Comcast loses 419K cable subs, Peacock surpasses 20M in Q4

Cable operator Comcast continued to lose traditional pay TV video subscribers in the fourth quarter, while NBCUniversal’s Peacock streaming service saw paid users climb for another quarter alongside continued investment that dragged on the media segment’s earnings.

For the full year 2022 Comcast’s cable video subscriber losses reached over 1.9 million. Fourth quarter net video losses of 419,000 were slightly better than expectations but worse than the 349,000 residential video subs Comcast lost in Q4 2021. Subscriber decreases drove video revenue down 5.6% to $5.1 billion for the quarter, contributing to total cable revenues of $16.6 billion in Q4, which were up 1.4% year over year.

Comcast ended 2022 with a residential cable video base of around 15.5 million.

While the video side of the business shrunk in 2022 NBCU’s Peacock saw user growth throughout the year, doubling subscribers over the past 12 months to reach more than 20 million paid subs.  The year-end figure marks a strong 5 million increase over the 15 million it had at the end of Q3, and up from the 18 million NBCU CEO Jeff Shell disclosed in early December. Revenue at Peacock also jumped, tripling year-over-year in 2022 to $2.1 billion. However, continued investment at Peacock dragged down NBCUniversal quarterly earnings.

NBCU recorded higher losses at Peacock in the quarter, as well as $182 million in severance expense that impacted NBCU adjusted EBITDA for the quarter, which was down 36.6% to $817 million. NBCU reported an Adjusted EBITDA loss of $978 million related to Peacock in Q4, alongside $660 million of revenue – the latter up from $335 million a year ago.  The losses at Peacock were largely attributed to the cost of new content, including exclusive next-day broadcast and Bravo content, along with sports and films.

For the full year Peacock recorded an Adjusted EBITDA loss of $2.5 billion, in line with the company’s prior expectations.

Speaking on the earnings call Thursday, Comcast President Mike Cavanagh said that growth at Peacock is helping to offset weakness in the linear business, with losses for the streaming service expected to peak in 2023 at around $3 billion and steadily improve from there.

According to Comcast, subscriber growth for Peacock in the fourth quarter was driven by live sports, recent films and originals, and marks the best quarterly result since launching in 2020. Recent results from Nielsen’s The Gauge showed Peacock nabbed a 1% share of total TV viewing in the U.S., surpassing the threshold to break out of the report’s “other streaming” category for the first time.

Overall NBCU revenue was up 5.9% to $9.9 billion in Q4. Telemundo’s broadcast of the FIFA World Cup helped drive media revenue up 2.6% at NBCU to $6 billion in the fourth quarter. The FIFA broadcast contributed $263 million in incremental revenue.

Plans for ‘one global user interface’

In the linear video business, Comcast CEO and Chairman Brian Roberts said the company is managing subscriber declines by “taking a disciplined approach” to the company’s cost base, while making continued investments in its technology platform.

Roberts said that in 2023 the company expects several announcements to come on that front this year, including plans to launch “one global user interface” for Sky Glass, Xfinity, X1, Flex, Xumo with U.S. and international partners.

“Every entertainment customer around the world will get the same Emmy-award winning, voice-controlled experience,” Roberts said on the earnings call Thursday. “This scale not only brings us operational efficiencies but it also puts us in the enviable position when it comes to conversations with distributors, OEMs, programmers, app developers, and talent.”

Comcast last year announced free add-supported streaming TV (FAST) service Xumo would no longer be included in financials and as a result, the company’s advertising revenue was impacted in the most recent quarter.

Excluding political revenue, ad revenue at Comcast Cable dropped by 7.4%, reflecting the transition of the rebranded FAST – now called Xumo Play -  being contributed to the streaming joint venture with Charter.

Comcast’s consolidated Q4 revenue increased 0.7% to $30.6 billion. Net income was down 1.1% to $3 billion and Adjusted EBITDA was down 4.9% to $8 billion.