Comcast’s NBCUniversal is struggling to grow its streaming service Peacock. Only 11.3 million US households regularly watch it, far fewer than those who use competing services, according to internal NBCU information seen by The Information. It’s looking to bolster its offerings with deals with other entertainment companies, people familiar with the situation say.
In a discussion of the streaming service’s performance during a third-quarter earnings call, NBCU CEO Jeff Shell cited some notable moves. For one, it is attracting new subscribers via cable and broadband bundles — the same bundles that have been the source of a massive loss for Comcast — including by promoting its Peacock Premium tier to those packages’ customers. This enables those viewers to pay for ad-supported viewing, and the service has been able to raise average revenue per user, or ARPU, to $10.
The company also added two new members to its leadership team. Streaming vets Shannon Willett was promoted to chief marketing officer and Brian Henderson was elevated as executive vice president of programming. Both new hires were tasked with driving the company’s growth strategy while continuing to maintain a high standard of work.
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Comcast’s NBCU subsidiary is focusing on Peacock to drive broader content growth, but the streaming service is not expected to be profitable until at least 2024, according to an updated strategic plan laid out by NBCU and Comcast executives during a Wednesday morning analyst call. Shell said on the call that the NBCU streaming platform is way ahead of expectations and will continue to grow.
Peacock has a paid subscriber base of 24.5 million subscribers in the United States, but only 9 million of those users pay for the premium tier. Those ad-supported subscriptions, which generate around $10 in average monthly revenue per user, lag far behind Netflix and newer rivals Disney+ and HBO Max.
To combat this, Peacock is spending more than $3 billion over the next three years on original programming, according to a report from The Information, which obtained internal NBCU documents related to the company’s latest strategic plans for the streaming platform. That’s well above the billions spent by other media companies to launch their own direct-to-consumer services in recent years, and suggests that the company is ready to take advantage of its scale to monetize film and TV content more effectively.
However, it’s still very bare bones, with limited content on offer. NBCU, which is investing heavily in original series like Knives Out mastermind Rian Johnson’s Poker Face, plans to launch a free version that will feature ads – just as on cable and satellite TV – with a $5-per-month ad-free tier that will allow viewers to watch movies and other shows the day after they run on NBC Television Network. There will also be a variety of curated channels, which combine clips from show-specific NBC segments with short digital extensions of current shows including Today All Day and SNL Vault.
In addition to the new channel offerings, Peacock will also feature a host of exclusive videos that aren’t currently available anywhere else on the Internet, such as a sneak peek at an upcoming episode of The Office and behind-the-scenes footage from the show’s first season. It will also host a variety of live breaking news coverage, including exclusive coverage of the 2020 Presidential election and Meet the Press with Chuck Todd.
With so much content on offer, it’s a wonder why Peacock has only 11.3 million US subscribers as of last month. It’s a far cry from Netflix, which has 222 million worldwide subscribers, and the company has said it expects average revenue per user (ARPU) to reach $10 by 2021.