Peacock Powers Push To Comcast’s Q3

Among the most noteworthy aspects of Comcast’s third-quarter earnings report was the extent to which Peacock has taken flight — and how sports is a key reason for its lofty results.

The earnings report, released today, showed that Peacock’s paying subscribers rose almost 80% in the quarter, to 28 million, compared with the same quarter last year. The streaming service’s revenue was up 64%, to $830 million, and adjusted EBITDA improved. Those results offset the challenging performance of NBCUniversal’s linear channels.

Overall, Comcast’s revenue in the third quarter was $30.1 billion, versus $29.8 billion during the same quarter in 2022. The adjusted EBITDA was $10 billion, compared with $9.5 billion, and adjusted earnings per share stood at $1.08 versus $0.96.

During the company’s call with analysts Thursday, Comcast Chairman-CEO Brian Roberts noted the strength of NBC Sports and broadcast television’s huge audience draws with programming like the Olympics and Sunday Night Football. But he also enthused about what’s going on within the still somewhat nascent streamer.

“With Peacock, now we have the most live sports of any of the streaming services,” Roberts said. “I believe that’s a surprise to many people when they learn that. That’s a commitment we made with English Premiere league, or Tour de France, or golf — or events that went on for longer periods of time than were typically on the network but you wanted more camera angles or more feeds or more games.

Roberts said that Peacock’s growth, and the sports component that’s helping to drive it, sets Comcast up for being “more relevant” during a transition: “how we go from analog to digital in a way that helps the leagues.”

Mike Cavanagh, Comcast president, noted the one-two punch of sports on linear and streaming options. “While sports over the long-term, I think, are going to be experienced significantly through streaming, for a long time the economics of sports rights is going to be substantially supported by broadcast reach.”

Streaming sports requires more bandwidth, which also plays into Comcast’s broadband business, Roberts said. “Sports are at the heart and soul of a lot of what we do.”

Comcast’s advertising results were lackluster. Domestic advertising in the media division of the company was down 8.4% compared with Q3 2022.

“[Advertising] remains soft. Hasn’t necessarily gotten worse, despite a little bit of sequential decline, but it hasn’t gotten better at the same time,” said Cavanagh. Comcast chalks that up to continued economic uncertainties. Peacock ad revenue remains “strong,” and most of the weakness is on the linear side of the business.

Among the ad sectors down slightly were retail and technology. But auto, pharmaceutical and consumer products were up. Entertainment also declined, but Cavanagh believes the category will inch upward once the strikes are completely over.

The combination of the World Cup and political spending should make the ad revenue pop up in the next quarter.

Comcast executives also discussed the FAST streaming service Xumo, a joint venture with Charter. It is also available to subscribers of Mediacom Communications cable systems. Roberts acknowledged that it is part of a larger industry trend that involves a re-bundling of channels after a few years when consumers have had a more a la carte approach to streamed services — and at a time when broadband usage is up, and cable video is declining.

“It’s somewhat ironic that we’ve unbundled to re-bundle to unbundle to re-bundle,” Roberts said. Referring to Xumo, he added: “A lot of it is having one great platform that now the entire industry has.”