Comcast’s revenue from Sky
Comcast’s (CMCSA) revenue rose 26.1% YoY (year-over-year) to $27.85 billion in the fourth quarter, during which both its Cable Communications and NBCUniversal segments performed well. About $5.0 billion in revenue also came from the London-based pay-TV group Sky, which Comcast acquired in October 2018 after beating out 21st Century Fox and the Walt Disney Company (DIS). Excluding the impact of foreign currency, Sky’s revenue rose 5.6% YoY in the fourth quarter driven by higher direct-to-consumer content and advertising revenue.
Sky’s sports programming rights in Italy and Germany, the increased penetration of its premium sports and movie channels on third-party pay-TV networks in the United Kingdom (EWU), and its monetization of its list of original programming have enriched Comcast’s content portfolio. Sky added net 735,000 customers in each of its territories in 2018, bringing its total number of customer relationships to nearly 24 million. Comcast’s focus on Sky has led Macquarie to upgrade its rating on the stock to an “outperform” from a “neutral.”
Comcast’s purchase of London’s leading broadcaster, Sky, was vital for Comcast for its global expansion and to help it compete with digital rivals such as Netflix (NFLX), Amazon (AMZN), AT&T’s (T) HBO Now, and others, which are attracting traditional cable subscribers with lower video entertainment prices. Along with these existing players, new players such as Disney and AT&T’s WarnerMedia are also planning on launching their streaming services in late 2019. Apple’s video streaming service is also expected to launch in the fall.
Sky’s video streaming business, Now TV, will support Comcast in its competition with Netflix across the globe. Comcast’s NBCUniversal will also debut its streaming initiative in early 2020.