Peacock has a Different Streaming Strategy
The last major streaming service is competing on its own terms
Today, media conglomerate Comcast NBCUniversal officially launched Peacock, the last major streaming service expected to enter “the streaming wars.” Following recent launches of HBOMax, Disney+, and Apple TV+, many are questioning whether there’s room for yet another streaming service. Peacock, however, is competing on its own terms — leaning into Comcast NBCUniversal’s strengths, instead of following the philosophy and strategies of streamers before it.
When it comes to content strategy in the streaming era, there are conventionally two different types of content used to acquire and retain customers. For customer acquisition, streamers have relied on flashy, big-budget, original serialized drama series like House of Cards (Netflix), The Mandalorian (Disney+), or The Morning Show (Apple TV+), the two latter which each reportedly cost $15 million per episode.
The second bucket of content in the streaming era is a large catalog of series with high volumes of episodes that are infinitely re-watchable, like sitcoms or broadcast dramas with hundreds of episodes. After new subscribers finish the big flashy new series, they stick around because they can watch The Office or Friends endlessly as comfort-TV, often passively with the shows on “in the background.” This is the content that subscribers stick around for — a lesson Apple undoubtedly learned when The Morning Show ended and Apple TV+ didn’t have the volume of content to keep viewers around.
NBCUniversal, which owns networks such as NBC (obviously), Bravo, E!, and Syfy, has never been particularly strong at producing big-budget, serialized drama series, but outperforms in reality TV fare (Real Housewives, Keeping up with the Kardashians), late night (Late Night with Seth Myers, SNL, The Tonight Show with Jimmy Fallon), sitcoms (The Office, 30 Rock, Parks & Rec, Brooklyn Nine-Nine), and long-running broadcast dramas (Law & Order, Chicago Fire/P.D./Med, Parenthood). This is the content that falls into the “infinitely re-watchable, high-episode volume” bucket that keeps viewers sticking around.
Peacock has fully leaned into this category of comfort-TV and guilty-pleasure content that it excels at. Instead of spending $15 million per episode on a splashy new series with 8–10 episodes and praying that it works, Peacock is even spending money to license library sitcoms and procedural dramas from other studios, including Everybody Loves Raymond from ViacomCBS and Two and a Half Men from Warner Bros. While the service has invested in a few new original series, like Brave New World, a new version of Battlestar Galactica, and Dr. Death, it is clear based on their budgets and (lack of) marketing that these originals are not the main value proposition that they’re selling to consumers.
If Peacock is less focused on big-budget series typically used for customer acquisition, how does it plan to acquire new subscribers? Well, one answer is the price: free. Anyone can subscribe to a basic ad-supported version of Peacock for free, or upgrade to Peacock Premium (which has more content, but still contains ads), or Peacock Premium without ads. This ad-supported model is once again leaning into Comcast NBCUniversal’s strengths as a cable provider and owner of a broad portfolio of networks, which are dependent on advertising revenue streams. The company recently merged its TV and digital ad-buying platform, and owning direct relationships (and data) with consumers outside of Comcast’s internet and cable businesses will make its advertising business more effective and attractive to advertisers.
One of the more interesting “innovations” of Peacock is that it is the first major streamer to utilize linear feeds of content (a.k.a. channels), although it will not be the last. Peacock’s content library strengths are the sitcoms and reality-TV that viewers are fine tuning into in the middle of an episode and watching passively, and sometimes actually prefer over having to choose the specific episode that they want to watch, and viewing it from start to finish on services like Netflix. Peacock’s feeds remove this paradox of choice, eliminating friction between opening the app and finding something to watch.
While Peacock won’t get the record launch day pop of Disney+, when consumers do show up, there’s enough content to keep them watching. The company had planned to rely on the 2020 Summer Olympics to drive additional attention and subscribers, but had to make do without the huge promotional opportunity since it has been rescheduled to 2021. Peacock’s largest customer acquisition event after launch will likely be in January 2021, when The Office leaves Netflix and is exclusively available on Peacock.
Peacock seems to recognize that building a sustainable streaming business is a marathon, not a sprint. A big launch doesn’t mean much if you don’t have the quality and volume of content that keeps viewers watching (eh hem, Apple). Of all the streamers, Peacock most closely resembles traditional TV, from it’s ad-supported model, to linear feed feature, and deep catalog of content with high-volumes of episodes that consumers enjoy watching over-and-over like The Office, 30 Rock, Parks & Rec, Below Deck, and Real Housewives. It’s exactly the streaming service you’d expect a cable provider to create, and that’s surprisingly, not a bad thing.