Comcast’s Broadband Growth Slows While Pandemic-Hit NBCUniversal Rebounds

Comcast’s Broadband Growth Slows While Pandemic-Hit NBCUniversal Rebounds

Comcast Corp.

CMCSA 1.22%

said it added fewer broadband customers than in recent quarters, a slowdown that comes after a period of record growth during the height of the coronavirus lockdowns.

The Philadelphia-based company, owner of Xfinity-branded broadband and cable services, the NBCUniversal media empire and the U.K.’s Sky TV business, reported a 9.6% decline in fourth-quarter net profit to $3.06 billion, or 66 cents a share, from $3.38 billion, or 73 cents a share, a year earlier.

Revenue rose 9.5% to $30.34 billion as Comcast’s media and theme park businesses continued to rebound.

Higher programming, production and operating costs, as well as realized and unrealized securities trading losses, weighed on the company’s profit.

Comcast on Thursday said over nine million people were paying to watch Peacock, NBCUniversal’s nascent streaming service, which is also available free of charge to existing cable and broadband customers of Comcast and other providers, like Cox Communications Inc. The company said an additional seven million of these customers used Peacock regularly.

It was the first time Comcast gave any metrics about the subscriber base of Peacock, which has been slow to gain traction as it competes with a growing field of streaming platforms, from established players such as

Netflix Inc.

and Inc.’s

Prime Video to newer entrants such as

Walt Disney Co.

’s Disney+ and

AT&T Inc.’s

HBO Max.

Comcast said it would spend $3 billion this year on content for Peacock—double what it spent last year—though some of that would be reallocated from NBC’s spending on TV.

“We haven’t really focused on paid subscribers and we already have over nine million people paying us real money,” said NBCUniversal Chief Executive

Jeff Shell.

Comcast CEO

Brian Roberts

said Peacock and the company’s broadband business were two of Comcast’s top priorities for the year ahead.

Comcast added 212,000 broadband subscribers in the fourth quarter, down 61% from the same quarter in the prior year. Its cellphone business, Xfinity Mobile, added 312,000 customers, while Comcast’s pay-TV business continued to shrink, losing 373,000 subscribers.

Comcast Cable chief

Dave Watson

said the broadband slowdown was largely due to fewer people changing homes.

Even with the slowdown in broadband subscriber growth, the Comcast Cable segment, comprising the broadband, cable-TV, landline and mobile units, made up the bulk of revenue with $16.41 billion, up 4.5% from the year-earlier period.

Comcast’s results since the third quarter show how consumer habits changed drastically at the height of the pandemic lockdowns—when Americans relied heavily on home broadband connections for work and school—and are now slowly going back to normal.

Industry analysts are forecasting cable broadband providers will continue to face pressure and see slowing growth as telecommunications competitors such as AT&T build out their broadband strategies.

Revenue for the U.K.-based Sky TV business slipped 2.4% to about $5.08 billion in the latest quarter.

The company’s NBCUniversal unit, which is made up of its television, film and theme park businesses, saw revenue rise 26% to about $9.34 billion.

The company said its theme parks, which have slowly rebounded from the early impact of the pandemic, recorded their most-profitable fourth quarter ever. Theme-park revenue nearly tripled to $1.89 billion during the quarter. Comcast has said that while domestic visitors have trooped to its parks in the U.S., China and Japan, it is still missing out on international visitors due to various travel restrictions.

Revenue for NBCUniversal’s media segment, which includes its broadcast and cable-TV channels, increased 8.4% to $5.83 billion, while movie studios—another business beleaguered in the early days of the pandemic—notched a 36% gain to $2.42 billion.

Adjusted earnings for the media unit dropped 49% during the quarter to $721 million, due to losses stemming from its streaming service, Peacock, which more than doubled to $559 million from a year earlier. The losses come as NBCUniversal invests more in its streaming business.

Overall, Peacock generated nearly $800 million in revenue in 2021, but posted losses of $1.7 billion. The company spent $1.5 billion on content last year.

Peacock offers consumers the choice between a free, ad-supported tier with limited content, and a premium tier, for $4.99 with advertising or $9.99 without. The company said most of its paying subscribers select the $4.99 premium, ad-supported tier.

While the company expects a significant bump in revenue for Peacock in 2022, the additional spending will likely result in an earnings loss of about $2.5 billion, Comcast finance chief

Mike Cavanagh

said. He said the timing of Peacock reaching break-even “may be pushed out from what we originally suspected.” The company initially said it believed Peacock, which was launched in 2020, would reach break-even in its fifth year on the market.

In an effort to boost Peacock’s offerings, Comcast is considering removing much of its content from Disney’s Hulu.

“Obviously much of our strong NBC content…premieres on Hulu, and over time we’d like to bring that back to Peacock,” said Mr. Shell, adding he wouldn’t comment on any discussions that may be taking place with Hulu.

Write to Lillian Rizzo at [email protected]

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Rachel Meadows

Rachel Meadows

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