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  • Peacock Gets 10 Million Sign-ups; Broadband Shines for Comcast

    NBCUniversal’s streaming service Peacock signed up 10 million users since launching for Comcast’s subscribers in April and nationally in July, Comcast announced today in its Q2 earnings release. On its earnings call Comcast noted that the 10 million figure represents sign-ups, not monthly active accounts or users, and that it was still too early to report on these latter metrics which are critical for ad-supported businesses. However, Comcast said use and engagement times were running ahead of expectations so far. CEO Brian Roberts said “Peacock exceeded our high expectations.”

    Comcast also didn’t provide any detail on the breakdown of user type. Peacock has 3 service tiers: free, ad-supported, premium with ads ($5/month) and premium without ads ($10/month). Comcast video and broadband subscribers get Peacock premium with ads for no monthly fee.

    Comcast executives made clear on the call that Peacock and Flex, the streaming media player Comcast provides at no charge to its broadband subscribers, plus a suite of control/utility broadband features are critical to serving the growing segment of its customer base that no longer subscribes to video services. Cable Communications president Dave Watson said that “broadband is about more than just speed” and that “churn remains at all-time lows.” Certainly the pandemic has been a driver as people work from home. 

    The broadband and video segments continue to diverge. At the end of Q2 there were 27.2 million residential broadband subscribers, up 340K in the quarter (nearly double the 182K adds in Q2 ’19 and the best Q2 in 13 years). Comcast ended the quarter with 19.5 million residential video subscribers after losing 427K in the quarter (more than double the 209K lost in Q2 ’19).

    Broadband has become a higher priority for Comcast in recent years and company executives acknowledged again on the earnings call that better serving non-video customers essential - even with third-party content and services like offering the Sling TV app. Comcast CEO Brian Roberts said the company was “leaning into streaming” to “remain relevant to customers” as it seeks to “bolt on a whole bunch of content and interfaces that non-video customers can enjoy.” Comcast reiterated that it wouldn’t “chase unprofitable video customers” which means cord-cutting will likely accelerate going forward.

    Overall the company weathered the pandemic reasonably well in Q2, with Q2 revenue of $23.7 billion and adjusted EBITDA  of $7.9, down 11.7% and 9.1% respectively vs. Q2 ’19.

    There are lots of reasons to be bullish on Peacock given its strong content catalog, promotional leverage from Comcast, positioning as free, light ad load and excellent UI. And Comcast noted “The Office” will come to Peacock in January. But streaming is an extremely crowded space, and the monthly active user count will be critical to watch going forward.

     
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