Comcast CFO: Splitting Universal’s Pay 1 Window With Rival Streamers More Profitable

Universal Pictures’ decision to split the 18-month Pay 1 window between its sister Peacock streaming service, Netflix and Amazon Prime Video is generating more revenue than prior post-theatrical/retail home entertainment iterations, Comcast CFO Michael Cavanagh told an investor group.

Speaking Sept. 14 at the virtual Banc of America Securities 2021 Media, Communications & Entertainment Conference, Cavanagh said the decision to incorporate Peacock rivals in the Pay 1 window underscores NBCUniversal’s singular approach to movie distribution in the digital age.

Comcast CFO Michael Cavanagh

“Our road to streaming is going to be our own road,” Cavanagh said. “We’ll do what makes sense to us.”

In addition to feeding the growing Peacock asset and mining incremental revenue through premium VOD with original studio movies on an accelerated timeline, Universal has revenue-sharing agreements with AMC Theatres and Regal that allow it to release titles into digital retail channels as early as 17 days after their box office debut, depending upon opening weekend ticket sales.

Universal earlier this month announced it would release horror movie Halloween Kills, the sequel to the 2018 reboot that re-introduced Jamie Lee Curtis to the franchise, in theaters and on the Peacock on Oct. 15.

“We are firm believers that theatrical is important, but innovation around windowing is going to be part of what makes us successful over time,” Cavanagh said.

After Peacock’s exclusive four-month Pay 1 window, Netflix and Amazon split separate four-month periods followed by a four-month return to Peacock.

“The monies we received from third parties for that 18-month window — despite the fact we are keeping the first four months of that window — is actually more than what it had been prior to this new deal that we did,” Cavanagh said.

He said the strategy enables Universal to better leverage its theatrical content through Peacock while enabling competitive channels to mine incremental fiscal benefits for the studio.

“We think it is a long-term opportunity for us to keep the asset in our own libraries, while also giving us optionality for down the road,” Cavanagh said. “I think we served a lot of our different strategic purposes in the new windowing we did.”

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