Comcast CEO: More Internet growth ahead, likely unloading Hulu stake
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Comcast (NASDAQ:CMCSA) CEO Brian Roberts focused on streaming in an investor conference appearance Tuesday, saying it's now more likely that the company will offload its Hulu position to Disney (DIS), and that the company will start charging its own cable customers for access to its direct-to-consumer Peacock offering.
Speaking to the MoffettNathanson conference, Roberts said when it comes to content strategy, streaming is a logical extension, and Peacock is its way to take advantage of a technology shift and bring content to an audience "on any device, anywhere they want to do it."
Its stake in Hulu predates Peacock, but "we are making money in streaming, because I'm pretty certain if and when we sell our Hulu stake, it will be for more than what we have in it -- in fact, that's contractually certain."
It's now "more likely than not that we go through" with selling the company's one-third stake back to Disney (DIS) next spring, Roberts said. (Disney CEO Bob Iger signaled that outcome last week, saying his company was now taking a greater interest in general entertainment on the Disney earnings call.)
"Disney recognizes as anybody else would recognize that Hulu is really valuable," Roberts said. There's never been a streaming service of that size for sale, "and so what's that worth to any buyer, including Disney ... we're including other tech companies ... the job is to then give us one-third of that value."
The Peacock opportunity is notable, though: "We have 22M or so customers paying us and consuming a load of advertising, digital advertising, the most valuable advertising," Roberts said. "And we have a pretty exciting 2023, because all of Comcast doesn't pay, because it was something we gave away and we've decided to now have some charge to those consumers that want Peacock in the future. So in the back half of this year, we're going to begin to convert many customers from included in your service to an additional charge."
Addressing a notable deceleration in cable broadband growth, Roberts said there's "a bit" of maturation in the market "but I don't think broadband itself is anywhere near mature ... One thing I don't think we competed as well for is the lower end of the market."
As for cable broadband's growing footprint in wireless offerings, Roberts suggests it's not just a nice moneymaker, but "very strategic."
It's "early days" but "we're having great early success ... we've got 6M lines, we're 10% penetrated. ... It is the best deal, the best product, and we have a good relationship with Verizon (VZ). And we're free to build our own towers and cells and things if we choose to, and the deal goes in perpetuity. So we are a capital-light model, and we have an exceptional consumer experience and we're just getting started."
Along the way, Comcast has reached a deal with the NFL to take one playoff game to streaming-only, on Peacock. (That's another step in a march toward needing streaming access for sports, after Amazon.com took exclusive rights to the NFL's Thursday Night Football.)
As for the Xumo streaming hardware box on which it's collaborating with key rival Charter (CHTR), "you'll love it when you get it," Roberts said. "I guarantee you it's going to be better than anything you've had."