Comcast loses 487K video subs, NBCU’s Peacock adds 3M in Q1

Comcast on Thursday reported continued subscriber and revenue declines for its legacy cable business in the first quarter of 2024, while its NBCUniversal unit marked subscriber growth for Peacock – where executives said it’s now focused on retaining users and driving engagement, which both got a bump following the streamer’s exclusive airing of an NFL Wild Card playoff game in January.

“Our exclusively streamed NFL Wild Card game was a big success this past quarter. We added and then retained even more new Peacock subscribers than we expected,” said Comcast President Mike Cavanagh on Thursday’s quarterly earnings call.

Peacock gained 3 million net subscribers in the first three months of 2024, bringing its total subscriber base to 34 million – 12 million more than at the end of Q1 2023. Advertising revenue on the streaming service was up by around $100 million year over year to $404 million in Q1, though down slightly from Q4. Distribution revenues also grew year over year, reaching $593 million in the period compared to $352 million in Q1 2023. Comcast reported quarterly subscription revenue growth for Peacock of 68%.

Total revenue for Peacock was $1.05 billion, up 54% year over year compared to $685 million of revenue in the same period a year ago However, Peacock expenses still outpaced, totaling $1.69 billion in Q1, including $1.2 billion for programming and production and $488 million for marketing, promotion and other. But NBCU narrowed losses for Peacock both quarter over quarter and year over year, reporting an Adjusted EBITDA loss of $639 million for the streaming service in Q1. In the same period a year ago Peacock generated an Adjusted EBITDA loss of $704 million. Comcast expects to see on average, better year-over-year improvements for Peacock in the coming quarters.

Speaking on Comcast’s Q1 earnings call, Cavanagh reiterated that Peacock subscribers drive average monthly revenue per user (ARPU) of about $10 and said looking ahead, “our content offering provides such a great value proposition that we should have some real pricing power over time.”

In terms of the broader strategy for Peacock, which Comcast has categorized as one of six major growth drivers for the company, the executive emphasized progress and working to leverage the entirety of existing NBCUniversal assets, including linear, sports and movie studios, among other strengths “into a digital future.”

Sports, however, are a key focus and one of the types of content that can draw viewers to the platform.

That was seen with the NFL Wild Card playoff between in January between the Kansas City Chiefs and Miami Dolphins, which drew an average 23 million viewers on Peacock.

Cavanagh on Thursday said the game “brought in a tremendous number of subs, ahead of where we expected to be” as well as “retention that was ahead of where we expected it to be,” without going into additional detail.  

“So that’s obviously great and the power of sports to bring audiences together,” he added.

Just how many of the quarterly Peacock subscriber additions came from people signing up to watch the game and who stuck around isn’t clear. NBCU reported the same number of net additions in Q4, though only added 1 million in Q1 of 2023.

And Peacock continued to see benefits from the football lift after the game ended. Cavanagh said in the weeks following the game, viewing on Peacock was “at record highs across all parts of our non-sports portfolio.” So while sports can help attract viewers, Cavanagh noted that users are spending 90% of their time on Peacock watching non-sports programming. That includes the launch of original series “Ted” in the quarter – it’s most-watched original to date, and reality series “Traitors” which both made it into Nielsen’s top 10 streaming list earlier this year.

According to Cavanagh, it shows the various parts of NBCU’s portfolio are “interplaying well with each other,” where Peacock also offers pay-1 studio movies like Oppenheimer, alongside originals, next-day NBC and library content and sports. Oppenheimer started streaming exclusively on Peacock in February and became the most-watched pay-1 movie in the platform’s history.

But now the company continues to “focus hard on retaining the growth in subs we had” in Q1, Cavanagh said.

He noted that the second quarter will be lighter in terms of content, but down the pipeline sports will be back in play. In July Peacock will have extensive coverage of the 2024 Paris Olympics with over 5,000 hours of live coverage, where it has also rolled out several user experience and product updates to help viewers navigate the wide-ranging event. NBCU previously reported this year’s games are on track to generate the most ad revenue in Olympics history, with the company having secured $1.2 billion in ad sales commitments across linear and digital. And the fall will see the return of NFL football, Big Ten, and Peacock’s exclusive NFL Friday night opening game in San Paulo, Brazil.

“I think you can expect to see us having a very broad approach” to content, Cavanagh said in response to an analyst question on tolerance for Peacock original content and spending. “All of those things going into a service that we think is one of the best values in streaming and a very distinct place over time in the streaming marketplace for consumers.”

On the cable side, Comcast saw the rate of decline in video revenue accelerate compared to the three previous quarters, reporting around $6.9 billion in Q1 revenue, down 6.9% year over year.

While traditional video still accounts for a sizable portion of Comcast’s total revenue, the increased declines come on the back of continued residential pay TV subscriber losses. Comcast reported traditional residential video net losses of 487,000 – an improvement from the 614,000 it lost in the same period a year ago, but more than the 389,000 it shed in the fourth quarter of 2023. It’s traditional video subscriber base now stands at 13.6 million, compared to 17.6 million just two years ago at the end of Q1 2022.   

Total quarterly residential connectivity and platform revenues, which in addition to video includes Comcast’s broadband and wireless businesses, were flat year over year at $17.86 billion.

Total Media revenues, including TV networks and Peacock, increased 4% yoy to reach $6.37 billion in Q1.

That added to the company’s Content & Experiences segment, which includes linear media, streaming, as well as studios and theme parks. Overall, Content & Experiences business contributed $10.4 billion to the company’s Q1 revenue.

Comcast’s total Q1 consolidated revenue of $30 billion was up 1.2% year over year, while consolidated Adjusted EBITDA was flat at $9.35 billion.