Sky will look to accelerate take-up of Sky Q and roll out broadband in Italy to drive growth this year after a tough quarter that saw it grow its customer relationship base across Europe by 77,000 to 24 million and increase its revenue by a modest 1.4% at constant currency to US$5.04 billion on lower advertising spend, while EBITDA flatlined at US$765 million.
Parent company Comcast meanwhile posted strong overall results for the quarter, with strong broadband cable growth in the US contributing to 2% growth in revenue to US$28.4 billion and 3% growth in adjusted EBITDA to US$8.4 billion. CEO Brian Roberts identified broadband and a focus on streaming – notably the launch of Peacock – and content aggregation – through Sky Q in Europe – as engines of future growth.
Roberts said that Peacock would be “a fantastic product for consumers and advertisers alike and a new channel to better monetize our content” that would enable Comcast to capture 100% of ad revenue from non-linear viewing of its content.
For Sky, Q4 growth in direct-to-consumer and content revenue was offset by a decline in advertising. Comcast CFO Mike Cavanagh said that advertising revenues had been hit by “continued macro weakness” as well as changes to the regulation of gambling advertising in the UK and Italy.
Roberts told analysts that Comcast was now “accelerating the deployment of Sky Q to get to X1-like levels of penetration as quickly as possible”, referring to Comcast’s flagship US TV set-top.
The latter was last year used to launch new service Flex to serve US broadband customers that prefer streaming-only TV services. Comcast’s Cavanagh said in the earnings call that the combination of broadband, Flex and streaming service Peacock meant that Comcast was “ better positioned as the world moves to streaming than any other company in the world”.
In relation to Sky, during the earnings call Dave Watson said that Comcast wanted to invest in dirving increased penetration of Sky Q – “the best TV service in Europe” – and the rollout of broadband in Italy, which he said was “a big new adjacent category [of service] for us”.
Watson said that Comcast’s aim was to “keep our foot on the gas and accelerate these investments” even at a time when “many in Europe are probably being more cautious” because of macroeconomic concerns.
NBCUniversal, Comcast’s content arm, meanwhile reported revenues of US$9.2 billion for the quarter, down 2.6%, and adjusted EBITDA of US$2.02 billion, down 4.7%. NBCUniversal’s filmed entertainment business had a particularly tough quarter, with box office revenue from Catsfailing to replicate the success in the prior-year quarter of Dr Seuss’ The Grinchand Halloween.
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