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Peacock Reaches 9M Stand-Alone Premium Subscribers And 7M More Via Paid Bundles; Comcast Plans 2022 Spending Ramp-Up To $3B

Comcast CEO Brian Roberts reaffirmed the strategic course for NBCUniversal’s Peacock, revealing new metrics for the streaming service and signaling a plan to boost spending on programming.

During the media giant’s fourth-quarter earnings call, Roberts said Peacock’s premium tier now has 9 million stand-alone subscribers. Another 7 million subscribers come in via bundled offerings on Comcast’s platforms and those of other pay-TV distributors. Peacock Premium costs $5 a month with ads and $10 without them, but bundled customers generally pay nothing extra to get it. The service’s ad-supported basic tier is free for all viewers but has a more limited range of programming.

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The breakout of paid subscribers as a proportion of the monthly active user base of 24.5 million was the first one officially offered by Comcast since Peacock launched in mid-2020. The numbers came along with an overall positive quarterly report, as Comcast beat Wall Street estimates for revenue and earnings per share.

Average revenue per user (ARPU) for Peacock is approaching $10 when both subscriptions and advertising are combined, Roberts said. That is already ahead of the company’s initial projections of $6 to $7 in ARPU by 2024 — “and we haven’t even focused on paid subscribers,” NBCU CEO Jeff Shell added during the call.

“What we’ve learned so far is that we started with the right business model,” Roberts said. “With over 300 million hours of content consumed on Peacock per month, engagement with our platform has proved extremely valuable to our advertisers.”

Comcast plans to double spending on Peacock content to $3 billion this year, ramping to $5 billion and incurring EBITDA losses in 2022 of $2.5 billion. Some of the increased spending will be incremental and some is a reallocation from linear. The streamer’s​ peak investment year will be 2023.

As with WarnerMedia’s HBO Max, Peacock launched during the grim early phase of the coronavirus pandemic, joining Disney+ and Apple TV+ as efforts to close the streaming gap with Netflix. Deprived of original production and live sports, not to mention a major promotional engine in the pandemic-derailed Tokyo Olympics, it struggled to gain traction. NBCU opted to take bolder swings in order to keep pace with intensifying streaming competition, making deals to add the WWE Network, library jewel The Office and renewing Premier League soccer rights. Next month’s Winter Olympics in Beijing will have all of its events on Peacock, a major shift from last summer’s unpopular and selective carriage of the Tokyo Games.

Similar to Paramount+ or Hulu, Roberts said the “vast majority” of Peacock Premium subscribers opt for the cheaper, ad-supported tier as opposed to paying more to avoid ads.

A major tailwind for Peacock, in Comcast’s view, is the surge of video viewing across the board. Roberts said the annual level is approaching 600 billion hours in the U.S., up from 350 billion hours in the 1990s, when broadcast TV still led the way. Streaming has also boosted household spending on video by 10% since 2014, he added.

Citing Nielsen data, he said 60 million U.S. households watch at least 10 hours of NBCU programming each month, which puts the company ahead of rivals.

Peacock is now three-quarters of the way to the company’s initial projections of 30 million to 35 million MAUs by 2024.

Roberts said the goal of the spending increase will be to drive more premium subscriptions. Across NBCU and Sky, annual spending is now about $20 billion, including sports rights, he estimated.

“We think the most valuable end state for Peacock is to have two revenue streams,” Roberts said. “While we will continue to leverage the more than $20 billion in annual programming spend we already have across NBCU and Sky, we are committed to reallocating and increasing investment on top of this to drive further growth in paid subscribers.”

Heftier investments could push Peacock’s estimated breakeven (which had been anticipated in 2024) out further but execs weren’t specific. The content investments will all be funded by NBCUniversal’s cash flow.

Asked about the strategy for expanding Peacock outside the U.S., Shell said the plan will be to set up “bespoke, country-by-country” partnerships in an effort to reach the addressable market. Thanks to Sky’s reach to key territories like the UK and Germany and Sky Showtime, a joint venture in Europe with ViacomCBS, the company now reaches about 70% of the addressable market globally, Shell estimated.

“We believe, as everybody else does, that you need global scale to compete in the streaming business,” Shell said. “Like everything else, we’re taking a bit of a different approach than everybody else” to global expansion.

Comcast remains financially invested in Hulu through 2024, despite Disney having taken operational control. There has been considerable speculation that Comcast could try to negotiate an exit sooner than 2024. Asked about that scenario during the call, Shell said, “Much of our strong NBC content premieres on Hulu. Over time, we’d like to bring that back to Peacock. But any discussions we’re having with Hulu or will have with Hulu, we’re really not going to comment on. There’s nothing to report at this time.”

Jill Goldsmith contributed to this report.

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