has had an exceptional start, exceeding all of our internal targets,” Roberts said.
Shell and other execs said that they – along with advertisers – are optimistic the 2021 Summer Olympic Games in Tokyo will take place this year. Peacock was initially set to coincide with the 2020 Olympic Games when it launched in July.
Although Comcast beat earnings estimates, the pandemic had a big impact on the company, particularly its theatrical and theme parks businesses.
The company said it has reorganized its cable networks and broadcast television businesses around streaming, which are now combined, along with Peacock. It also renewed a number of carriage agreements with distribution partners, which Roberts said put the company in a position of strength in 2021.
Overall, Comcast’s revenue dipped 2.4% to $27.7 billion in Q4, while adjusted net income dropped 28.5% to $2.6 billion. NBCUniversal revenue dropped 18.1% to $7.5 billion in Q4, and 17.3% to $28.1 billion YOY, and adjusted profit decreased 20.7% to $1.6 billion.
NBCU’s cable networks revenue dipped 6.4% to $2.7 billion in Q4, driven by a 38% decline in content licensing and other revenue. Advertising revenue dropped 4.2%, which reflected continued ratings declines and reduced spending with a delay in sports – mainly the NBA and NHL seasons – due to COVID-19, though that was partially offset by higher pricing.
“Fewer sporting events in 2020 contributed to lower distribution and advertising revenue, as well as lower programming and production expenses of $655 million year-over-year,” CFO Mike Kavanagh said.
Broadcast revenue dropped 12.0% to $2.8 billion and advertising revenue decreased 9.6%, reflecting continued ratings declines impacted by a delay in airing new series, which were partially offset by an increase in local political advertising and higher pricing.
Film entertainment revenue decreased 8.3% to $1.4 billion in Q4, while theatrical revenue plummeted 70% as the pandemic forced theater closures and limited capacity operations as a result of COVID-19. Content licensing revenue increased 23% driven by 2020 releases that were shifted to premium VOD, including “The Croods: A New Age.” NBCU’s filmed entertainment business dropped 18.7% to $5.3 billion YOY.
NBCU still hopes to debut a number of franchise films in theaters this year, however, including “Fast & Furious 9” and “Minions 2,” though “the situation remains fluid” and the company is still adjusting its 2021 slate, such as the decision to push back the release of “The Boss Baby 2” from March to December.
“Our decision to release our titles direct-to-consumer via premium on demand when theaters were forced to close has proven to be profitable and the right move for us,” Roberts said. “While we look forward to when we can enjoy the theatrical release of many franchise films … we will lean into what has become a successful hybrid distribution model.”
Elsewhere, Comcast said it is making big investments to expand its Xfinity Flex TV streaming devices, which is currently free to broadband customers to connect to streaming services.
Comcast Cable CEO Dave Watson called Flex TV “a long-term platform opportunity,” adding that it would drive advertising via Xumo, the streaming ad tech company Comcast acquired in 2020.