“It’s a costly pivot, and we’re right in the middle right now,” Jason Armstrong told an investors conference as the internet and cable giant manages its linear-to-online TV transition.
As the entertainment industry focuses on continuing linear TV pressures and streaming losses, Armstrong pointed to a “delicate balance” as the media giant pivots to streaming. That’s from a protected linear TV business for Comcast still throwing off cash from expensive cable bundles to an emerging Peacock platform amid changing viewer habits.
His investor conference appearance came amid increasing skepticism from Wall Street about profit and content spend predictions from entertainment conglomerates as they roll out costly direct-to-consumer streaming platforms. “It’s a costly pivot, and we’re right in the middle right now,” Armstrong said as NBCUniversal faces technology and marketing costs in launching Peacock, most recently with a focus on its paid advertising video-on- demand tier after ending free Peacock subscriptions.
For Comcast, the challenge in making the expensive pivot to Peacock — where Armstrong reiterated that 2023 will be a peak investment year for the new platform with an anticipated $3 billion in losses — is listening to market concerns about the marginal return on that precious investment capital. “The good news is linear plus streaming is a growth business,” Armstrong insisted as he returned to the theme of NBCUniversal managing the pivot from one to the other holistically.
To do that, he told the investor conference that TV content is the key, and in particular retaining the flexibility to put content on both the linear and streaming platforms and move it around to drive more engagement to Peacock. “That’s the balance we’ve got to get right. You want to make it more of a parity trade-off. You’ve got to replace some mechanisms. You’re adding a streaming service sub as you lose linear subs and you’ve got it covered domestically. Right now we’re in sort of a peak expense mode around funding this transition,” Armstrong told investors.
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