By now, it’s old hat to complain about the variety of streaming services needed to get one’s sports fix. So it is noteworthy that Peacock parent Comcast this morning disclosed on its earnings call it would begin to start exploring partnerships for the money losing streamer, meaning some of the sports streaming clutter could be cleaned up.
Whether that means just selling Peacock in a bundle with a rival like Paramount+ or an out and out merger is yet to be seen. The billions of dollars of losses streamers incurred have slowed and in some cases gone into the black. But Peacock had a cash flow loss in the third quarter of $436 million, down from $565 million in the prior year period, according to its earning report.
Peacock parent NBCUniversal, like Paramount, are not in the Venu streaming sports channel bundle that Fox, Disney and Warner Bros. Discovery wants to offer (the endeavor is currently frozen by a court decision). Comcast executives on an earnings call made clear they are talking about a Peacock only partnership, not creation of a new mini-Venu with an entity like CBS selling jointly with NBC.
Asked by an analyst about bundling its sports with another provider, Comcast president Mike Cavanagh said, “Streaming partnerships, I think we are open to having discussions. But as I said, exploring the idea… the bar is really high for the whole company, media type of acquisitions.
“And the answer is streaming partnerships could be interesting; details matter one, one to the next to the next. So I, my only point is, we’re open to them, but they are very complicated, and they could vary in form. We like what we’ve got very much, so that it would just be as and when a good idea comes along, we’re just open to it.”
That Peacock lost hundreds of millions of dollars is noteworthy because that red ink came in the quarter that NBC had the wildly successful Summer Olympics from Paris. Comcast executives described the fortnight as profitable, unlike past Olympics, and it generated revenue of $1.9 billion. It also was a showcase for Peacock which wowed consumers with an easy to navigate interface that made all sports available with a few taps. Peacock’s revenue rose 82% to $1.5 billion.
Peacock added three million subscribers in the third quarter to reach a total of 36 million. It will certainly be a figure to watch if in Comcast’s fourth quarter report that number declines because of Olympic churn; subs who signed up just for the summer games split when it ended.
Cavanagh demurred when asked if Comcast’s new NBA deal starting after this season and costing $2.45 billion annually would make a profit.
“Over the long term, we expect the NBA to be something that adds value to our company, broadly, particularly in the media segment,” Cavanagh said. “It’s going to help broadcast and benefit from broadcast. We obviously saw that during the Olympics, the interplay of broadcast and streaming for sports and the technology for some audiences, of what you can do on the streaming side and the reach of… broadcast.”
Cavanagh emphasized the NBA brings a more diverse audience to Peacock and helps the platform offer year round sports programming.
Comcast also disclosed it is considering spinning out its cable business. Many of the channels are non sports–MSNBC, CNBC, Syfy, USA Network. But there are sports channels including regional sports outlets and Golf Channel. Unclear if Comcast’s investment in SNY and the MLB Network are included.
The spinout is thematically related to the streaming partnership hunt: they both are symptoms of the difficulty transitioning from linear to broadband. The cable bundle’s cracking is well documented: as subscribers cut the cord, and younger people don’t even get cable, the once money spewing cable bundle is far less profitable.
Thus, Comcast is looking to spin out the shrinking cable channels into its own shareholder owned company to immunize the mothership from their decline.
Meanwhile, as the cable bundle dwindles the streaming world grows. Walt Disney, which offers Disney+, Hulu and ESPN+, reported in August it turned the corner and reported a small profit as the entertainment giant like others cut back on content expenditures
