Comcast, Peacock, AMC, Hulu, Disney, And All That Jazz -- August 2, 2020

I'm sure I was the last one to find out about this. I've been following "Peacock" and have actually watched some shows already on "Peacock," but I did not know the "rest of the story.

It's important to me because decades ago I invested in something (I've long forgotten what it was) for my daughters which then morphed into something called Comcast (CMCSA). I have no complaints about CMCSA as an investment. I haven't followed it very closely. "Max" looks oka and it had a nice dividend. 

Little did I know. Today, over at Motley Fool, "Comcast goes all in on cord-cutting." For anyone interested in CMCSA as an investment, this is a must-read.

The high points.

First:

On Thursday's second-quarter earnings call, the company announced a shift in its emphasis from the linear TV business to streaming -- a move that comes hard on the heels of its formal launch of the Peacock streaming network nationally, and just days after it forged a landmark deal with cinema chain owner AMC Entertainment to dramatically shrink the length of time that movies must be given theatrical exclusivity before they can be shown by other means.

 

As a result of that latter agreement, AMC will continue to screen Universal movies in its multiplexes, and Comcast will be able to offer them on demand starting 17 days after their release.

Those two moves, along with its robust broadband internet business, give the company confidence to shift its strategy and invest in a growing niche of the entertainment industry while cable continues to decline.

Second:

The shift in emphasis away from cable also comes as Comcast's broadband business nears the point where it will surpass pay-TV as the company's biggest revenue generator. By building more of its business around streaming video, Comcast will encourage increased broadband adoption and spending.

NBCUniversal CEO Jeff Shell explained the move on the earnings call, saying the pandemic has accelerated a shift in viewership from linear TV to non-linear. In response, the company has combined its linear and streaming departments and is planning to announce a new structure for that business, which is expected to shift resources from linear to streaming and will include layoffs, according to Variety.

Third:

Management said more than 10 million households have signed up for Peacock since its soft launch for Comcast customers in April and its national debut for everyone in July. The company's stated goal is to boost that number to between 30 million and 35 million by 2024, though that could prove to be a conservative target, given the surging growth of other newish streaming services, such as Disney+, and even more so since Peacock offers people the option of a free, ad-supported tier. Shell said the number of sign-ups so far has exceeded expectations and that viewers were watching Peacock more frequently and engaging for longer times than expected. The NBCUniversal boss also touted new programming coming to the service in January, including The Office, which has in the past been the most watched show on Netflix.

Fourth:

Comcast also owns one-third of Hulu, giving it another valuable stake in the streaming video world, though it has agreed to sell that minority share to Disney, which owns the rest of it, in 2024.

Fifth:

The deal ended a dispute with AMC, the world's largest movie theater operator, which kicked off after Shell said NBCUniversal would release movies simultaneously in theaters and at home, following the successful on-demand release of Trolls World Tour. 

AMC responded by saying it would ban Universal movies. The agreement they announced this week seems to be in the best interest of both parties. Theater owners get exclusivity for a period that covers movies' first three weekends in release -- which is when most films rake in the majority of their box office hauls anyway. And Universal gets the ability to make money both from ticket sales and through video-on-demand rentals -- a niche that includes AMC's own PVOD platform, AMC Theaters on Demand.

Years and years ago I tried keeping up with the various cell phone "specs" / cell phone technology but soon gave up. It was impossible to keep up. Remember the "CDMA vs GSM" debate? So long ago. Now, I'm trying to keep up with the various networks, streaming services, content providers and their relationships. It's impossible.