Comcast/NBCUniversal may have a way to pull back its content from Hulu and put it on Peacock, its ad-supported streaming service.
According to the Wall Street Journal, Comcast has a small window early next year in which it can exercise an option to jump out of its content licensing deal with Disney, which controls Hulu and owns a majority of shares in the streaming stalwart. If that happens, NBCU shows including “Saturday Night Live,” “The Voice” and “Will & Grace” will reportedly leave Hulu in the fall of 2022.
If Comcast does not exercise the option, then NBCU content would stay on Hulu until 2024, at which point the conditions of Comcast and Disney’s Hulu agreement kick in. Under the terms of the 2019 deal, Comcast in 2024 can require Disney to buy its 33% stake in Hulu, and Disney can require Comcast to sell that stake at a fair market value. Disney is guaranteeing a minimum total equity value for Hulu at that time of $27.5 billion.
The new report seemingly contradicts comments Comcast CFO Michael Cavanagh made during the company’s most recent earnings call, where he suggested that his company was content to sit pat with Hulu.
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“…We're happy to be along for that ride, obviously, while we set up our own thing in Peacock. In terms of the deal, it is a couple of years out. But remember, we kind of put this together a couple of years ago. And I'm certainly glad we didn't exit at the time 3 or so years ago. So, we like the deal we have, and I think we're always open for business. But it will be fine if we stay to the end because I expect value to keep increasing,” he said.
During a recent investor conference, Comcast CEO Brian Roberts described Hulu as a “wonderful company” and a growing asset that many NBCU investors still like but hinted that his company will eventually pull its most important content off the service.
“And all that content still resides on Hulu. So, the biggest and best -- most relevant part of our content, at least from television, historical NBC and our cable nets and particularly NBC, are all licensed away, and that can change over time,” he said.
Peacock, which is due to launch in some of Sky’s European markets this month, added a “few million more” subscribers and monthly active accounts during the most recent quarter. But Comcast didn’t provide a specific new user total, which sits at 54 million sign-ups and more than 20 million monthly active accounts as of July 2021.
Peacock contributed $230 million in revenue but still accounted for an adjusted loss of $520 million. That brings Peacock’s total losses for 2021 up to $1.2 billion so far.