Peacock losses to peak this yr because it slowly adds subscribers

Streaming service Peacock has slowly been retreating with consumers. Its losses on Comcast’s balance sheet, nevertheless, have been swift.

Like its peers, Comcast has been investing in its streaming platform by putting more of its content on Peacock. Nevertheless it’s coming at a heavy cost.

Peacock weighed down earnings for Comcast’s NBCUniversal, with the corporate reporting Thursday that Peacock recorded an adjusted lack of $978 million through the fourth quarter. For the general yr, Peacock’s losses were in keeping with what the corporate had earlier warned–about $2.5 billion.

The pain is not over yet. Company executives said Thursday Peacock losses will peak in 2023 at around $3 billion, but expect it to steadily improve after that.

Investors’ tune have modified about adding customers irrespective of the price.

Mounting content costs and slowing subscriber additions caused Wall Street to query the viability of the streaming business model within the last yr. When Netflix reported subscriber growth last week not only did its stock jump, but its competitors benefitted from it, too.

On Thursday, NBCUniversal CEO Jeff Shell said the corporate had “made clear from the beginning we’ll make a return” on its investment in Peacock. He added, “I feel we feel higher about that now,” because the streamer announced subscriber growth.

Shell noted the goal for Peacock all along was to make a return. NBCUniversal echoed what other media leaders have said in recent months about reaching profitability in streaming, especially Warner Bros. Discovery‘s David Zaslav as the corporate cuts back on costs, including on content.

Shell’s fellow executives said Thursday they were optimistic concerning the streaming service. Peacock added 5 million paying subscribers – its best quarter yet – and the platform now has greater than 20 million customers.

NBCUniversal was certainly one of the last to enter the streaming landscape with Peacock. As they slowly made their way into streaming, they launched Peacock with a less expensive, ad-supported option, something competitors have leaned into within the last yr.

Still, consumers adding Peacock to their streaming lineup has just begun to choose up within the last yr. That is likely been as a consequence of its deep sports slate. Sunday Night Football games air concurrently on the platform, as did 2022 World Cup matches and English Premier League games.

NBCUniversal movies on the platform have helped, too. The last installment of horror franchise “Halloween” debuted on Peacock and in theaters on the identical day in October. The studio’s 2022 hit, “Nope,” was also a lift, amongst others, executives said.

The subsequent day airing of programs from cable channel Bravo and broadcast network NBC has been a positive too, executives said Thursday.

Those next-day NBC programs also come at a value, though. For years, NBC content would air next-day on Disney’s Hulu platform. NBCUniversal let that deal expire last yr to strengthen Peacock as a substitute.

And besides that, propping up Peacock with NBCUniversal content from its linear networks also only helps to speed up its bleeding of Comcast’s cable-TV customers.

“We spend quite a little bit of money creating content,” Comcast President Mike Cavanagh said Thursday. “So migrating a few of that content as eyeballs move to a more streaming universe, we like what we’re doing and we had an outstanding yr getting paid subscribers to twenty million.”

Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.