Comcast Corp. president says the longer strikes go on ‘the worse it will be’

Comcast Corp. said Thursday that strikes by Hollywood writers and actors will have a negative but manageable impact, emphasizing that the effects will hit the industry as a whole.

“It’s a level playing field” between competitors on the television and film producers’ side, Comcast Corp. president Mike Cavanagh said.

On its second-quarter 2023 earnings call Thursday morning, Comcast leadership noted the strikes by actors union SAG-AFTRA and the Writers Guild of America, among other continuing challenges posed by “cord cutting and new competitors, particularly from the technology sector.”

NBC Universal, a Comcast subsidiary, is a member of the Alliance of Motion Picture and Television Producers (AMPTP), the body that negotiates contracts with the unionized writers and actors. NBC Universal’s brands include DreamWorks, SyFy, Bravo and Focus Features, as well as NBC, Universal and streaming service Peacock.

Peacock’s paid subscribers increased from 22 million to 24 million within the second quarter. A major factor in that increase was due to the company removing free Peacock subscriptions for their cable subscribers, Cavanagh said, some of whom converted to paid plans.

Total Peacock subscribers almost doubled from 2022 to 2023, and revenue from the streaming service increased by 85% to $820 million for the second quarter, the company said. Still, Peacock was not profitable in the second quarter, posting a $651 million loss, and Comcast made note of increased programming costs for the streaming service.

A week ago, members of SAG-AFTRA and the Writers Guild rallied in LOVE Park, two blocks from Comcast’s Philadelphia headquarters. SAG-AFTRA members at the rally emphasized that most of their ranks make a middle-class living or less for their acting work. They expressed frustration with how the streaming business model is affecting their pay and worries about the use of artificial intelligence by studios and its impact on their work and compensation.

Cavanagh said the company is “committed to reaching a fair deal with the guilds as soon as possible.”

In response to an analyst’s question of whether the strikes will have an effect on Peacock’s future profitability, Cavanagh said the strikes would have a negative impact, but “it’s really for all involved in the industry broadly — a prolonged work stoppage — and the longer it goes, the worse it will be.”

He added that Peacock has “a lot of strong content coming” in the second half of 2023.

Overall, Comcast saw revenue growth of 1.7% compared to the second quarter of 2022. The connectivity and platforms businesses, which include Xfinity and Comcast Business, saw flat revenue year-to-year, as total customers decreased by 228,000, to 52.3 million.

In the content and experiences division, Comcast saw a 4% increase in revenue thanks in large part to its theme parks, where revenue increased by 22.4%.

Cavanagh touted the release of The Super Mario Brothers Movie in June, which contributed to a 65.9% increase in theatrical revenue year-over-year. He also noted the release of Christopher Nolan’s Oppenheimer last week, which saw more than $200 million at the box office in its first five days, but that was not in the second quarter.

Despite the increase in theatrical revenue, Comcast’s studios division, which also includes content licensing, saw flat revenue year-over-year. But the division saw an increase in profits thanks to lower programming and production expenses, the company said.