Comcast (CMCSA - Free Report) recently announced that it has entered into a long term-agreement with Lionsgate Films (LGF.A - Free Report) .
Per the new deal, Lionsgate owned Starz network channels, which include STARZ premium channel as well as STARZ Encore channels, will continue to be available on Comcast NBCUniversal’s Xfinity TV platform with expanded distribution on the Comcast Flex platform.
The deal also allows NBCUniversal to license content from Lionsgate for Peacock, its upcoming streaming service set to be launched in April 2020.
Conversely, NBCUniversal will license content to Starz to be featured in the United States and on its international streaming service, STARZPLAY.
Portfolio Strength to Aid Subscriber Growth
This partnership is in line with Comcast’s focus on providing its customers with superior content offerings. The move is expected to aid the company in acquiring new video subscribers and retain its existing ones.
Notably, the company lost 224K video customers in third-quarter 2019.
Moreover, Peacock will now have access to Lionsgate’s catalog of critically and commercially successful feature films and shows along with original series, TV shows, and films from Universal and other major studios.
Peacock’s expanding content portfolio will improve Comcast’s foothold in the rapidly growing streaming market, which, per Grand View Research, is expected to witness CAGR of 19.6% between 2019 and 2025.
Currently. the market is dominated by the likes of Netflix (NFLX - Free Report) and Amazon’s (AMZN - Free Report) prime video. Per eMarketer, Netflix and Amazon are expected to have 158.8 million and 96.5 million viewers, respectively, by the end of 2019.
Moreover, the streaming landscape has become very crowded with the launch of Disney’s Disney+ and Apple’s Apple TV+ in November, with AT&T’s HBO Max set to debut next year.
High-Speed Internet User Growth Aids Comcast
Comcast is benefiting from solid growth in a number of residential and business services high-speed Internet customers. The company’s strategy of providing high-speed Internet at an affordable cost plays a key role in improving customer experience.
Moreover, growing popularity of Xfinity products is a key catalyst. At the end of the third quarter, 65.6% of Comcast’s residential customers received at least two Xfinity products.
Additionally, expansion in wireless user base and security and automation services customer base is a growth driver. Furthermore, Sky’s content strength is expected to drive the subscriber base in Europe.
CMCSA currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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