The NBCUniversal Inc. Peacock streaming service is displayed on a laptop computer in an arranged photograph taken in the Brooklyn Borough of New York, U.S., on Monday, April 20, 2020.
Gabby Jones | Bloomberg | Getty Images
Streaming service Peacock has slowly been taking flight with consumers. Its losses on Comcast's balance sheet, however, have been swift.
Like its peers, Comcast has been investing in its streaming platform by putting more of its content on Peacock. But it's coming at a heavy cost.
Peacock weighed down earnings for Comcast's NBCUniversal, with the company reporting Thursday that Peacock recorded an adjusted loss of $978 million during the fourth quarter. For the overall year, Peacock's losses were in line with what the company had earlier warned--about $2.5 billion.
The pain isn't over yet. Company executives said Thursday Peacock losses will peak in 2023 at around $3 billion, but expect it to steadily improve after that.
Investors' tune have changed about adding customers no matter the cost.
Mounting content costs and slowing subscriber additions caused Wall Street to question the viability of the streaming business model in the last year. When Netflix reported subscriber growth last week not only did its stock jump, but its competitors benefitted from it, too.
On Thursday, NBCUniversal CEO Jeff Shell said the company had "made clear from the start we're going to make a return" on its investment in Peacock. He added, "I think we feel better about that now," as the streamer announced subscriber growth.
Shell noted the goal for Peacock all along was to make a return. NBCUniversal echoed what other media leaders have said in recent months about reaching profitability in streaming, especially Warner Bros. Discovery's David Zaslav as the company cuts back on costs, including on content.
Shell's fellow executives said Thursday they were optimistic about the streaming service. Peacock added 5 million paying subscribers – its best quarter yet – and the platform now has more than 20 million customers.
NBCUniversal was one of the last to enter the streaming landscape with Peacock. As they slowly made their way into streaming, they launched Peacock with a cheaper, ad-supported option, something competitors have leaned into in the last year.
Still, consumers adding Peacock to their streaming lineup has just begun to pick up in the last year. That's likely been due to its deep sports slate. Sunday Night Football games air simultaneously on the platform, as did 2022 World Cup matches and English Premier League games.
NBCUniversal movies on the platform have helped, too. The last installment of horror franchise "Halloween" debuted on Peacock and in theaters on the same day in October. The studio's 2022 hit, "Nope," was also a boost, among others, executives said.
The next day airing of programs from cable channel Bravo and broadcast network NBC has been a positive too, executives said Thursday.
Those next-day NBC programs also come at a cost, though. For years, NBC content would air next-day on Disney's Hulu platform. NBCUniversal let that deal expire last year to strengthen Peacock instead.
And besides that, propping up Peacock with NBCUniversal content from its linear networks also only helps to accelerate its bleeding of Comcast's cable-TV customers.
"We spend quite a bit of money creating content," Comcast President Mike Cavanagh said Thursday. "So migrating some of that content as eyeballs move to a more streaming universe, we like what we're doing and we had a phenomenal year getting paid subscribers to 20 million."
Disclosure: Comcast is the parent company of NBCUniversal, which owns CNBC.