Comcast, the largest cable provider in the United States, reported its financial results for the second quarter of 2021 last week, including how the year-old streaming service Peacock is performing. The streaming service has had much success for the company in its first year, but Peacock continues to lose money for Comcast. Now reported under Comcast business segment NBCUniversal, Peacock had $122 million in revenue and adjusted EBITDA loss of $363 million in the second quarter of 2021, compared to $6 million in revenue and an adjusted EBITDA loss of $117 million in the second quarter of 2020.

For the six months ended June 30, 2021, Peacock had $213 million in revenue and an adjusted EBITDA loss of $640 million, compared to $6 million in revenue and an adjusted EBITDA loss of $176 million for the first half of 2020. Overall, however, for the second quarter of 2021, NBCUniversal’s adjusted EBITDA increased 12.5% to $1.6 billion, including the Peacock losses. For the full year, Comcast expects Peacock to lose $1.3 billion due to content spending for original content and sports programming.

Internet-first

As cable TV becomes less popular, Comcast has shifted its strategy to become an internet-first company with a range of other products and services (e.g., cable, mobile phones, business internet, home security, NBCUniversal, Peacock) to build out its portfolio. In terms of media and production strategy, the company said they are focused on creating premium content that can be scaled and monetized.

“Peacock adds to what we already offer. It’s a great complement to our linear brands, which are successful in their own right. And, together, these platforms provide a continuous loop of content and promotion that seamlessly drive viewership across our ecosystem, offering a different access point to attract new audiences while giving existing viewers more of what they love,” said Brian L. Roberts, Comcast chairman and CEO, on the company’s July 29, 2021 earnings call.

54 million sign-ups at end of July

Roberts said that as of last week, Peacock had 54 million sign-ups and more than 20 million monthly active accounts, compared to 42 million sign-ups and 14 million active accounts reported in their last earnings report. He attributed some of that success to the release of Universal Picture’s Boss Baby 2 the same day it was released in theaters; the debut of Peacock Original Dr. Death, the streaming services’ most successful original to date; and the 2020 Tokyo Olympics. [Editor’s note: The sign-ups quoted were as of the last week in July, so the revenue generated by new sign-ups and the Summer Olympics will not be realized until the third quarter.]

Peacock originally debuted via soft launch in April 2020, with a full launch in July 2020, as a precursor to the 2020 Tokyo Olympics. The service debuted with three tiers: an ad-supported tier and two ad-free tiers offering different levels of content. Due to COVID, the Olympics were postponed until this summer. Because only athletes and essential staff were allowed to be present at the Olympics, the only option families, friends and fans of Olympians had to watch the Olympics was to watch the games on NBC or  Peacock, a much-needed boost for Comcast and their advertisers. According to The New York Times, NBCUniversal planned to broadcast 7,000 of the Summer Olympics.

A new international strategy

To help Peacock gain additional ground, Comcast announced a new international streaming strategy on the earnings call. Peacock will be offered at no additional cost to Comcast-owned Sky’s 20 million customers across Europe. Comcast did not specify which tier(s) will be available to Sky customers for free, but it seems likely that the ad-supported tier will be the one offered.

“The benefits of this launch are tremendous,” Roberts said. “We will unlock incremental advertising revenue, introduce the Peacock brand and content catalog via Sky’s established platforms in key European markets and directly monetize our programming investments.”

Insider Take

Considering the pivot Peacock had to make when last year’s Summer Olympics were postponed, the three-tiered streaming service has done an admirable job of attracting sign-ups, subscribers and advertisers. Nothing went as planned last year, but the company adapted and overcame, getting the exclusive licensing rights to The Office, creating original programming, and drawing in advertisers as the world attempted to return to normal. Yes, Peacock is still losing money, but many of the streaming services pay billions for content to differentiate themselves from their competitors. NBCUniversal’s Peacock will eventually become profitable and be a strong contender as one of the top streaming services.