Oh Peacock, You’re Way Too Young to Have Added Zero Subs in Q2

Peacock added no paid subscribers in Q2 and lost 1 million monthly active accounts on the free tier. There's help — and options — on the horizon.
BEL-AIR -- "Where To?", Episode 110 -- Pictured: Jabari Banks as Will Smith -- (Photo by: Tyler Golden/Peacock)
BEL-AIR -- "Where To?", Episode 110 -- Pictured: Jabari Banks as Will Smith
Tyler Golden/Peacock

NBCUniversal streaming service Peacock added zero paid subscribers in the second quarter of 2022 and lost 1 million monthly active accounts (MAAs) from Q1, according to second-quarter earnings Comcast reported today. That leaves Peacock with the 13 million paid subs it reported in Q1 and 27 million MAAs.

Comcast’s Q2 results stated that Peacock’s paid subscribers “stayed relatively flat” from the previous quarter. When IndieWire attempted to get a bit more granular with a Comcast corporate spokesperson, he would not elaborate.

Executives at NBCU’s parent company are doing their best to spin those results as a good thing. “Going from zero to 13 million paid subs in a couple of years at Peacock is a great achievement,” said Comcast chairman Brian L. Roberts during Thursday morning’s earnings conference call. Peacock launched just over two years ago and almost immediately suffered a significant hiccup when the Covid pandemic delayed the 2020 Summer Olympics.

By comparison, Netflix lost 970,000 global paid subs in Q2, so remaining flat might look a bit like a win. However, Peacock’s market position is nothing like Netflix. The preeminent streamer has largely matured in the U.S. and Canada, where it has 73 million (of its 220 million global) subscribers; Peacock is just getting started.

Peacock did not expect Q2 to repeat Q1, when it added 4 million paid subs and jumped from 24.5 million to 28 million MMAs. It had both the Super Bowl and the Winter Olympics in the January-March quarter to inspire paid additions as well as increased activity on the free tier.

Peacock is also not supposed to be profitable at this point, though executives would probably like to see it lose less money. While Peacock’s Q2 revenue rose substantially vs. the same quarter last year, expenses soared as well. All told, NBCUniversal’s media segment recognized an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) loss of $467 million due to Peacock, compared with a loss of $363 million in the prior Q2. Those losses are expected to grow in the second half of 2022.

MACGRUBER -- "The Scientist" Episode 104 -- Pictured: Will Forte as MacGruber -- (Photo by: John Golden Britt/Peacock
“MacGruber” — “The Scientist” Episode 104 — Pictured: Will Forte as MacGruber.John Golden Britt/Peacock

The near future also has reason for optimism. “We expect our recent premieres and planned slate of content and live events from our media and studios businesses, including ‘Jurassic World: Dominion,’ ‘Minions: The Rise of Gru,’ ‘Nope,’ ‘Sunday Night Football’ and The World Cup, to make significant contributions later this year, including to our subscriber growth at Peacock,” Roberts said in a prepared statement accompanying the financials.

Those big movies and major sporting events are sure to help,  but NBCUniversal is not leaving anything to chance. In September, NBC series will begin to stream new episodes the next day on Peacock. For years it had the same arrangement with Hulu, of which Comcast still holds a one-third stake. However, anyone who wants to stream “SNL” the day after it airs on NBC will have to jump on Peacock going forward.

Disney holds the controlling stake in Hulu with 66 percent ownership, but it cannot technically buy out Comcast until January 2024. At that time, it would cost at least two-thirds of $27.5 billion — or more than $18 billion. The reason we have to go with “at least” is because Hulu’s valuation has not been conducted or updated in some time now. Until the start of 2024, when something — anything — can happen, the real price tag hardly matters to ownership.

Suffice it to say Hulu will cost someone significant money, but it also offers a significant number of subscribers. As of our last update, on April 2, Hulu had 45.6 million paid subscribers.

Should Comcast take the money and run away from Hulu — the prevailing thinking for years— another possibility that would instantly add subscribers would be the acquisition of Paramount Global. Hell, it might not even cost more than Hulu: Paramount Global’s market cap is $15.5 billion. Adding in debt, the company’s enterprise value is $28 billion.

Comcast’s market cap is $177.7 billion, or about 11.5x Paramount. (It would be like $16.6 billion larger, but Comcast Q2 earnings news pushed down shares nearly 9 percent today.) The combination of Paramount+ and Showtime OTT topped 62 million subscribers at the end of Q1, with Paramount+ representing nearly 40 million.

Paramount Global has a diversity of services that Hulu alone could not satisfy including Paramount Pictures movies, the Viacom cable channels, and Pluto TV. It also comes with the CBS problem, since FCC rules would not allow NBC owner Comcast to operate two broadcast networks. Of course, with enough motivation there are ways around everything.

Comcast also toyed with the idea of acquiring Roku last year; the device maker and home to The Roku Channel had 61.3 million monthly active users at the end of Q1.

While organic user-base increases are on the horizon, in the streaming wars it’s grow or die. Time to fly, Peacock.

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