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Amid the growth of streaming, pay TV giant Comcast is “more focused” on striking shorter-term carriage deals with TV network companies “because change is so dynamic,” Comcast Cable CEO Dave Watson said on Wednesday.
He added that the company is also focused on making sure the fees paid in deals take into account content partners’ streaming strategies.
For example, Watson said that “how they are going to market with their content portfolio, … matters – it matters to the customer, it matters to the distributor.” He added: “So if they are making content widely available through an app, whether it’s SVOD [or other], we are going to make sure that everyone understands that and we can be a great partner in helping them transition, but it doesn’t mean you will overpay during the transition.”
Charter Communications CEO Tom Rutledge also said recently that streaming strategies play into the prices paid for programming, meaning they are “going to affect the value of content,” especially if it comes out of pay TV bundles.
Speaking at the MoffettNathanson Media & Communications Virtual Summit, Watson on Wednesday said that broadband services were “at the center” of the offering for Comcast. His team’s goal is to always offer “the right video package for the right segment” of customers, but “we are not going to chase unprofitable video” users, he added.
Asked if there is a floor for the pay TV business, such as a possible news and sports floor, Watson said the company has seen “elevated” price increases in carriage deals in recent years, which has contributed to “elevated” video subscriber losses.
As part of its first-quarter earnings conference call in late April, Comcast said its NBCUniversal streaming service Peacock had reached 42 million signups, “benefiting from the recent addition of exclusive domestic streaming rights to WWE Network and The Office.” The conglomerate had in its previous financial update in late January mentioned 33 million signups.
Comcast’s core cable systems grew total customer relationships by 380,000 to 33.5 million in the first quarter. Broadband subscriber net additions of 461,000 exceeded many expectations, while video customer net losses came in at 491,000.
Comcast chairman and CEO Brian Roberts on the recent earnings conference call touted business momentum, saying: “We are off to a great start in 2021. Our entire company performed well across the board, highlighted by another strong performance from cable, which posted … the most quarterly customer relationships in our company’s history.”
Macquarie analyst Tim Nollen after the earnings report raised his 2021 earnings estimates for Comcast and boosted his stock price target by $6 to $64.
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