M+E Connections

Comcast’s Peacock streaming service has seen a “ton of momentum” in recent months, with 5 million subscribers added in the company’s fourth quarter (ended Dec. 31) alone, according to Jason S. Armstrong, who was recently promoted to Comcast CFO.

If you “unpack” that success, “you’d say it’s largely content success and availability that’s driven that,” he said Feb. 27 at Deutsche Bank’s 31^st annual Media, Internet & Telecom Conference in Palm Beach, Florida.

Bryan D. Kraft, Deutsche Bank Research Division senior analyst, pointed out that Peacock had its “highest quarterly paid net adds in the fourth quarter [and] finished a strong 2022 with 11 million net adds for the year” in subscribers.

At least some of that success can be traced back to Comcast’s initial decision-making on Peacock and “how we wanted to launch this, what we wanted it to be,” and the fact that “we leaned heavily into paid” Advertising-Based Video on Demand  (AVOD) and said ‘we think there’s a big market for paid AVOD,’” Armstrong said.

Comcast management thought that was the “right market to launch Peacock into and credit to the team; they got that right,” Armstrong said.

“While we were later to the game with streaming” than rivals, “we were sort of early to the market figuring out that [AVOD] was going to be a super interesting and large segment to go target,” he said. So “I think we’ve done really well in sort of market positioning,” he said.

Comcast has also had “day-and-date opportunities with Peacock,” he noted, pointing to the most recent entry in the Halloween horror film series as a “good example of that.”

Meanwhile, sports programming, where, when we negotiate rights, we’re negotiating both for linear and then, ultimately, streaming rights as well . . . [has] been beneficial to Peacock as well when you think about Sunday Night Football and the World Cup.

“So those are [some] of the contributors that really drove momentum at the end of 2022,” he said.

Then, “as you fast forward to 2023, just step down the same pecking order,” he said, noting Comcast has “huge opportunity coming out of the studios [with] a great slate for this year,” with film titles including the 10^th Fast & Furious 10 movie and the live-action Super Mario Bros. Movie, based on the Nintendo video game series, coming up.

The company’s latest Puss in Boots will also “obviously roll on to streaming in the not-too-distant future,” following its theatrical release, he noted.

“We’ve had a lot of success more recently with Peacock and we’ll continue to in 2023,” he predicted.

Another good sign is on the subscriber engagement front, he said : “We’re seeing 20 hours per month on Peacock at this point. That’s actually a pretty high level of engagement. We think we could probably drive that higher.”

Comcast recently stopped taking new sign-ups for the free tier on Peacock. What drove that decision, he explained, is that the company sees “more engagement is in paid AVOD … and the better” average revenue per user (ARPU) opportunity over time, the better loyalty opportunity, hence, controlling your churn, fits in the paid AVOD category. And so that’s what’s behind the move. We think this is, hopefully, an accelerant for that category. And within that, we’ve got the Xfinity sub base, which is right now on the free tier, but for premium content, and the ability to move that over time, which should be a boost this year for paid AVOD as well as for Peacock.”

Comcast also expects to see growth in its studio business, he said.
“We were … number two in worldwide box office last year,” thanks to the “tremendous success” it had with the latest Jurassic Park and Minions movies and the success it had with the horror films M3GAN and Halloween Ends,” he added. “And as we look at the year ahead, I think it’s more of the same….. So, we’re bullish on the studio business.”