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Comcast Plans To Double Spending on Movies, TV Shows, Adding to Already Surging Studio Property Dema

Tech Giant To Spend More Than $3 Billion, up From About $1.5 Billion Last Year

By Lou Hirsh CoStar News January 27, 2022 | 4:27 P.M.

Media and technology giant Comcast plans to double spending this year on movies and TV shows for Peacock, one of several streaming services that's fueling escalating demand for soundstages and production offices across Los Angeles and other parts of the country.

The Philadelphia-based company told analysts and investors it expects to spend more than $3 billion, up from about $1.5 billion last year, with the goal to reach $5 billion in annual content spending within about two years. Peacock launched in July 2020 and had 24.5 million subscribers at the end of 2021, still well behind competing services from media giants including Disney and Warner Media.

More media production from Comcast’s NBC Universal division, which includes Peacock, is expected to add to an already crowded space-usage climate in entertainment centers such as Los Angeles. Soundstages in the L.A. region have consistently been about 95% occupied for the past five years and production schedules have essentially returned to pre-pandemic pacing, according to FilmLA, which tracks film permitting and related trends.

The news comes as multiple developers have projects in the works that are expected to add dozens of soundstages in coming years as Los Angeles competes with other regions in the U.S. and Canada that are also looking to boost their foothold in media production fueled largely by streaming demand. Comcast said its revenue, derived mostly from cable TV and telecommunications systems, rose 9.5% to $30.3 billion in the fourth quarter as net income fell 9.6% to $3.1 billion.

"When we introduced Peacock to you back in early 2020, our vision was to launch a streaming service that offers premium content and is supported primarily by advertising," CEO Brian Roberts told analysts during a fourth-quarter earnings call Thursday. "What we’ve learned so far is that we started with the right business model. With over 300 million hours of content consumed on Peacock per month, the engagement with our platform has proven extremely valuable to advertisers."

The company also said visitors at Universal theme parks in Florida and California, traditionally big traffic generators for neighboring retailers and hotels, returned faster than expected after pandemic restrictions were eased. Executives said its NBCUniversal division plans to open new attractions at its Universal Studios theme parks in L.A. and Orlando, Florida.

“At our U.S. parks, we benefited from strong domestic attendance and per-capita spending that were above pre-pandemic levels,” Mike Cavanagh, Comcast's chief financial officer, said during the call. Domestic visitors are returning to those parks at a faster pace than anticipated, with the Florida park in particular showing no major effects from the latest nationwide outbreaks of the COVID-19 omicron variant.

However, international visitors have yet to return in full force to U.S. parks because of air travel restrictions lingering in many countries.

“For total theme parks, while we have been very pleased by the pace of our recovery, particularly in the U.S., we recognize that the business is subject to variability because of the pandemic, which tends to be more pronounced at our international parks,” Cavanagh said. Capacity restrictions at Universal parks in China and Japan remain tighter than for those in the U.S.

The rebound comes after consulting firm International Theme Park Services estimated the theme park industry lost $20 billion in 2020 because of the pandemic and projected that attendance may not return fully to pre-pandemic levels until at least 2023.

Comcast executives said the theme parks division posted record earnings before interest, taxes, depreciation and amortization of $674 million for the fourth quarter ended Dec. 31, compared with $3 million in the year-earlier period, when tight pandemic capacity and other restrictions remained in place. Theme park revenue reached $1.9 billion for the quarter, up from $648 million in the year-earlier period.

Comcast does not report attendance numbers for its parks, but the Themed Entertainment Association trade group reported that NBCUniversal was the world’s fourth-largest park operator in 2019, drawing more than 51 million visitors. That included more than 21 million in Orlando and 9 million in Los Angeles, many of them also visiting local hotels, stores, restaurants and other businesses.

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