Comcast adds 4 million Peacock subs as traditional video losses stack in Q1

Comcast executives on Thursday touted strong subscriber growth for its Peacock streaming service in the first quarter, but didn’t spend much time talking about its traditional video business, which shed more than 500,000 customers in the first three months of 2022.

Peacock, the subscription streaming service that’s reported as part of NBCUniversal, had an “exceptional” first quarter, according to Comcast CEO Brian Roberts. It brought in 4 million paid subscribers in Q1, ending the period with over 13 million paid customers and 28 million monthly active accounts in the U.S.

The growth expanded Peacock’s total paid subscribers by over 40%. Retention was also “well above our expectations” he said, after a full slate of programming including sports and originals aired in a concentrated window early in the year.

“We’ve seen a 25% increase in the hours of engagement year over year,” Roberts added.

However, given the ebb and flow of Peacock’s content slate, he acknowledged that the company doesn’t expect to see that type of growth every quarter, telling investors to expect more modest subscriber gains in the coming quarters until the back half of the year. The fourth quarter “should be fantastic,” Roberts said on Thursday’s earnings call, pointing to sporting events like NFL’s Sunday Night Football, Premiere League, and the World Cup, along with other original series, film lineup and starting in the fall, Peacock as the exclusive home of the next-day NBC broadcast lineup.

Peacock, which also has a lower-cost ad-supported tier, saw streaming subscriber growth in the first three months, the same period when SVOD giant Netflix reported slowed growth and net customer losses of 200,000.  

“Our streaming strategy is differentiated, unique because Peacock is a natural extension of our existing video businesses, with two revenue streams and full integration across every aspect whether it’s programming, cross promotion or advertising,” Roberts said. “Peacock builds audiences, extends our reach, and creates new consumer experiences within our ecosystem, which should enable video to be a major long-term growth driver for NBCUniversal.”

The series “Bel-Air” debuted on Peacock and is the service’s most successful original to date. Comcast also had to major sporting events in Q1, including the Super Bowl and Olympic Games in Beijing, which were broadcast in the same week. More than 200 million people in the U.S. watched the live events either on Peacock or other Comcast platforms.

In Q1 Peacock lost $456 million in EBITDA on $472 million of revenue. Total NBCUniversal revenue was up 46.6% versus Q1 2021 to $10.29 billion, including a 36.3% year over year bump in its media segment to $6.86 billion. Comcast reported $1.5 billion of incremental revenue from the 2022 Beijing Olympics and NFL’s super Bowl in the media segment.

In a note to investors Thursday, MoffettNathanson analysts said that revenue for the media segment soared thanks to the inclusion of the Olympics and Super Bowl but would’ve still been up nicely year over year without it.

“The Olympics were a ratings (and, presumably, earnings) dud, however, and Peacock continues to rack up losses – the company is expecting a $2.5B loss for Peacock for the year, with those losses back-end loaded, so those higher revenues didn’t translate into OCF,” wrote analyst Craig Moffett.

 During the call Roberts also said Peacock will also benefit from a new joint venture with Charter for a streaming platform and hardware, which was announced Wednesday, thanks to deep integration similar to the service on Comcast’s X1 and Flex. The integration will help expand Peacock’s user base more quickly and drive higher engagement, he said, resulting in greater monetization at NBCUniversal.

Gains at Peacock contrast to Comcast’s traditional video business, which saw first quarter net customer losses stack to 512,000, compared to 491,000 net losses in Q1 2021. That includes losses of 484,000 residential and 27,000 business video customers. Comcast ended the first quarter with 17.66 million video customers, down from 19.35 million a year prior.

Video revenues shrunk 1.5% year over year to $5.54 billion. Total Cable revenues were up 4.7% to $16.5 billion.

Comcast’s consolidated Q1 revenues were up 14% to $31 billion, with net income of $3.5 billion. Adjusted EBITDA was up 8.8% to $9.15 billion.