NBCUniversal has had 10 million subscribers sign up to its new streaming service Peacock so far, according to parent company Comcast, which announced earnings on Thursday.
In the face of the COVID-19 pandemic, Comcast’s second-quarter net income was down 4.4% and revenue dropped 11.7%.
For Comcast’s cable company, cord cutting continued, with residential video subscribers dropping by 427,000 to 19.5 million in the quarter--indicating that streaming continues to supplant traditional pay-TV and why media companies are launching services like Peacock. Comcast Cable expects a similar drop in video subscribers in the third quarter.
"I'm pretty excited that as the world's transitioning, broadband is at the center of making a lot of that possible and now we can bolt on a lot of content and interfaces and hopefully we can do that in a way that customers can really enjoy," said Brian Roberts, CEO of Comcast, which has been focusing its business on connectivity.
At NBCU, adjusted earnings before interest, taxes, depreciation and amortization fell 29.5% to $1.6 billion as revenue dropped 25.4% to $6.1 billion.
Cable network EBITDA rose 3.5% to $1.2 billion despite a 14.7% drop in revenue to $2.5 billion. Costs fell faster because of lower programming and production expenses due to the cancellation of sporting events amid the pandemic.
Ad revenue at the cable networks were down 27%. Distribution revenue dropped because its regional sports networks had to credit distributors because of game that were cancelled or postponed.
Broadcast EBITDA was up 20% to $641 million as revenue slipped 1.6% to $2.4 billion.
Ad revenue was down 27.9% while distribution revenue rose 9.2% on higher retransmission consent payments for the NBCU television stations.
NBCU registered a 58.6% increase in content licensing revenue partly because of programming it is providing for Peacock.
NBCU’s theme part business had a $399 million loss, compared to a $590 million profit a year ago. Revenue was down 94%.
At Comcast Cable EBITDA rose 5.5% to $6.2 billion despite a 0.2% decrease in revenue to $14.4 billion. Revenue from high-speed internet rose 7.2% to $5 billion, while video revenue fell 3.2% to $5.4 billion.
Overall, Comcast's net income was $2.98 billion, or 65 cents a share, in the second quarter, down from $3.125, or 68 cents a share, a year ago.
Revenue was $23.7 billion, down from $28.9 billion.
The earnings and revenue results topped Wall Street estimates.
“Our response to COVID-19 has been extraordinarily fast and effective, and our products and brands continue to resonate strongly with our customers across all segments and all geographies,” said Comcast CEO Brian Roberts.
“The solid results that we delivered in the quarter highlight the resilience of our company. Cable delivered record second quarter customer relationship net adds, driven by the best second quarter high-speed internet net adds in 13 years. NBCUniversal successfully launched Peacock in Cable’s footprint in April, ahead of the streaming service’s U.S. nationwide launch earlier this month, with 10 million sign-ups to date. NBCUniversal also just recently announced a deal with AMC Theatres in the U.S. that allows Universal to release titles across PVOD platforms after a 17-day exclusive theatrical window. At Sky, our flexible strategy helped retain customers until key sports returned in May and June,” Roberts said.
“Overall, based on our results and the many organic growth opportunities that we have across our company, I am confident in our ability to continue to successfully navigate the impact of COVID-19, and emerge from the crisis even stronger. I could not be more proud of how our teams across Comcast Cable, NBCUniversal and Sky are together managing the business," he said.
