Does Peacock Need the Olympics?

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This week’s Buffering checks in on Peacock six months after its national rollout and in the wake of a flurry of activity surrounding the streamer. We’ve also got a quick look at the latest earnings over at Apple and HBO Max parent AT&T, plus some thoughts on awards voters learning to love streaming movies. As always, thanks for reading.

After a relatively quiet launch last summer, Peacock has been strutting its stuff pretty aggressively over the last two months. I wouldn’t exactly call it a reboot, but the NBCUniversal streamer has been generating a ton of headlines recently, most of them positive:

Earlier today, Peacock parent company Comcast said 33 million people have signed up for either the free of paid version of Peacock, up from 10 million users within two weeks of launch and 26 million as of early December. As always, there was no mention of how many of these sign-ups are from free or paid users, but it’s certainly good news Peacock has tripled its user based within six months.

On Tuesday, Peacock announced a joint-custody agreement for the streaming rights to Modern Family. The long-running ABC comedy will stream on Peacock and Hulu starting next month.

Monday saw a deal that will bring all the content of niche streamer WWE Network to Peacock starting in March, instantly giving the NBCU-owned hatchling access to thousands of hours of new and library content — plus the roughly 1 million current WWE Network paying customers. It’s a smart play for Peacock: Wrestling fans are fiercely loyal, and there’s a long history of upstart TV platforms — USA Network in the ‘80s, UPN in the late ‘90s, the slimmed-down Fox Broadcasting in 2019 — partnering with WWE (and predecessor WWF) to build an audience base.

Last week, NBCU said it would shutter its NBC Sports Network cable channel by the end of this year. While most of NBCSN’s assets (such as telecasts of NHL games and NASCAR races) will shift to sister cable service USA Network, Peacock is also expected to take on a decent chunk of NBCSN programming. The company had already shifted Premier League soccer games from NBCSN to Peacock, and this move will only increase Peacock’s sports offerings.

In late November Peacock released its Saved by the Bell reboot to surprisingly strong reviews (it even made one critic’s top-ten list for 2020), and audience response was strong enough to merit a quick season-two green-light earlier this month. While it would be wrong to call the show a breakout hit, Bell is off to a much better start than previous Peacock originals, such as the quickly canceled Brave New World or the mostly buzz-free crop of international acquisitions that streamed on the service over the summer and early fall. (As I noted in a December edition of the newsletter, I was surprised by how much I enjoyed the reboot.)

And of course on January 1, Peacock finally got its claws on its most anticipated bit of programming when The Office gave up its primo location on Netflix to move back to its original NBC (or NBC-adjacent) hometown. Mark Lazarus, NBCU’s head of TV and streaming, last week confirmed the show is already Peacock’s “most-viewed title”; during this morning’s earnings call, NBCU CEO Jeff Shell said “momentum has further accelerated” as a result of the Dunder-Mifflin migration. “We’re seeing people who are watching The Office on Peacock are watching lots of our other comedies,” the exec noted. “It’s really driving Parks & Recreation and really driving Brooklyn Nine-Nine, amongst others. So, it’s kind of an ecosystem.”

That’s the good news for Peacock. Here’s the bad: All of this recent momentum could soon be slowed by something completely out of the platform’s control. While a recent report that the rescheduled Summer Olympics was not moving forward may have been premature, the still-raging coronavirus pandemic means the idea of the Games getting squashed again is hardly fantastical. Yes, as recently as yesterday, Olympics execs were saying they aren’t “speculating” about whether Tokyo will move forward and instead are “working on how the Games will take place.” And an NBC Olympics rep tells Buffering the company’s “preparations continue toward presenting the Tokyo Olympics to the American audience this summer.”

But similar statements were made last March, weeks before the 2020 Games were pushed to 2021. If a similar reversal happens again, Peacock will be plucked — at least in the short-term: The streamer is slated to host a ton of Olympics-related content, and NBCU has long planned to use its broadcast and cable telecasts of the late event to drive sign-ups and subscriptions to the on-demand service. I asked one veteran cable executive what the impact of a nixed Olympics would be on Peacock, and said exec did not mince words. “It would be absolutely devastating,” he said.

My take is not quite that apocalyptic. First, let’s be clear, there’s still a chance the Games could go forward in some form. So much has been invested by Japan, and the IOC so desperately needs the revenue it gets from TV rights, that there is a strong motivation to figure out how things might proceed safely. We do have vaccinations now, and while the optics of young athletes getting jabs before older folks will be tricky, the total number of people set to live in the Olympic Village is around 26,000. I’m sure Moderna and Pfizer would gladly donate those doses in exchange for a ton of positive PR, while pictures of Olympians getting vaccinated could only help convince those hesitant about getting the shot to sign up.

But even if the Games end up being nixed, Peacock won’t suddenly be Quibi’d into extinction. Yes, the lack of a huge tentpole likely means it will take longer for Peacock to hit whatever its internal targets are for new sign-ups and user engagement. Ad revenue will come in well short of projections (as it would across all NBCU properties); raising awareness of the service will be even harder and will require diverting even more marketing dollars to Peacock than have already been spent. And, yes, I think the loss of the Games would be emotionally devastating to Peacock staffers who’ve been thinking of them as the event that would turbocharge the platform’s launch.

All that said, I would argue that last year’s Olympics no-go underscores how Peacock is not reliant on any one piece of content. When the 2020 Games were pushed, the streamer was able to pivot relatively effectively, getting decent buzz for Saved by the Bell and talk shows from Amber Ruffin and Larry Wilmore; the September debut of Trolls World Tour just a few months after its theatrical and pay-per-view windows; and the holiday-adjacent run of the Harry Potter movies. And people who want to watch The Office via streaming don’t need ads during the Olympics to tell them Peacock is the show’s new home. (How many folks are going to keep paying $5 to $10 per month mostly for a 16-year-old sitcom remains an open question.)

What’s more, as former NBC and Fox scheduling guru Preston Beckman has noted many times over the years, the Olympics audience is very much a borrowed audience that rarely (if ever) has managed to turn something else into a hit. NBC has tried multiple times to use the Games to boost its linear TV shows, and I don’t recall it ever working all that well. Most recently, for example, Superstore and Good Girls got a bit of sampling thanks to Olympics promotion, but neither saw their ratings soar as a result. I think the Olympics would absolutely help Peacock if it happens, but even a blockbuster two weeks won’t suddenly turn the streamer into an overnight threat to rivals such as Hulu or CBS All Access (the soon-to-be Paramount+.) Peacock is going to succeed or fail based on the overall quality of its offering and whether or not people who don’t get free access to it through their cable or broadband subscriptions think it is something that merits another monthly charge to their credit cards.

I am also curious to see how the Peacock business model evolves over the next year, with or without the Olympics. Last July, Matt Strauss, who oversees Comcast’s direct-to-consumer business, told me that getting consumers to pay just for Peacock was mainly a short-term strategy. “The longer-term vision is that we really believe that through bundling and through these partner integrations, both internet and pay TV, we’re going to be able to reach a majority of the country and give them some form of access to Peacock for free,” he told me then, figuring that negotiations with TV and internet providers would make this a reality by the end of 2021. Since then, not much progress has been made getting such deals done. NBCU did confirm a new agreement with Charter (which operates in many markets as Spectrum) that will give its customers a “free extended trial” of Peacock, but hasn’t yet said how long said preview will be. But so far, only Comcast Xfinity and Cox Contour customers currently have long-term free access to Peacock.

Perhaps this will all be worked out in the next few months, but one TV observer I spoke with this week believes Comcast and NBCU may be having trouble getting cable providers to bundle Peacock. He theorizes the reason is because in exchange for doing so, operators may be looking for NBCU to lower its network carriage fees. If Comcast isn’t willing to budge — or can’t, because it needs that cash — it could be a while before we see more operators offering Peacock for free. That will increase the need for NBCU to sign up more customers directly or to offer more premium programming on its free tier in order to drive up advertising revenue.

In the meantime, Comcast needs to consider being much more aggressive with the price for Peacock Premium, the ad-supported tier which offers full access to the service. While it might make sense to keep the standard price at $5 per month, it should emulate Hulu by making itself very, very cheap for college students (who really love The Office) and by having flash sales to lock in users for a year at a deep discount. (Peacock did have a quiet Black Friday promotion, but to be honest, it wasn’t much of a deal.) Given how much more content Hulu offers, not to mention its decade-plus head start in building awareness, Peacock should be doing a lot more to tempt potential subscribers, particularly if its goal is to sell ad time against a massive audience base.

The other big thing to keep an eye on with Peacock is what sort of original programming ends up debuting on the platform. NBCUniversal blew up its exec structure a few times last year, including a couple of shifts that essentially obliterated any remaining walls between the content-development teams for the NBC TV network, NBCU’s cable properties, and Peacock. I would need a whole other newsletter to walk through the number of suits who were fired, resigned, or moved to different roles within the company (while also noting how last year’s shake-ups undid the big changes of 2019). But the bottom line is that Susan Rovner, a well-respected Warner Bros. TV vet, is now in charge of making any new entertainment programs for the conglomerate — including Peacock — and she is supposed to work with NBCU vet Frances Berwick to figure out where those shows end up. So instead of Peacock (or NBC or USA) having its own team focused on finding the best shows for their respective platform, content will be collectively developed for the conglomerate, and then distributed, to each according to its needs.

If it all sounds a bit convoluted, well, it sort of is. But it also seems to be the new reality for Old Guard media giants trying to make the jump into the streaming era. Disney is doing something similar with its legacy holdings, while ViacomCBS consolidated its vast cable properties into one Borg-like collective. And given the industry trend toward media companies prioritizing streaming services, the changes at NBCU should mean a dramatic uptick in the quality and quantity of programming to hit Peacock in 2021, particularly relative to the pandemic-disrupted offerings of the streamer’s first six months. Whether this translates into a similarly impressive gain in subscribers and viewers will determine whether Peacock ends up medaling in this year’s streaming Olympics or is forced to regroup and hope for better luck next year.

HBO Max and Apple TV+ Data

This week saw two other companies with big streaming assets announce quarterly earnings, with no big surprises buried in their reports.

AT&T said HBO Max got a nice boost from Wonder Woman 1984 and that the combined subscriber base for Max and original-recipe HBO now stands at 41 million. It also reported that the number of folks who’ve set up their Max accounts doubled over the last three months of 2020, to just over 17 million.

Over at Apple, meanwhile, there wasn’t a whole bunch of talk about Apple TV+’s performance. Tim Cook said the service is “off to a rousing start,” but the company also said Apple TV+ wasn’t yet adding much to the tech giant’s already overflowing profits. (Given Apple also just extended the TV+ free-trial period for existing customers till July, that likely won’t change anytime soon.)

Awards Season Comes for Streamers

Even though it feels like movies were canceled in 2020, the start of awards season confirms that there were, in fact, many good films released last year — and most premiered on streaming platforms. Seven of the ten films on this week’s AFI list, for instance, premiered on Netflix, Amazon Prime Video, or Disney+ (though some were screened in a couple of theaters a few weeks before streaming). The National Board of Review’s list of winners and the nominees for the Independent Spirit Awards also contained an abundance of streaming films. Perhaps this will end up being a pandemic-related quirk, but I think the days of Hollywood insiders fretting about movies not being worthy of big awards because they were made for a streaming platform may finally be over.

Does Peacock Need the Olympics?