Comcast CFO Mike Cavanagh told investors during the Credit Suisse Virtual Communications Conference to expect continued losses, following 409,000 video subscriber losses in the first quarter, more than four times more losses than the same quarter last year, according to Multichannel News.
Cavanagh said that, while the company is eager for theaters to reopen, their premium video on-demand (PVOD) distribution model may permanently change for "certain types of titles," Deadline reported. "Theaters will reopen after states and markets reopen," Cavanagh said. "[Meanwhile], there is likely ... a constructive way to make [things] work for consumers and, economically, for all players in the ecosystem."
Cavanagh expressed optimism about next month's national launch of streaming service, Peacock. He said the product’s April soft launch exceeded expectations "a bit," according to Multichannel News. Cavanagh said he expects Peacock to take off later this year and next year, once it adds prime programming such as The Office, the Summer Olympics, and the NFL championship game.
Shuttered movie theaters are proving dire for media and telecommunications companies who banked on already-produced summer blockbusters. On an earnings call last week, AMC Entertainment executives threatened to refuse showing Universal Studio films when it reopens, according to Deadline. "We'll see how it all shakes out," AMC CEO Adam Aron said on a call last week, per Deadline. "This is just an issue about money."
"Right now, the focus is on how to get theaters back open. But until then, it is a film-by-film issue," Cavanagh said on the Tuesday webcast. "What to do with films that are ready to go, and the ones that are not yet produced, to figure out when you can get them back into theaters?"
Cavanagh said Comcast also has its hands full plotting the reopenings of Universal Studios theme parks, which are experiencing some of the conglomerate’s largest losses. Despite Japan and Orlando parks reopening, and Universal Studios Hollywood slated to open in July, Cavanagh said Comcast still expects to lose $500 million.
Even now that Universal Orlando theme parks have opened, parent company Comcast isn't expecting a significant improvement on that loss, the Orlando Sentinel wrote. "It should be around that, or a touch inside ... won't be worse," Cavanagh said, warning the parks, which are limiting entry, would need to generate 20% to 30% of its standard attendance in order to break even for the quarter.
Then, he said, "the $500 million becomes zero. We're not there yet; it's early days. More to come when we report second quarter earnings on parks."
He is also optimistic about Comcast's broadband service, Flex, which lets customers connect to larger streaming services including Netflix, Hulu and Prime Video.
"The point is to add to the customer experience, help reduce churn overall on the broadband product, and cement a deeper relationship," Cavanagh said, per Multichannel News. "Part of the shift to connectivity has been integrating Netflix, Hulu, Prime and others, because that [creates] better customer experience, and we have the technology that allows for that to happen."