Comcast’s NBCUniversal strategizes streaming future with broadcast assist

Comcast on Thursday reported fourth quarter and full-year 2024 earnings results and executives discussed the future vision for NBCUniversal’s media business, where it plans to more tightly integrate remaining assets under a more unified broadcast and streaming-focused strategy following last year’s plan to spin out most linear cable networks into a standalone entity.

In spinning off its declining linear networks into the publicly traded SpinCo, Comcast’s NBCU media segment is primarily left with the NBC broadcast network with NBC Sports and local O&O stations, Spanish-language station Telemundo, and the Bravo cable network, alongside the Peacock streaming service. It also has Universal and other studios business and Universal Theme Parks within the broader content and experiences group. 

And while Peacock benefits from NBCU programming, it doesn’t appear the separation of other linear networks will gut the SVOD of key content, as Comcast CEO and Chairman Brian Roberts disclosed barely any of Peacock viewership came from SpinCo networks.

“98% of the viewing on Peacock does not include the spun networks,” Roberts said on Thursday morning’s earnings call. He added that networks in SpinCo, which is under its own recently announced leadership including Mark Lazarus as CEO, “need their own direct-to-consumer digital initiatives and focus in investment” – although SpinCo has yet to disclose specifics around its own strategic plans.

When the company announced plans for SpinCo last November, it cited an approximate one-year timeline to complete the tax-free transaction. 

Others, namely analysts at MoffettNathanson, previously cited “catastrophic” ratings declines at the SpinCo networks – which include MSNBC, USA, CNBC, SyFy, E!, Oxygen and Golf Channel, among other assets - and the firm pegged some kind of consolidation for the entity as inevitable.

Comcast President Mike Cavanagh on Thursday emphasized the view that assets going into SpinCo are strong, but pointing back to the 98% stat Roberts shared, reiterated they “weren’t integral to the emphasis we’ve put on Peacock and a streaming future for NBC broadcast in particular.”

For the restructured NBCU, which executives said will still have nearly $40 billion in annual revenue, media business efforts are moved under a more streamlined management team led by Donna Langley as chairman of NBCU Entertainment and Studios and Matt Strauss as chairman of NBCU Media Group.

According to Cavanagh, together NBC and Bravo reach 100 million U.S. households each month and help power Peacock, the latter which improved 2024 annual losses by $1 billion compared to 2023. 

Going forward, the company envisions more cohesion, with a focus on streaming and broadcast together, where NBC and Peacock complement and feed into each other.

It will be “using NBC to drive Peacock and vice versa, more than maybe we have in the past,” Roberts said.

Cavanagh too noted that post-spin out it’s left with NBC broadcast and the Bravo network in particular – which features reality TV fan favorite franchises like The Real Housewives and Below Deck –  “both of which feed substantially the viewing in Peacock itself,” along with Pay-1 movies, sports and more. And the NBCU team sees opportunity to bring them together in a way that he doesn’t think would be possible without separating the cable networks business.

He suggested the restructured business and a more focused management front will help with decisions such a commissioning and windowing by looking at different distribution vehicles and content assets as a whole.

“They’ll create a cohesive management team across programming, so what content gets greenlit, with a complete end-to-end view about how you could window across NBC broadcast or Bravo or Peacock and back and forth,” Cavanagh commented.

He emphasized making investments with an end-to-end view and getting management teams streamlined, so they can make “quicker, better decisions” in support of a “singular remaining streaming focus” with important linear elements, in terms of Bravo and NBC.

This tees up the overall strategy NBCU sees for its media business.

“We’re not really running a Peacock-only strategy. We’re running a broadcast plus streaming strategy, and looking to optimize that over the years ahead,” Cavanagh added.

Notably, NBCU last year picked up NBA and WNBA rights under an 11-year deal that starts with the 2025 season, and professional basketball games are coming to both NBC and Peacock this year. Executives expect the NBA to be a “major driver of subscription growth in 2025.”

Management plans to handle step ups in costs associated with the NBA in the second half of the year, in part, through avenues like price increases, higher ad sales and repositioning of some programming.

In the fourth quarter Comcast’s broader content and experiences segment, including parks and studios, grew revenue 5% yoy to $12 billion. Within that, NBCU’s media segment generated $7.2 billion in revenue, up 3.5% year over year.

Peacock, meanwhile, increased revenue and reduced losses year-over-year both for Q4 and the full-year 2024. Peacock Q4 revenue of $1.3 billion and adjusted EBITDA loss of $372 million improved compared to Q4 2023 revenue of about $1 bilion and an adjusted EBITDA loss of $825 million.

For the full year 2024, Peacock generated $4.9 billion in revenue, up from $3.4 billion in 2023. Its full year losses improved by nearly $1 billion, with Peacock adjusted EBITDA losses totaling $1.79 billion in 2024. Comcast expects to continue to see improvement in Peacock’s revenue and losses in 2025.

As for subscribers, Peacock ended 2024 with 36 million subscribers – the same number it had at the end of Q3, but around 5 million more than at the end of 2023.

Happy with or without partners, M&A

While it’s still fine tuning a strategy, NBCU appears open to explore a variety of ways forward for the media segment, but also feels confident with the properties it already has.

“We’re not looking to need anything other than our own assets and our own focus,” Cavanagh said. Still, he acknowledged the NBCU media business is “wide open” to the possibility of partnerships and bundling and “will consider anything.” But said it would have to see what partners bring to the table. 

NBCU is trying to get assets tightly focused around a strong Peacock strategy, the executive continued, so if a good partnership doesn’t turn up, “I think we’re fine running what we have when you expand more widely to the whole media or content and experiences business.”

And alongside its studio and theme parks business, he said the remaining aggregate media company means there’s “a very high bar” when thinking about whether any M&A in the space would be accretive to the company.

“We like what we have, with or without anything inorganic,” Cavanagh commented.

Comcast pay TV losses continue

On the pay TV side of the house, Comcast continued to lose traditional video subscribers for the quarter and full year, although not as many as it did in 2023.

Fourth-quarter pay TV losses were 311,000, compared to 389,000 in Q4 2023. For the full year, Comcast lost 1.6 million net video customers, compared to the more than 2 million it lost in 2023. Still, Comcast’s pay TV base now stands around 12.5 million. That compares to over 16 million traditional video customers at the end of 2022.

On the call Cavanagh said the service provider intends to create new products for key consumer segments that offer more flexibility and better pricing, such as its newly launched skinny Sports and News TV bundle. That offer packages 50 linear networks alongside Peacock for $70 per month, which is meant to be priced competitively against virtual MVPDs and is bundled with Comcast Xfinity broadband services.

“We know sports fans want and need great broadband and we will continue to look for packages like these to sell more Xfinity Internet and to lower churn for existing subscribers, which together increase customer lifetime value,” he commented.

Traditional video revenue, while down 5.8% yoy in Q4, still contributed $6.5 billion for Comcast in the quarter. 

Comcast also reported broadband net subscriber losses (139,000 in Q4), but saw broadband revenue increase 2% yoy to $6.5 bilion in the period. It’s putting focus on wireless, where executives  cited a shift in strategy to package mobile with more of its higher-tier broadband products for both new and existing subscribers. Comcast continued to add wireless subscribers at pace, netting 307,000 wireless adds in the final three months of 2024.

Overall, Comcast said 2024 was “the best financial performance” in the company’s 60-year history with record revenue, EBITDA, EPS and significant free cash flow.

Consolidated Q4 revenue was up 2.1% to $31.9 billion, while adjusted EBITDA rose 9.9% to $8.8 billion. Comcast reported full-year 2024 revenue of $124 billion, up 1.8% yoy, and adjusted EBITDA of $38 billion, up 1.2% yoy.