Parrot Analytics Comcast Earnings Note: Q1 2023

28 April, 2023

While all eyes will be on the fallout of ex-NBCUniversal CEO Jeff Shell’s abrupt departure, Parrot Analytics has analyzed where NBCUniversal and Peacock stand in the fight for consumer attention.

By several metrics, Peacock had its best quarter ever in Q1 2023. It hit a new high in US demand share for streaming originals, with the debut of Poker Face and Season 2 of Bel-Air both setting new records for peak US demand for the platform. Parrot Analytics’ Contention Valuation analysis has found that Poker Face is a powerful subscriber acquisition driver for Peacock.

However, questions remain about Comcast’s endgame with both Peacock and NBCUniversal as a whole. Can a major SVOD succeed with demand mostly driven by library titles like Peacock? Only one of the top 25 titles on Peacock with US audiences was a Peacock Original (Poker Face). How much more money is Comcast CEO Brian Roberts willing to part with before Peacock turns a profit? The streamer is set to lose $3B in 2023, after a $2.5B loss in 2022. 

NBCUniversal still has one of the most in-demand and valuable TV libraries in the industry. The company has been successfully leveraging this to both increase Peacock’s paid subscribers, which now stands around 20 million, and keep said subscribers on the platform. 

If Comcast is serious about its long term streaming ambitions, it must weigh its two most likely expansion plans. Buying out Disney’s ownership stake in Hulu is likely to cost nearly $20B, and would probably put an acquisition of Warner Bros. Discovery or Paramount Global off the table. But scaling via taking over Hulu or M&A with a competitor is likely necessary if Comcast wants to be a top player in the streaming era long term.

Peacock Originals Rising — US, Q1 2023

  • Peacock Originals hit their highest ever demand share in Q1 2023, accounting for 3.3% of US demand for original series. 
  • While Peacock’s share of demand for original series is still lower than other major streamers, its current share represents a 200% increase versus two years ago (1.1% in Q1 2021). 
  • Demand for original content is a key leading indicator of subscriber growth, and Peacock more than doubled its paid subscriber count from Q4 2021 to Q4 2022. 
  • Peacock’s originals share moved up this quarter largely due to the success of two shows: Poker Face and Bel-Air
  • The debut of Poker Face (peak of 27.1x more demand than the average show in the US) and the second season of Bel-Air (peak of 25.9x) saw the two highest US demand peaks for any Peacock Original. These were significantly higher than previous top Peacock Originals The Lost Symbol (17.2x peak demand) in 2021 and Brave New World (15.0x) in 2020.

Corporate Demand Share — US, Q1 2023

  • Corporate demand share assesses the long-term viability of the top media companies as they look to consolidate their original content’s availability exclusively onto their own platforms. 
  • However, with Wall Street’s mandate to focus back on profits, this view of the entertainment landscape can also be used to assess which companies have the most valuable content to license out, rebooting one of the original revenue streams in the TV business. It can effectively help value a conglomerate’s legacy and library content in aggregate.
  • NBCUniversal-originated series accounted for one tenth of all US TV demand in the first quarter of 2023. This makes it one of the five largest corporations when it comes to TV demand ownership in the US. 
  • As of Q1 2023, NBCUniversal was ahead of Netflix’s 8.3%, but trails its legacy media competitors Disney (20.0%), Warner Bros. Discovery (17.2%), and Paramount Global (12.5%) in this crucial category. 
  • This 10% corporate demand share is still highly valuable to Comcast, especially if CEO Brian Roberts is looking to either offload NBCUniversal or acquire Paramount or Warner Bros. Discovery in the coming years. Either combination would position the combined entity ahead of Disney in US corporate demand share for TV content.

Total Catalog Demand Share — US, Q1 2023

  • While demand for original content drives subscription growth, library content is key for customer retention, an increasingly crucial element of all streaming strategies as the market matures and consumers are offered more choice and easier ways to cancel than ever. 
  • The total catalog demand share data is a good indicator of which SVODs consumers are most likely to use as a default ‘streaming home.’
  • Peacock’s total catalog demand share grew in Q1 2023, up from an average of 7.1% for the full year 2022.
  • Peacock is largely used as the home of NBCUniversal’s vast library. In fact of the top 25 series available on Peacock, only one was a Peacock Original (Poker Face), while 13 were Universal TV produced series.
  • Taking NBC next day broadcast series off of Hulu and placing them exclusively on Peacock is proving to be a good subscriber retention strategy for the platform. Saturday Night Live, The Voice, Law & Order: SVU, and Chicago Fire all ranked among the top ten series available on Peacock in Q1 2023.

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