Peacock still bleeding cash despite gaining new subscribers
In the third quarter of 2023, Peacock experienced further growth with more subscribers. Comcast reported that it added 4 million subscribers in three months and its advertising revenue increased. However, despite the financial benefits of those two, Peacock still cost Comcast $565 million.
Streaming services have been costing the parent companies millions, and it is not a problem exclusive to Comcast. For example, Paramount CEO Bob Bakish said 2023 will represent peak losses on streaming content. Paramount+ lost over $420 million in the second quarter of its fiscal year. Just like Peacock, Paramount+ has been gaining subscribers.
Comcast Chairman and Chief Executive Officer Brian Roberts assured investors and Peacock subscribers that this drain in cash is expected. Peacock and Comcast continue to invest in further projects to make the long-term future of the streaming service more enjoyable.
“We delivered strong financial results in the third quarter, while also investing in long-term growth, accelerating share repurchase activity and maintaining our healthy balance sheet,” said Roberts. “Our strategic focus on innovation and financial discipline facilitated by consistent execution positions us competitively both now and into the future.
By adding 4 million subscribers, Peacock’s total subscriber count grew to 28 million. Moreover, Peacock’s monthly price also went up by $1. Therefore, the current monthly price of the service is $5.99. That change only started in August, so Peacock and Comcast can continue to benefit.
Peacock subscribers growing, and loss is shrinking
NBC attributed the $565 million loss directly to Peacock. Yet, that is not such a daunting number when compared to previous years. For example, Q3 in 2022 demonstrated Peacock lost $614 million. Peacock is losing $50 million less than it did at this time last year. It will surely hope to ride that trend into the future of streaming.
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As it continues to grow its subscribers, the revenue from subscription fees will also grow. With 28 million subscribers, Peacock remains outside the top streaming services in terms of market share. Peacock will need to benefit from its Premier League streaming rights deal and its new Big Ten college sports deal. Peacock has exclusive rights to Big Ten football and basketball games, and the basketball season is about to get underway for the NCAA. Perhaps that can grow the subscriber count for the service. Consequently, its revenue will continue to climb, and losses will be minimized.
Will streaming losses ever cancel out?
In the new era of streaming, the one constant has been losses for providers. As stated, Comcast and Paramount are both losing money on their streaming services. Disney is too, but there is good news on that front. Each of these demonstrated in 2023 that the net loss is narrowing. In other words, companies are losing less money as streaming takes a bigger hold in the consumer market.
However, other investors have expressed concern that streaming platforms like Peacock will never turn a true profit. For example, Warren Buffet said it is not a generally good business because the shareholders have not done that great over time.
PHOTO: IMAGO