The upcoming Paris Summer Olympics may drive record sign ups to Peacock, but the real work for NBCUniversal starts after the closing ceremony: keeping those new subscribers on the platform long term.
Sports
The Olympics highlight the importance of live sports for Peacock’s future viability.
Peacock has already leveraged an exclusive NFL playoff game into sustained subscriber growth. The Olympics provide a chance to repeat this at even greater scale. But the challenge lies in sustaining momentum beyond these sporadic events.
Peacock will once again stream NBC’s Sunday Night Football, the #1 primetime TV show for 13 years in a row. On top of that, NBC is set to become a partner in the new NBA rights deal, barring potential legal shenanigans. Peacock will get a significant slice of those games, running from the Fall until late Spring.
Continuous sports content — from the Premier League to college sports, the PGA Tour, and more — will help Peacock in two crucial areas by reducing churn, and increasing ad revenue.
Legacy Content
How else can Peacock translate this sports demand into long term growth? Legacy linear content will form another part of the puzzle.
Some of the most in-demand series on Peacock in Q2 2024 included The Voice, Brooklyn Nine-Nine, and Law & Order: SVU. These are the long-running series with hundreds of episodes that keep audiences on the platform for longer, making them less likely to hit unsubscribe.
Peacock is making progress here. After lagging for years in seventh place among major streamers in total on-platform demand share — accounting for all TV shows and movies, licensed and original — Peacock has firmly established itself ahead of Paramount+, and is even closing the gap with Disney+ in this category.
Movies and M&A
In other segments, NBCUniversal is imitating the Disney corporate synergy playbook well with its Super Mario franchise. The blockbuster 2023 movie has been converted into an expanded section at Universal Studios Hollywood, helping revenue growth in Comcast’s domestic parks segment.
Universal continues to be the domestic box office leader, with the highest studio gross so far in 2024, after winning the domestic box office in 2022 and 2023.
Looking long term, Warner Bros. Discovery CEO David Zaslav’s recent comments at Sun Valley have drummed up another round of media M&A speculation. While imminent action is unlikely, we are re-surfacing our ‘M&A Cheat Sheets’ from the beginning of the year, one of which highlighted a potential matchup between NBCUniversal and Warner Bros. Discovery.
Peacock’s leaders knows it cannot compete as another Netflix. But by leveraging its expanding portfolio of exclusive live sports with established linear series and a beloved Universal movie slate, it can build a sustainable scaled-down service.
On-Platform Demand Share
- While demand for original content drives subscription growth, library content is key for customer retention, which will be tested once the Paris Olympics come to an end.
- Before Q4 2023, Peacock was consistently in last place in on-platform demand share, but it has now finished ahead of Paramount+ for three consecutive quarters.
- In Q2 2024 Peacock expanded its lead over Paramount+ in this category, from a 0.2% lead to up 0.8%. It also significantly closed the gap to Disney+, from down 1.2% to down 0.5%.
- This data shows the strength of Peacock’s varied content slate across film and TV — from the Universal-backed movie slate to next-day NBC broadcast series. Universal movies also go to Netflix and Amazon after four months on Peacock, meaning Comcast is beefing up its own platform without sacrificing key licensing revenue.
Catalog Demand Share by Original Release Type
- While the biggest hits will always be strong growth drivers, streaming originals on average drive a fraction of the overall demand for most streamers, showing why legacy companies are pivoting back to licensing deals for their legacy content.
- Peacock has successfully leveraged its strong line up of linear programming — including next-day NBC content, and of course Bravo’s popular reality franchises such as The Real Housewives.
- Broadcast series in particular over-index with Peacock’s TV slate. They account for 36.9% of the demand, and only 13.3% of the supply. For comparison, Peacock’s streaming originals drive 13.8% of the demand, but account for 16.0% of supply. NBCUniversal should take this into account when establishing future licensing strategies.
M&A Cheat Sheet: NBCUniversal & Warner Bros. Discovery
- Warner Bros. Discovery CEO David Zaslav effectively put all options on the table for his company earlier this month. Comcast may be the best positioned company to acquire WBD, or spin off NBCU to merge with WBD as a separate entity.
- This hypothetical marriage of convenience makes sense from a scale perspective. It would surpass Disney as the top media company by corporate demand share, and a complete combination of Max and Peacock could jump ahead of Netflix in total catalog demand share.
- Any action before 2025 is unlikely, but WBD’s lack of a broadcast network already makes this more palatable than other potential deals.
- One major hurdle will inevitably be CNN. It’s hard to imagine CNN and MSNBC/NBC News all under the same umbrella. Industry estimates put a spun-out CNN worth mid-ten figures.
- Zaslav views himself as a peer to Comcast CEO Brian Roberts, making the executive structure of a future company a delicate matter. Roberts has made high profile bids for Disney and Fox in the past, so it is not farfetched for him to attempt a similar play given Zaslav’s recent comments.
