Comcast Sees Peacock Losses Peaking at $3 Billion in 2023

The streaming service posted a loss of $2.5 billion in 2022, including $978 million in the fourth quarter

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Comcast reported Peacock had an adjusted earnings loss of $2.5 billion in 2022. (Getty Images)

Despite surpassing 20 million subscribers, Peacock’s losses continued to climb in the fourth quarter of 2022. But executives are hopeful that the streaming service will start to find a path to profitability after 2023.

“For 2023, we expect Peacock losses to be up modestly to around $3 billion,” Comcast president Michael Cavanagh said on the company’s earnings call on Thursday. “As we’ve said previously, we believe 2023 will be peak losses for Peacock and from there steadily improve.”

Peacock’s revenue for the full year nearly tripled to $2.1 billion, including $660 million during the fourth quarter. However, it posted an EBITDA loss of $2.5 billion in 2022, including $978 million or nearly 40% of that in the fourth quarter alone.

Peacock added 5 million net paid subscribers in the United States during the quarter, fueled by live sports and its recent films and originals, Comcast said. It marks the best quarterly result since the streaming service’s launch in 2020.

NBCUniversal CEO Jeff Shell noted during the call that Comcast is “more confident” about Peacock’s profit outlook compared to a year or two ago.

“We’ve been clear from the start that we’re going to see a return on investment [with Peacock],” Shell said. “I think we feel better on that now based on where we are.”

In 2020, Comcast projected that Peacock would break even by 2024 and have a total of 30 million to 35 million active accounts by 2025. Cavanagh and Shell did not answer when asked directly about when they expect Peacock to break even during Thursday’s call.

Comcast’s media segment saw a modest overall bump. Revenue increased 2.6% to $6 billion for the quarter, attributed to higher advertising and distribution revenue. Excluding $263 million generated by Telemundo’s broadcast of the FIFA World Cup, media revenue decreased 1.9%.

Advertising revenue increased 4%, primarily due to incremental revenue from the FIFA World Cup as well as an increase in Peacock advertising revenue. Excluding the World Cup, advertising revenue declined 5.6%, reflecting a softening in the overall advertising market.

“The ad market steadily worsened over the course of last year,” NBCUniversal CEO Jeff Shell said. “It kind of feels like it bottomed out around late November, early December.” He later added that it feels like the ad market has “stabilized a bit” and that Comcast assumes it will stay weak for the first half of 2023 and then recover.

Distribution revenue increased 3.8%, reflecting an increase in subscribers at Peacock and contractual rate increases, partially offset by a decline in subscribers at Comcast’s networks. Adjusted EBITDA decreased 81.7% to $132 million in the fourth quarter, reflecting higher operating expenses, which more than offset higher revenue.

“While we remain focused on managing costs, we expect underlying media EBITDA excluding Peacock to continue to be impacted by the top-line pressures at our linear networks,” Cavanagh added.

Elsewhere, NBCUniversal revenue climbed 5.9% to $9.9 billion for the fourth quarter, including $263 million in incremental revenue from the FIFA World Cup. Adjusted EBITDA decreased 36.3% to $817 million.

Following Thursday’s earnings announcement, Comcast shares have climbed approximately 12.8% year to date, but the stock is still down roughly 17% in the past year.