Comcast CFO Talks Direct-to-Consumer Plans, Hulu Stake

Courtesy of Comcast
Comcast CFO Michael Cavanagh

"Some form of direct-to-consumer we think will make sense for us," Mike Cavanagh told a UBS conference. "We have and want to continue to have a healthy relationship with Hulu."

NBCUniversal owner Comcast is working on its own direct-to-consumer strategy but won't abandon its existing TV businesses for it. Instead it plans to use any future direct-to-consumer offering as one of various outlets for its content, Comcast CFO Mike Cavanagh said Tuesday.

"We think the [TV] business that we are going to be healthy for shareholders for quite some time," he said at the 46th annual UBS Global Media and Communications Conference in New York. "Our perspective…is informed by where we sit in the landscape." While some shows are best positioned to succeed on traditional TV platforms, others work better for SVOD services, he explained.

In terms of the direct-to-consumer business, "we are working on our plans there," as "we want to be where consumers are, and we want to make sure content we create is best monetized for us," he said without disclosing details. But he said that "some form of direct-to-consumer we think will make sense for us." He added, though: "It is not going to be a strategy that's just 'Let's go copy what Netflix has done.' Our model will...take advantage of all that we are good at."

So overall, Comcast's own direct-to-consumer business will be just one way for the company to participate in various opportunities across the industry, he emphasized.

Will Comcast sell its 30 percent stake in Hulu when Walt Disney gets a 60 percent stake after closing its acquisition of 21st Century Fox? Cavanagh said he had no news on that front. “We have and want to continue to have a healthy relationship with Hulu," he said, explaining that some of the company's content has "a great home on that platform."

Comcast recently closed its $39 billion deal for European pay TV giant Sky after outbidding Walt Disney-backed 21st Century Fox, which then sold its 39 percent in Sky to Comcast.

Comcast management has said that Sky gives the company a platform to grow its international business and adds a third leg to its U.S. cable operations and NBCUniversal content arm. 

Cavanagh reiterated the upside Comcast sees for Sky, lauding its strong brand and management. "Sky is unique," he said. "There wasn’t another Sky out there. There isn’t another Sky out there." 

Sky will remain an autonomous part of Comcast and get the U.S. cable giant's financial support to accelerate its growth, Comcast chairman and CEO Brian Roberts said in London last month as top executives met the latest addition to the company and showed off a special welcome video from Jimmy Fallon.

Speaking during an hour-long town hall meeting with Sky staff at the European pay TV giant's headquarters in West London's Osterley neighborhood, Roberts, Sky CEO Jeremy Darroch, NBCUniversal CEO Steve Burke and Cavanagh lauded the mega-deal for Sky and the opportunities it creates.

Asked about the pay TV sector and competition for subscribers in the age of cord-cutting and streaming services, Cavanagh on Tuesday said that the video business remains "important" to Comcast, but not important enough to chase unprofitable subscribers.

The Comcast CFO also touted the theme parks business, including a park set to open in Beijing with local partners in 2020.