Here at the cusp of February, the Peacock streaming service faces what is almost certainly the most important month in its brief history. And it might also be one of the most pivotal in the history of Peacock’s far older parent companies, NBCUniversal and Comcast.
Also read: Peacock Expenses Drag Down 4Q Profits at NBCUniversal
In case you’ve somehow missed the dinosaurs on the ski slope, the endless football promos, or the recent blizzard of NBCUniversal announcements on its programming, spending, advertising, and streaming plans, there’s a lot going on:
> The Winter Olympics in Beijing start this week (luge and curling on Wednesday!), just seven months after the pandemic-delayed Tokyo Games unfolded as the least-watched Olympics ever. This time around, covering the Games’ 19 days should be even more challenging for NBCUniversal, which is spending billions of dollars to carry the Olympics through 2032. The games are again on the opposite side of the planet, meaning lots of delayed programming, spoiler social-media posts, and pre-dawn live viewing. For further complications, add in Olympics fatigue, blowback over the repressive Chinese government’s many outrages, a resurgent pandemic, and a possible Ukrainian invasion by Chinese vassal state Russia (though China reportedly has asked Vladimir Putin to hold off during the games). Peacock, meanwhile, will show every minute of every event, but only to viewers who pay up for the premium tiers.
> In the middle weekend of the Olympics, the NFL’s Super Bowl will run on both NBC and Peacock. NBC’s prime-time Olympics host Mike Tirico will fly back from Beijing for the game in Los Angeles, continue some long-distance Olympic hosting, then head back to China. The Big Game’s viewership isn’t what it once was; an average 91 million people watched in 2021, down 9.5% from the previous year and even more compared to the previous decade. Ratings were the lowest since the third year of a 56-year-old competition. On the other hand, in the cord-cutting era, the Super Bowl remains by far the most-watched show on traditional television, and NFL games comprised 75 of the 100 shows on TV in 2021. Streaming the game on Peacock should allow for some interesting additional fan experiences and advertiser gimmicks, deep viewer data, and possibly additional viewership for those advertisers paying a record $6.5 million for 30 seconds of time.
> At Comcast’s earnings call last week, the company said it will spend a lot more on original content for Peacock, doubling to $3 billion this year and as much as $5 billion “soon.” That’s a big bump for a service whose list of originals was markedly sparse even after pandemic production halts eased. But it’s still far less than the competition. Netflix likely will spend $19 billion, and Disney will spend $33 billion for all its many outlets. Most other big competitors are spending at least $6 billion. Content spending in general is expected to top $230 billion this year, up $10 billion from 2021, almost all of it from streaming services, according to a recent study.
> Peacock so far has been a big money loser, with Year 2 losses doubling to $1.7 billion on $778 million in revenue. This year, the company projected losses will jump again, to $2.5 billion. At least the sharply rising costs are a result of Comcast’s decision to spend more on programming, an investment with hope for a return on long-term viewership.
> The lack of reasons to watch Peacock so far has translated into, not surprisingly, not many people watching Peacock. The service’s premium tiers have only 9 million of its 24 million subscribers, the company said during that earnings call. That compares poorly not just to Netflix, Hulu, Amazon Prime and Disney Plus, but even to HBO Max, which debuted within a few weeks of Peacock nearly two years ago, and had the same bumpy initial reception from viewers and Roku. Even year-old Paramount Plus is perking up, and it’s not just thanks to yet another Star Trek series.
So, February is a chance for NBCU and Peacock to strut their stuff, attracting hard-core football and Olympics fans, promoting other programming, and potentially building viewership habits that in turn translates to paying subscribers.
And there are reasons for hope. Peacock was the second-most-popular service in terms of signups last quarter, up 3 percentage points to 12% market penetration, according to a recent Kantar report.
Also read: Has Peacock Found Momentum? It Was No. 2 in Signups for Q4
More than half signed up for Peacock’s free version, which may be the service’s secret weapon. The potential for upselling to Peacock’s ad-supported Premium ($4.99/ month) and mostly ad-free Premium Plus ($9.99) tiers is huge. Upsells and retention likely will be Job One for the service this year
Also encouraging: the percentage of subscribers saying they plan to cancel was down to a very good 5.5%, from Q3’s ugly 3.3% rate. It’ll be interesting to see what the churn numbers are a couple of months after the Olympics close, but for now, the company has plenty of opportunity.
Spending more on Peacock marks a big shift in thinking at Comcast, which has been running the service more as a way to avoid losses than to make money. Comcast has plenty else on its plate, navigating the shift from legacy broadcast, cable, satellite, and theatrical distribution to the streaming future. But taking care of the future along the way matters too.
The company’s late arrival to the content-spending dance means it has some ground to make up. Splashy new shows will be needed, like the just-announced supernatural drama Dead Day, from The Vampire Diaries producers Kevin Williamson (Scream, Dawson’s Creek) and Julie Plec (The Originals, The Following). Peacock gave the comic-book adaptation a straight-to-series order, the kind of decisive, high-profile move the Bird will need flocks of as it goes forward.
Now to see if the Super Bowl, the Olympics, and more shows such as Dead Day can give Peacock a more sustained and lively future.
