CMCSA Comcast Corporation

By Patience Haggin and Sahil Patel 

Comcast Corp. is in advanced talks to acquire video-streaming company Xumo LLC, according to people familiar with the matter, as the cable giant prepares to launch its own streaming service.

Talks between the two companies are exclusive, and it is possible that negotiations could break down, some of the people said. Financial terms of the prospective deal couldn't be learned.

Xumo is one of a handful of companies that offer a free, ad-supported video-streaming service across a range of internet-connected TVs. Others include ViacomCBS-owned Pluto TV, which was acquired for $340 million in January, and Tubi TV.

Irvine, Calif.-based Xumo TV was formed in 2011 by Viant Technology LLC, which was then known as Interactive Media Holdings. One of Xumo's shareholders is magazine and TV company Meredith Corp. Xumo's app is available on services including Roku and on smart TVs from manufacturers such as Vizio, Panasonic and Samsung.

The potential acquisition would come as Comcast's NBCUniversal prepares to launch its streaming service, Peacock, in April. Xumo could provide technical and business support for Comcast's streaming efforts across its pay-TV service, Xfinity, Peacock and European pay-TV giant Sky, which Comcast acquired last year, some of the people said.

Xumo also powers free, ad-supported streaming services from other companies. It is used by LG Electronics Inc. for its free video product LG Channels. Xumo also repackages traditional TV content into new digital channels, a capacity that some traditional TV programmers have used as they transition to video streaming.

Comcast has said that Peacock, which will have a library of original content and classic shows such as "The Office," would rely heavily on advertising rather than subscriptions.

Comcast Chief Financial Officer Michael Cavanagh said at a recent conference that the company sees an opportunity for additional advertising-supported services as the market becomes saturated with more subscription-based streaming services on top of traditional pay-TV.

Comcast has said subscribers would receive Peacock free, and the company is working to reach deals with other cable providers that would allow it to be free to pay-TV subscribers. The company is also considering offering different subscription tiers.

Like its rivals, Comcast has been losing pay-TV customers as more consumers opt to cut the cord and subscribe to streaming services and web-based live-TV bundles. In addition to Peacock, earlier this year the company entered the streaming hardware game with its Flex device, which it decided to make available free to all of its broadband-only customers.

Lillian Rizzo and Benjamin Mullin contributed to this article.

Write to Patience Haggin at patience.haggin@wsj.com

(END) Dow Jones Newswires

December 26, 2019 17:36 ET (22:36 GMT)

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