Comcast has announced a major shift in its business strategy, opting to spin off several of its traditional cable television networks as more viewers abandon cable subscriptions in favor of streaming services. This change comes as a response to the growing trend of cord-cutting, with millions of Americans opting for digital platforms for their entertainment needs.
The cable networks affected by this decision include former flagship channels such as USA, Oxygen, E!, SYFY, Golf Channel, CNBC, and MSNBC. In addition, the movie ticketing service Fandango and the popular movie review site Rotten Tomatoes will become part of the newly formed entity. However, Comcast’s streaming service, Peacock, along with Bravo, which produces essential content for Peacock, will remain under Comcast’s ownership.
According to market research firm eMarketer, the number of cable subscribers is projected to decline sharply, with an estimated 160 million households expected to switch to streaming services by 2028, up from 124 million this year. This shift indicates a significant transformation in how consumers engage with media.
“Like many consumers, Comcast has effectively ‘cut the cord’ by divesting a large portion of its cable TV properties,” remarked Paul Verna, principal analyst at eMarketer. He noted that this strategic move allows Comcast to focus on more lucrative ventures, such as its broadband internet service, theme parks, and streaming services.
Comcast’s decision to spin off these assets was hinted at during the release of its quarterly earnings report last month. The company confirmed that it would be separating these channels, which generated approximately $7 billion in revenue over the past year, accounting for about 5.5% of its total revenue for the same period.
The newly independent company will be led by Mark Lazarus, the current chairman of NBCUniversal Media Group, who will assume the role of CEO. Anand Kini, the present CFO of NBCUniversal, will become the CFO and COO of the new entity. Lazarus expressed confidence that the newly formed company will be better equipped to meet audience demands and enhance shareholder value, despite the challenges posed by declining cable subscriptions and advertising revenue.
Comcast anticipates that the spin-off will provide the new company with the financial agility needed to pursue partnerships and acquisitions in the media sector. However, the success of the spin-off remains uncertain given the current landscape of dwindling cable subscribers and advertising revenue.
In recent years, Comcast has shifted its focus away from traditional cable and toward more profitable endeavors, including its theme parks and the Peacock streaming service. The company reported a remarkable increase in Peacock’s subscribers in the last quarter, gaining 3 million additional users for a total of 36 million, with revenue growing by 82% to reach $1.5 billion.
Peacock, launched in 2020, has seen significant growth, particularly during high-profile events such as the 2024 Paris Olympic Games, where the platform streamed over 329 medal events and more than 5,000 hours of coverage, attracting an astounding 23 billion minutes of viewing time—an increase of 40% compared to all previous Olympics combined.
Comcast’s financial performance remains strong, reporting revenue exceeding $32 billion and a profit of $1.12 per share in its most recent quarter, bolstered by the success of the summer blockbuster “Despicable Me 4,” which grossed over $1 billion globally. Looking ahead, Comcast is also set to open the Epic Universe theme park in Orlando next May.
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This report includes contributions from AP Business Reporter Wyatte Grantham-Philips in New York City.
