NBC Touts Advantage in Streaming Wars by Making Service Free
Comcast Profit Beats Estimates as Internet Subscribers Grow
(Bloomberg) -- Comcast Corp. said its NBCUniversal division will have a leg up in the streaming wars by offering its upcoming service free to the cable giant’s internet customers and promoting it on the company’s Roku-like platform.
NBC plans to jump into the crowded fight for streaming viewers in April with what it calls Peacock. It will include reruns of NBC shows, including “The Office” and “Parks and Recreation,” as well as a slate of original programs.
On an earnings call Thursday, NBCUniversal Chief Executive Officer Steve Burke said Peacock will be free to Comcast’s growing base of internet subscribers and will be featured prominently on Flex, a new device that helps Comcast customers organize their streaming services.
“Flex is a huge opportunity for Peacock,” Burke said, adding that the NBC programming will be available “at no additional charge to a broadband sub or cable sub.”
‘Cruising Altitude’
Being available free to Comcast’s 55 million customers in the U.S. and Europe, Peacock will “get to cruising altitude much more quickly” than rival subscription services, Burke said. It will be supported by advertising, a model that requires reaching as many viewers as possible.
The three biggest media companies -- Walt Disney Co., AT&T Inc.’s WarnerMedia and NBCUniversal -- are all launching streaming services within a few months of one another.
“This is a moment in time and a lot of people are being very, very aggressive about it,” Burke said. “I would anticipate that at some point there will be an inevitable slowing down and shakeout and the market will get more rational.”
Burke’s comments came as Comcast’s third-quarter profit beat analysts’ estimates, as the cable giant added more internet subscribers than expected. Its shares were largely unchanged at 11:28 a.m. New York time.
Comcast reported profit of 79 cents a share, excluding some items. That was up from 68 cents a year earlier and topped analysts’ estimates of 74 cents. Revenue was $26.8 billion, in line with Wall Street projections.
Internet Gains
The company added 379,000 internet customers in the quarter, up from 363,000 a year earlier. The cable giant lost 238,000 cable-TV customers, more than twice as many as it lost the year before. Analysts expected the company to add 334,530 internet customers and lose 201,000 TV customers.
Comcast’s internet business has become its growth driver as more people drop cable-TV subscriptions and sign up for broadband to stream online entertainment.
Selling internet is more profitable, in part because Comcast doesn’t share revenue with channel owners as it does in cable TV. As the internet subscriber base grows and the TV customer base shrinks, analysts expect the cable giant’s profit margins to widen.
To contact the reporter on this story: Gerry Smith in New York at gsmith233@bloomberg.net
To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, John J. Edwards III, Rob Golum
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