Comcast Presses Play on Streaming Business
Comcast’s Advantage
Comcast (CMCSA) is working to position itself for success in the competitive streaming landscape. In recent years, investors have voiced concerns that the company was not taking an aggressive approach to streaming and could be pushed aside by other streaming giants like Netflix (NFLX).
Now, Comcast wants to prove that it has what it takes to be a major player in the streaming market. The company is in a unique position because it has the capacity for content creation and distribution.
Distribution Plans
On the distribution side, Comcast is vying to become a competitor to Roku (ROKU) and Amazon (AMZN). The company has delivered cable TV channels to customers’ living rooms for decades, and now it wants to distribute streaming apps. Comcast has partnered with Walmart (WMT) and Chinese manufacturer Hisense to create smart TVs which could be available to consumers later this year.
Comcast’s smart TVs would highlight NBCUniversal’s Peacock streaming app, as Comcast owns NBCUniversal. This would be similar to the way that Amazon promotes its Prime Video service on its Amazon Fire TVs.
Content Creation Plans
From a content standpoint, Comcast has big plans for its streaming app, Peacock. Peacock has generated advertising revenue since its launch almost a year ago, but it lags behind streaming industry leaders when it comes to subscriptions. The service has a premium ad-free version and a cheaper ad-supported option. Additionally, the service is free for Comcast cable and internet customers.
As of late April, Peacock had 42 million sign-ups. But fewer than 10 million customers were paying for the service as of May. For context, Netflix had roughly 208 million subscribers globally in the first quarter of 2021. Over the next two years, Comcast plans to spend $2 billion on content for Peacock as a way to gain more subscribers. In total with its movie and TV arms, Comcast spends about $20 billion on content annually. Investors will be eager to see if the media giant’s plans for content distribution and creation pay off.
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