Peacock, NBCUniversal’s streaming service under Comcast, posted notable financial improvements in the second quarter of 2024, but the overall picture was marred by a slight decline in its subscriber base. Peacock’s revenue surged by 28% to $1 billion, and its losses were significantly reduced to $348 million from $651 million in the same period last year, and from $639 million in the first quarter of 2024. However, the streaming service ended June with 33 million paying subscribers, a decrease from 33.5 million at the end of March, although this was still a significant increase from the 24 million subscribers in June 2023.
Balancing Financial Gains, The Impact of Price Adjustments, and Subscriber Challenges
The financial gains were lauded as the best year-over-year improvement in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) since Peacock’s launch in 2020. Comcast CFO Jason Armstrong had previously emphasized that 2023 marked the peak of annual losses for Peacock, with expectations for meaningful improvements in 2024. While these financial metrics reflect a positive trajectory, the subscriber decline indicates a challenging landscape for maintaining and growing the user base.
Peacock recently announced price increases set to go into effect on July 18 for new customers and August 17 for existing subscribers. This move, while aligned with broader industry trends, could potentially impact subscriber retention and acquisition. The streaming service is gearing up for the Paris Olympics opening ceremony on July 26, an event expected to draw significant viewership, which might help in stabilizing or boosting subscriber numbers in the near term.
Comcast’s Broader Business Performance
Comcast’s core cable and telecom business continued to face subscriber losses. The company reported losing 120,000 broadband users in the latest quarter, a sharp increase from the 19,000 lost in the same period last year. Video subscriber losses also narrowed from 543,000 to 419,000, signaling ongoing challenges in the traditional cable segment.
Despite these subscriber losses, Comcast’s media unit, which includes Peacock, saw a 2.1% revenue increase to $6.3 billion. This growth was driven by higher domestic distribution and international networks revenue, partially offset by lower advertising revenue. Adjusted EBITDA in this segment rose by 9.0% to $1.4 billion, thanks to stable operating expenses and increased revenue.
Brian L. Roberts, Chairman and Chief Executive Officer of Comcast Corporation explained in the company news release, “Broadband ARPU increased by 3.6% and we delivered 6% revenue growth in our connectivity businesses, while expanding our Adjusted EBITDA margin across Connectivity & Platforms to a record-high 41.9%. Media returned to Adjusted EBITDA growth, driven by Peacock, which delivered the best year-over-year improvement for any quarter since its launch in 2020. In Studios and Theme Parks, we faced difficult comparisons to last year, but our upcoming film and TV content and the debut of Epic Universe bode very well for the future. More broadly, I am excited about the growth opportunities ahead, as our teams innovate and collaborate to connect our customers, viewers and guests to the moments that matter.”
NBCUniversal’s studios segment experienced a 27.0% revenue drop to $2.3 billion, attributed to lower theatrical and content licensing revenue. The comparison to last year’s successes, such as “The Super Mario Bros. Movie” and “Fast X,” highlighted the decline. Adjusted EBITDA for the studios segment decreased by 51.4% to $124 million due to lower revenue and decreased operating expenses.
The theme parks unit saw a 10.6% revenue decline to just under $2 billion, primarily due to lower domestic attendance and adverse foreign currency impacts at international parks. Adjusted EBITDA for theme parks fell by 24.1% to $632 million, reflecting the revenue decline and lower operating expenses.
As Peacock continues to improve its financial standing, the slight decline in subscribers underscores the competitive and evolving nature of the streaming industry. Maintaining and growing its user base will be crucial for sustaining long-term success in a market where content and pricing strategies play pivotal roles. Comcast’s shares remained steady in pre-market trading following the earnings release, indicating cautious optimism from investors as they navigate these mixed results.
Please follow us on Facebook and X for more news, tips, and reviews. Need cord cutting tech support? Join our Cord Cutting Tech Support Facebook Group for help.