NBCU CEO: Peacock has 18M subs; expecting 'big check' from Disney for Hulu
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NBCUniversal (NASDAQ:CMCSA) streaming service Peacock has seen a nice fourth-quarter subscriber gain, NBCU CEO Jeff Shell says in a conference address that took aim at entertainment rival Disney (NYSE:DIS) in a few areas.
Speaking to a UBS conference, Shell confessed it was hard not to get out of his seat and "jump up and down" about streaming success, noting Peacock has 18M subscribers as of this morning, vs. a bit over 15M at the end of the third quarter.
"We've doubled our paid subscribers at Peacock since the beginning of the year," Shell said. "That's real subscribers paying us real American dollars, not some of the bundled wholesale stuff that you see outside from other people." And those figures are outside of subscribers receiving Comcast service, he notes, since Comcast Xfinity is still bundled with Peacock at the moment.
Shell said rivals' choices are just backing up the calls NBCU made for Peacock.
"I think with Disney, Netflix, Warner all moving towards the [ad-supported video on demand] model, it just validates the business model that we chose for Peacock," he said. "We were late coming into streaming, but we clearly chose the right business model. Broad-based premium entertainment ad-supported is the lion's share of the market."
The key 2022 story for media businesses has been an advertising slowdown in the space, and Shell acknowledged the challenges. "The advertising market has been really pretty steadily worsening over the last six to nine months. And I think it's gotten even worse really in the last month or so," he says.
Whether that's due to macro conditions and recession fears, individual business getting worse or "just" uncertainty is hard to tell. But he says NBCU advertising growth will still be mid-single digits year-over-year in Q4, and so it's "not a disaster."
Meanwhile, the question of when Disney (DIS) will buy out Comcast's one-third share of Hulu looks likely to run to the end of the line in 2024.
In 2019, Comcast gave up its voting rights and ceded full control of Hulu to Disney, with a plan to sell its stake at a total-company valuation of $27.5B or whatever Hulu is appraised at in spring 2024. In the intervening years, chatter has focused on whether Comcast would get out earlier, or even try to take over Hulu itself.
Shell said he wishes there were something more "sexy and interesting" to say, but summarized: "We have a put, they have a call; end of '23, the process kind of happens in the beginning of '24."
"We think it's worth a lot of money because it's sold on a full control basis as if you were auctioning it off," Shell added. "And I think there's no indications that anything else is going to happen than Disney writing us a big check for the asset in '24."