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Peacock hits 42m signups, a third are monthly active accounts

NBCUniversal streaming service Peacock has reached 42 million signups, parent company Comcast said in its latest quarterly earnings report.

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The conglomerate had in its previous financial update in late January mentioned 33 million signups. The streamer has been “benefiting from the recent addition of exclusive domestic streaming rights to WWE Network and The Office,” the company said Thursday.

NBCUniversal CEO Jeff Shell shared on an earnings conference call that about a third of that figure is from monthly active accounts. He highlighted that this was “about a third” of where Hulu is after 13 years, after just about a year for Peacock.

Management also touted “strong” usage for Peacock, saying it has come in double the internal projections.

Comcast chairman and CEO Brian Roberts said Peacock users are consuming “nearly 20 percent more programming hours each month than our traditional audience on NBC.” The streamer has just crossed 1 billion total hours watched, “nearly double our plan,” he said. That has allowed the company to offer new advertising inventory with rates “at a material premium” to linear primetime, he said.

NBCU sees “compelling” opportunities to roll out Peacock in international markets, citing potential partnerships with local programmers and distributors where it makes sense, Roberts also said.

Peacock revenue reached more than $100 million last year, but the streamer brought in a loss before interest, taxes, depreciation and amortization of $700 million given investments. NBCUniversal continues to expect losses of $2 billion for Peacock for 2020 and 2021.

Comcast on Thursday also reported its first-quarter financials, with entertainment arm NBCUniversal’s adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) falling 11.8 percent to $1.5 billion on a 9.1 percent revenue drop to $7.0 billion.

The results are the first disclosed under a new NBCU reporting structure, which now includes Peacock and the higher investments the streaming service brings with it. The new financial reporting, following a restructuring that aligned TV and streaming operations, is for NBCU’s media segment, studios unit and theme parks arm. Previously, NBCU reported results for its cable networks, broadcast TV, filmed entertainment and theme parks segments.

Studios segment profit in the first quarter rose 65.7 percent from the year-ago period, but media dropped 3.7 percent and the theme parks unit posted a loss. But Comcast chairman and CEO Brian Roberts highlighted: “Our theme parks once again reached break-even, excluding Universal Beijing Resort pre-opening costs.”

Studios revenue declined 0.6 percent to $2.4 billion in the first quarter, “primarily reflecting lower theatrical revenue, offset by higher content licensing revenue.” Theatrical revenue fell 87.7 percent, driven by “the deferral of theatrical releases as a result of theater closures and theaters operating at reduced capacity due to COVID-19.” Content licensing revenue rose 14.1 percent, “primarily due to a new licensing agreement for content that became exclusively available for streaming on Peacock during the quarter.” The lower revenue was more than offset by lower operating costs due to lower advertising, marketing and promotion expenses amid fewer theatrical releases, partially offset by higher programming and production expenses.

Media revenue rose 3.2 percent to $5 billion in the first quarter as higher distribution and other revenue outweighed a 3.4 percent decrease in advertising revenue caused by ratings declines, partially offset by higher pricing, sports volume and ad revenue from Peacock. Adjusted EBITDA dropped, though, because of higher programming and production expenses “primarily driven by amortization of content at Peacock.”

The company detailed that the media unit results for the first quarter include $91 million of revenue and an adjusted EBITDA loss of $277 million related to Peacock, compared to a loss of $59 million in the prior-year period.

Theme parks unit revenue fell 33.1 percent to $619 million in the first quarter, with Universal Orlando Resort and Universal Studios Japan operating at limited capacity, while Universal Studios Hollywood remained closed as a result of COVID-19. The division’s loss amounted to $61 million, compared with a year-ago profit of $87 million.

Comcast’s core cable systems grew total customer relationships by 380,000 to 33.5 million in the first quarter. “This is the first quarter on record,” Roberts said. Broadband subscriber net additions of 461,000 exceeded many expectations, while video customer net losses came in at 491,000.

Roberts on Thursday’s earnings call touted the nearly $30 billion that Comcast has invested in its network to keep it cutting-edge and ready for constant industry changes and needs.

At European pay TV giant Sky, quarterly revenue rose nearly 11 percent to $5 billion, while adjusted EBITDA fell nearly 34 percent to $364 million amid a 17 percent increase in operating costs and expenses, driven by higher sports programming costs. Sky’s total customer relationships increased by 221,000 to 23.4 million. Comcast said this marked “the best first-quarter result in six years” for Sky customer trends.

“We are off to a great start in 2021,” Roberts said. “Our entire company performed well across the board, highlighted by another strong performance from cable, which posted … the most quarterly customer relationships in our company’s history. Outside of cable, I was also very pleased by the persistent recovery and increasing momentum at NBCUniversal and Sky.”

Comcast shares rose in pre-market trading.

“Cable stocks have started ’21 temporarily underperforming the broader markets, with Comcast outperforming its cable peers given their exposure to a likely significantly rebounding NBC,” Pivotal Research Group analyst Jeff Wlodarczak wrote in a recent report. “Reasonably assuming first-half ’21 wide COVID-19 vaccinations, NBC results (about 20 percent of EBITDA) should rally powerfully in ’21, leading to solid consolidated results in ’21 and a potential blowout ’22 as growth rate of cable programming costs declines materially and NBC fully normalizes.”

He added: “Against this solid backdrop, Comcast is trading at a material discount to [the] S&P 500 earnings per share multiple, which we believe continues to represent an attractive opportunity.” Hollywood Reporter

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