‘Peacock’, a new streaming service from Comcast’s NBCUniversal, goes live today in the USA for subscribers to Comcast’s Xfinity TV and internet bundles. Peacock is entering an increasingly crowded market for streaming services, launching just over a week after mobile-first offering Quibi, and just before WarnerMedia’s HBO Max, set to debut next month. But while many of its competitors are offering paid, ad-free subscription models, Peacock is betting on ads. Peacock is completely free for Xfinity customers, relying entirely on ad revenues for monetisation – though the service will release a paid subscription tier for people not subscribed to Comcast later in the year.
Peacock will have a strong content library. NBCUniversal has paid large sums to hold exclusive streaming rights to a number of shows originally aired on its networks. The most notable of these is the US edition of ‘The Office’, which NBCU paid $500 million to pull from Netflix on to its own service. Though the series ended in 2013, it continues to be a major draw for audiences. Nielsen data compiled for the Wall Street Journal found it to be Netflix’s most popular show, beating out all of Netflix’s expensively assembled originals.
Beyond The Office, Peacock will host popular shows including ‘Parks and Recreation,’ ‘Brooklyn Nine-Nine,’ ‘Downton Abbey,’ ‘Frasier,’ ‘House,’ and ‘Saturday Night Live’, and films from NBCU-owned Universal Studios including ‘E.T. The Extra Terrestrial,’ ‘Jaws,’ ‘Shrek,’ ‘Back to the Future,’ and the ‘Bourne’ and ‘Fast & Furious’ franchises.
Peacock will also show original content, including an adaption of ‘Brave New World’ and a reboot of ‘Battlestar Galactica’, though these series won’t be available at launch.
Tal Chalozin, co-founder and CTO at ad tech company Innovid, believes the depth of its library will help Peacock establish itself. “The streaming world is obviously a very crowded space but NBC’s Peacock has the advantage of being an already established brand and launching with a very strong content library that already has brand recognition, positioning them for success from the outset,” he said.
But while Peacock’s library of content looks strong, the launch has been hindered by the coronavirus pandemic. Peacock will broadcast live sports, and was set to air coverage of the Summer Olympic Games, which NBCUniversal holds broadcasting rights for in the US. NBCUniversal CEO Steve Burke said before the outbreak that the Olympics would act as an “afterburner” for Peacock after its initial launch. But with the Olympics now postponed until 2021, and other sports set to be aired on Peacock put on hold, the service will have to win over customers without its sports offering.
While the next few weeks will tell if Peacock can win over audiences, it seems to have been successful so far in wooing advertisers. NBCU earlier this week announced its lineup of launch sponsors, which include Unilever, Target, State Farms, Capital One, L’Oreal USA, and Verizon.
While most of the major streaming services released so far have steered clear of advertising, NBCUniversal hopes that it can win over audiences by offering a more palatable ad experience than that found on traditional TV. The ad load will be lower than on linear broadcast, at just five minutes per hour. But Peacock hopes to attract higher prices for its inventory by offering newer, more interactive formats. These include shoppable ads, which can lead audiences direct to an e-commerce page via a QR code, and solo ads, where a brand effectively pays to sponsor an episode of a show, with their being the only ad shown to the customer.
These newer ad products could prove more appealing to advertisers too. “Peacock’s dynamic platform will enable us to look beyond traditional 15 and 30 second video formats and collaborate with an industry leader who is committed to building a best-in-class content experience,” said Gretchen Saegh-Fleming, CMO at L’Oreal USA.
It will be interesting to see whether Peacock’s bet on advertising over subscriptions pays off. The coronavirus pandemic could result in increased demand for free ad-supported streaming. As Parks Associates analyst Steve Nason told VAN, paid streaming services could see increased churn, as consumers tighten their belts due to difficult economic circumstances.
“During the stay-home mandate, one of the strongest data trends that Innovid has seen is the growth of ‘broadcast and cable’ content vs. other video content such as social video or long tail video,” said Innovid’s Chalozin. “As of last week, broadcast publishers had the highest volume growth in CTV ad impressions representing a 6 percent increase. Peacock is positioned amazingly well to capitalise on this trend.”