Comcast reportedly mulls billion dollar cut to TV budgets amid Hollywood reckoning
Comcast (CMCSA) is looking to slash as much as $1 billion from its TV network budget, according to a new Bloomberg report.
The outlet noted funds will be reallocated to boost other areas of the media giant's business, such as its struggling streaming platform, Peacock, which failed to add any new subscribers in its most recent quarter.
Executives are reportedly weighing other cost-cutting measures like layoffs and trimming new program budgets, as well. No decisions have been finalized at this point.
Yahoo Finance reached out to Comcast for comment but did not immediately hear back.
The news comes as legacy media companies aggressively cut costs in order to reach profitability after years of emphasizing subscriber growth above all else.
Warner Bros. Discovery (WBD), for example, has scrapped multiple projects and eliminated thousands of workers in order to slash $3 billion worth of costs over the next two years. It plans to distribute those savings into streaming content.
Other platforms have also explored various distribution and pricing models in order to diversify audiences and offset shrinking growth, notably through ads.
Netflix (NFLX) and Disney (DIS) are the latest platforms to hop on the ad-tier bandwagon, with the latter aiming to officially launch its ad option on December 8. Netflix this week announced two senior hires in its own efforts to roll out an ad-supported tier next year.
Apple TV+ (AAPL) is also rumored to be exploring an ad-supported alternative, while Warner Bros. Discovery revealed it will have three tiers when the combined HBO Max-Discovery+ platform debuts next summer.
Peacock's mere 13 million subscribers are a a disappointment to industry watchers, especially considering NBCUniversal's powerhouse stake in entertainment.
Still, NBCUniversal has remained confident in the future of Peacock, doubling down on the opportunity in advertising and new ad formats during its NewFronts presentation in May.
On July's earnings call, the company reiterated that, although there is "choppiness" in the ad market at large, the increased streaming competition and upcoming ad-supported rollouts validate Peacock's three-tiered pricing model.
"As far as advertising in general, both linear and Peacock, we’re one of the largest advertisers out there, with over $10 billion of advertising," CEO Jeff Shell said.
Adding: "We had the benefit of studying the market before we came in and we think we picked the right business strategy, which is kind of an extension of our existing business, not a new business, but based on a dual revenue stream of subscription and advertising."
Peacock's EBITDA losses widened to $467 million in the second quarter, while the company's broadband subscriber count remained flat. Comcast shares are down roughly 27% year-to-date.
Alexandra is a Senior Entertainment and Food Reporter at Yahoo Finance. Follow her on Twitter @alliecanal8193 and email her at alexandra.canal@yahoofinance.com
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