Revenue for Peacock, the streaming service of Comcast's NBCUniversal entertainment unit, rose in the fourth quarter 57 percent to exceed $1 billion for the quarter for the first time, while narrowing its losses. The media, entertainment and technology giant revealed on Thursday that the streaming device ends 2023 with 31 million paid subscribers.
Comcast President Mike Kavanagh said at an investor conference in early December that Peacock had reached 30 million subscribers. It ended September with 28 million subscribers, after adding 4 million during the third quarter. This means an increase of about $3 million in the last quarter of 2023.
Jason Armstrong, Comcast's chief financial officer, told analysts during a morning call that Peacock's 3 million new subscribers during the most recent fiscal quarter came in part from viewers drawn to NFL and Big Ten football games, without specifying actual numbers. NBCU's loss related to Peacock was $825 million in the fourth quarter, compared to last year's loss of $978 million on revenue of $660 million.
Kavanagh spoke during the conference call about Peacock's broadcast of Saturday night's NFL playoff game, which averaged 23 million viewers on the main online platform and local NBC affiliates in the teams' home markets and on the NFL+ mobile app.
“Our investment in the network and our technology platforms built over decades have enabled us to shine, delivering a seamless online and Peacock experience, demonstrating that our company is excellently positioned to win in this high-bandwidth era,” he told analysts. .
To further bolster Peacock, Kavanagh reiterated Christopher Nolan's Oscar-nominated film Oppenheimer The biopic will be broadcast exclusively peacock From February 16, well after its theatrical release in July 2023. It promoted the 2024 Olympic Games It is set to stream on Peacock Live, with many events broadcast live on NBC and other NBCUniversal television platforms.
Kavanagh described Peacock as the “fastest-growing streaming player in the US,” looking beyond ongoing operating losses to leverage the streamer as part of an expanding, comprehensive television offering to consumers across a suite of NBCUniversal platforms treated as one comprehensive ecosystem. “2023 saw peak annual losses at Peacock, and for 2024, we expect to show significant improvements in losses, versus 2023,” CFO Armstrong told analysts.
The entertainment group had previously pledged to reach “peak losses” of about $2.8 billion for Peacock in 2023, down from $3 billion previously. On Thursday, it revealed that 2023 losses amounted to $2.75 billion. Peacock's revenue has continued to grow recently and throughout all of 2023.
Kavanagh told analysts that he was more focused on how Peacock performed amid NBCUniversal's overall television strategy, than on himself. “I'm less focused on what Peacock's standalone losses are doing than I am on doing what's right for the long term and the overall media business, which is linear and streaming. I think we've taken a very good path for us,” he said.
With legacy media ceding the scope of streaming subscribers to Netflix, streaming profits have become the focus of Wall Street. For comparison, in the last quarter of the year, Warner Bros. Discovery posted a $111 million profit for its direct-to-consumer division that includes Max/Discovery+, while Paramount Global reported a $238 million loss in streaming and Disney lost $387 million in Disney+/ESPN+. /Hulu Business Shared.
Peacock's latest updates were part of Comcast's fourth-quarter and full-year earnings report.
The company also reported the highest fourth-quarter and full-year adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for its theme parks unit. Profits rose 11.6 percent to $872 million in the fourth quarter and 24.7 percent to $3.3 billion for the full year.
Comcast lost 389,000 pay-TV subscribers in the fourth quarter, compared to a loss of 440,000 subscribers in the same period last year. It also lost 34,000 broadband subscribers recently after losing 23,000 subscribers in the fourth quarter of 2022, a data point that Wall Street analysts will analyze closely.
At Comcast's NBCUniversal, content and experiences results improved in the fourth quarter, driven by theme parks, media and studios. Content and experiences revenue increased 2.3 percent, or 5.9 percent when excluding severance payments.
Studio unit revenues in the fourth quarter rose 4.3 percent to $3.06 billion thanks to higher theatrical revenues, including performance Five nights at freddy's, Trolls band together, Al-Mu'awwidhatayn: The believer And Immigration. Content licensing revenues were little changed “as higher content licensing revenues at our film studios were offset by lower content licensing revenues at our television studios, primarily due to the timing of content being made available under licensing agreements, including the effects of the Writers Guild and Screen Actors Guild.” It stops working during the current year.
The studio sector's quarterly profits jumped 83% to $308 million, as higher revenues coincided with operating expenses being almost unchanged. “Fixed operating expenses primarily reflect fixed programming and production expenses, due to lower costs associated with lower content licensing sales at our television studios, including the effects of business interruptions in the current year period, offset by higher film costs,” Comcast explained. .
Comcast said its media unit revenues rose 3.1 percent to $6.98 billion “due to higher domestic distribution, international network and other revenues, partially offset by lower local advertising revenues.” “Domestic distribution revenues increased primarily due to higher revenues at Peacock, driven by increased paid subscribers. International network revenues increased primarily reflecting increased revenues associated with sports channel distribution and the positive impact of foreign currency.
Local advertising revenues decreased due to unfavorable comparison with Telemundo's broadcast of the FIFA World Cup in the prior year period. Excluding World Cup contributions, advertising revenue increased 2.7%, “primarily due to increased revenue at Peacock, partially offset by lower revenue at our networks.”
Media unit adjusted EBITDA in the fourth quarter decreased 50.2 percent to $108 million due to higher operating expenses, driven by increased sports programming costs and peacock programming costs, “partially offset by lower content costs at entertainment television networks.” We have, including effects, the Writers Guild and Screen Actors Guild are working on a hiatus during the current year period. The increase in sports costs reflects programming increases for the NFL and the English Premier League, as well as the addition of Big 10 content. The same period last year also saw Reduced costs for leagues temporarily suspended due to the FIFA World Cup.
The theme park unit's quarterly revenue rose 12.2%, driven by higher revenues at both international and domestic theme parks.
Fourth-quarter theme park profits rose 11.6 percent, as higher revenues offset higher operating expenses, which were due to “higher costs primarily associated with increased guest attendance.”
The company's “Corporate and Other” segment swung from a profit of $28 million to a loss of $5 million in the fourth quarter of 2023, with Comcast noting “an increase in operating expenses related to Sky's operations in Germany, due to higher costs for the Bundesliga compared to in… The period from the previous year when matches were paused for four weeks to accommodate the timing of the FIFA World Cup, and content charges related to the shift in our entertainment content development strategy. This segment includes things such as staff costs, Sky-branded services and networks in Germany, and the Philadelphia team Flyers ice hockey, the Wells Fargo Center arena in Philadelphia, and Xumo, the live streaming platform joint venture with Charter Communications.
Comcast, led by Chairman and CEO Brian Roberts and Kavanagh, has been repeatedly mentioned by bankers and Wall Street analysts as a potential player in future industry mergers and acquisitions. But the administration indicated that it would not be easy to drag it into concluding deals. Kavanagh reiterated late last year that “the bar is very high” for the company to pursue any deals. “Our job is always to look at things, but all I can say is the bar is really high because I really like the organic hand we have,” he explained. “We don't need to do anything inorganic in terms of acquisition.”
Roberts on Thursday praised the company's performance. “We finished 2023 and the fourth quarter with excellent operational and financial performance,” he said. “(We) were the No. 1 studio at the worldwide box office for the first time since 2015; maintaining Peacock's position as the fastest-growing streamer in the U.S.
“For the third year in a row, we achieved the highest revenues, adjusted EBITDA, and adjusted earnings per share in our company’s history,” Roberts asserted. “At the same time, we invested in future growth, returned $16 billion to shareholders and maintained a healthy balance sheet.”
Looking to the future, the CEO said: “2024 is already off to a great start – I couldn't be prouder of how our company has come together to deliver a record-breaking NFL Wild Card game on Peacock and the nation's biggest night ever online. Our unique, complementary capabilities will enable us to leverage Of the many opportunities ahead.”
Comcast's board of directors increased the company's dividend for the 16th consecutive year.
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