Tag: Michael Cavanagh

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.”

Comcast CFO: We Would Like to See More Peacock Sign-Ups

Comcast CFO Michael Cavanagh

Since launching the Peacock streaming platform last July, NBCUniversal has been coy about how many subscribers the service actually has. Corporate parent Comcast reported 42 million Peacock sign-ups through the end of the fiscal period ended March 31. But that tally is largely window dressing since the platform affords users with a free ad-supported option with limited content; a $4.99 monthly option with ads; and a $9.99 ad-free tier.

Speaking May 26 on the virtual JPMorgan 49th Annual Global Technology, Media and Communications Conference, Comcast CFO Michael Cavanagh shed some further light on the metrics, saying about one-third (or 13.8 million) of sign-ups use Peacock on a monthly basis. How many of them are paying a subscription remains unclear.

“We certainly would like to see more signups, more hours used,” Cavanagh said, adding the platform remains a work-in-progress convincing users to stream live sports (Premier League soccer), original sitcoms such as “Rutherford Falls,” “Friends” re-runs and live news going forward.

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With Netflix, Amazon Prime Video and Disney+ announcing monthly paid subscribers tallies of 207 million, 175 million and 103 million, respectively, Peacock has a subscriber gap of sorts to bridge. Indeed, Hulu, in which Comcast owns a 33% stake, ended the most-recent fiscal period with almost 38 million subs — 41.6 million when including online TV service Hulu + Live TV.

“We’re learning as we go [on Peacock],” Cavanagh said. “And that is shaping our plans as we go forward. We’ve brought content production back. Working on getting Peacock on other platforms.”

Cavanagh says NBCUniversal has the personnel and industry contacts in place to make Peacock grow ands thrive.

“By no means is streaming easy, for anybody,” said the executive. “I don’t mean to say that we have it all figured out. We’ll continue to view the world in streaming through a [strategic] lense. It’s early days.”

Cavanagh said the big bets being placed by media companies on global SVOD do not represent a path of success for everybody. On the heels of AT&T spinning off a minority stake in WarnerMedia, which includes HBO Max, and Amazon’s announced $8.45 billion acquisition of MGM, media reports suggested Comcast chairman Brian Roberts had been interested in both WarnerMedia and MGM — the latter for about $6 billion.

Cavanagh said the cable giant has no immediate plans to jump into the mergers & acquisition market.

“We’re playing our own hand,” he said. “Scale is a word that requires some discussion. Do we have the advantages that we need? We like the portfolio of the businesses we have. We like the hand we have without M&A, but we’ll obviously do what’s right for shareholders as time passes.”

Comcast Eyeing Ad-Supported VOD

With ViacomCBS staking much of its over-the-top video future on Pluto TV, the ad-supported video-on-demand platform, Comcast reportedly is considering joining the AVOD market that also includes Tubi TV.

The Wall Street Journal, citing sources, reports the cable giant is in advanced talks to acquire Xumo TV, the Irvine, Calif.-based service offering more than 140 digital channels of programming across 12 genres, including sports, news, kids and family entertainment. Content partnerships include CBSN, People TV, College Humor, and History, as well as the PGA Tour, among others.

The Xumo app is currently available on Roku and embedded in several smart TVs from Samsung, Panasonic and Vizio — the latter based in Irvine as well.

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Comcast unit NBC Universal is launching SVOD platform — Peacock — in April, 2020. Acquiring Xumo could help the cabler sustain its pay-TV legacy through an ad-based business model in the rapidly evolving digital ecosystem.

Comcast isn’t commenting on the scuttlebutt, but CFO Michael Cavanagh, speaking Dec. 9 at the UBS 46th Annual Global Media and Communications confab in New York, said the company was entertaining the AVOD market in response to a SVOD landscape dominated by Netflix, Amazon Prime Video, Hulu and Disney+.

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“We think we’ve got a pretty special opportunity [with AVOD], when you think about the relatively underserved segment of premium content ad-supported,” Cavanagh said. “Our work shows us that consumer demand is there.”

Indeed, since ViacomCBS acquired Pluto earlier this year for $340 million, the company has made the platform centerpiece to its global digital distribution strategy.

“Our focus on an investment in Pluto is evident,” Bob Bakish, CEO of ViacomCBS, said on the recent fiscal call. “In Q4 alone, Pluto launched 43 new channels and last month, Pluto Latino added 11 new channels given the platform of total 22 channels with over 4,000 hours of Spanish and Portuguese language programming.”

New AVOD roll-outs and improved ad-tech are expected to drive U.S. online video advertising revenue to $27 billion in 2023, according to IHS Markit Technology.

“The AVOD goldrush is here, and it represents a prime opportunity for service providers, new AVOD entrants and content companies,” said senior research analyst Sarah Henschel.

 

CFO: Comcast Wants ‘Healthy’ Relationship with Hulu

Hulu, the subscription streaming video service and online TV platform co-owned by Disney, Fox, Comcast and WarnerMedia, is valued by its corporate parents at more than $9 billion – despite posting hundreds of millions of dollars in equity losses.

Disney’s pending close of its $71 billion acquisition of 20th Century Fox Film, which includes Fox’s 30% stake in Hulu, will make the media giant majority owner going forward.

With WarnerMedia revealing a desire to sell its 10% Hulu stake, that leaves Comcast as a minority stakeholder to Disney’s vision for the 11-year-old over-the-top video platform going forward.

Speaking on last month’s fiscal call, Disney CEO Bob Iger said the company planned to incorporate Fox’s television production to up original programming at Hulu.

“We feel [that] will enable Hulu to compete even more aggressively in the marketplace,” said Iger.

Meanwhile, Comcast reported a $132 million equity loss at Hulu for the fiscal period ended Sept. 30 – up from an equity loss of $62 million during the previous-year period. Through nine months Hulu generated a $370 million equity loss for Comcast – more than double the cabler’s $168 million equity loss last year.

Speaking Dec. 4 at the UBS 46th Annual Global Media and Communications confab in New York, Comcast CFO Michael Cavanagh reiterated the company’s support for Hulu and belief that “some form of direct-to-consumer” product “will make sense for us.”

Whether that includes Hulu remains to be seen. Cavanagh wouldn’t offer any insight on possible changes in management’s mindset, saying only that the platform remained a good home for select NBC Universal programming.

“We want to continue to have a healthy relationship with Hulu,” he said. “We think much of our content finds a great home on that platform. And one way or the other, we want to make sure we have a good and healthy and constructive for everybody ongoing relationship with Hulu.”