Comcast: media group faces an Olympic-sized dilemma


Comcast Corp updates

Comcast was among those fretting that the Olympics would be nixed. Now that the Tokyo Games are in full swing, for better or worse, the question for its American viewers is whether they know where to watch the competition.

Philadelphia-based Comcast is a fully-fledged media and telecom conglomerate offering cable and broadband alongside theme parks, movies and televised content. On Thursday, the company reported strong second-quarter results. Operating profits were up 13 per cent year on year as the entertainment industry rebounded. But much of the investor focus rests on Peacock, Comcast’s upstart streaming service. Peacock’s mixed reception needs the boost from fans of Team USA. But many are still unaware that it exists.

Comcast is the rare company that both offers cable TV lines and owns cable and broadcast television networks. The former is in sharp decline. The company announced that it had lost another 400,000 subscribers in the second quarter. But huge gains in broadband and mobile phone users are outstripping TV cord-cutters. Sports-programming rights for the Olympics costs billions of dollars. Still, advertising sales have been strong enough of late to boost profits in 2021.

The company must navigate the balancing act of knowing that traditional linear TV, while still highly profitable, is no longer the future. The Olympics offer Comcast the chance to make Peacock as indispensable as its rivals by showing high profile events such as basketball. Yet user growth is slow. On Thursday, Comcast announced that Peacock had 54m “sign-ups” and more than 20m “active accounts”. By contrast, streaming giant Netflix has 209m paying users.

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Between live sports, Universal films and NBC, Comcast has no shortage of desirable content. Just where the company places that content presents a dilemma between short-term returns and long-term growth. In the past two years, the company’s shares are up just a third, well behind both Netflix and the wider S&P 500. Comcast must hope that the games have only just begun.

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