Peacock, NBC’s streaming service, will have free option, ‘The Office’

Tiffany Hsu and Edmund Lee, The New York Times

Posted at Jan 17 2020 12:06 PM

A peacock is pictured outside NBC headquarters at Rockefeller Center in the Manhattan borough of New York City, New York, US, Jan. 16, 2020. Carlo Allegri, Reuters

Despite taking its name from one of the flashiest animals on the planet, NBCUniversal’s Peacock streaming service is at risk of blending in with the flock.

On Thursday at Rockefeller Center in New York City, the media company, owned by cable giant Comcast, made the case that Peacock would distinguish itself from Netflix and Disney Plus, among others in an increasingly crowded field, because it will rely on advertisements rather than subscriptions to generate revenue, while offering live broadcasts, including news programming and sports coverage in addition to 15,000 hours of TV shows and movies.

The streaming service announced itself to the world with the help of a 15,000-pound topiary peafowl sculpture that towered over throngs of Midtown tourists for much of the day. As the 4 p.m. presentation approached, investors, journalists and ad agency employees headed through the doors of 30 Rock toward Studio 8H, home of “Saturday Night Live,” to hear the Peacock pitch from company executives and stars.

Stephen Burke, chief executive of NBCUniversal who recently announced that he would step down in August, was the first to take the stage. He described Peacock as “the equivalent of a 21st-century broadcast business delivered on the internet” before making way for a procession of NBC talent.

Tina Fey, the “SNL” alumna and “30 Rock” creator, got laughs with a reference to the streaming service’s name. “When I sold my first very TV show,” she said, “I named it after this building. I wanted to name it ‘Peacock’ but was told it was a hard no and that it would not pass the censors.”

NBC late-nights hosts Seth Meyers and Jimmy Fallon helped make the case, as did NBC News anchors Rachel Maddow, Lester Holt and Savannah Guthrie. Dick Wolf, the powerhouse producer whose “Law & Order” shows will stream exclusively on Peacock, sat in the audience. Sizzle reels were heavy with scenes from “The Office,” the enduring sitcom that NBCUniversal wrested from Netflix in a $500 million deal last year.

When it goes live in April, Peacock will have a deep library of content and a smattering of originals. So what will distinguish Peacock from other streaming platforms, other than its affinity for avian references on Twitter? As the two-hour presentation repeatedly suggested, it will be NBCUniversal’s hefty bet on advertising.

Peacock will be available in three tiers. The so-called Peacock Free option will allow viewers to watch current seasons of NBC shows, past series, movies, news, Spanish-language content and one of NBC’s most elaborate productions: the 2020 Summer Olympics and Paralympic Games in Tokyo.

In exchange for paying nothing, Peacock Free viewers will sit through commercials from State Farm, Target, Unilever and other brands, making Peacock more akin to YouTube than Netflix. NBCUniversal executives hope the reliance on ads will give them an advantage over streaming services from The Walt Disney Co., Apple, AT&T and other media giants.

Peacock will also offer what it calls Peacock Premium, a plan that comes with commercials and has double the content: more than 15,000 hours of original programming, current series, news and sports. Those who sign on for the top level will have early access to “The Tonight Show Starring Jimmy Fallon” and “Late Night With Seth Meyers.” Peacock Premium will be free to viewers who subscribe to cable companies Cox or Comcast and will cost $5 a month for other viewers. For $10 a month, the same amount of content will be available ad-free.

Peacock will go live April 15 for certain Comcast customers, expanding nationwide July 15, days before the 2020 Games. NBCUniversal plans to spend hundreds of millions of dollars to market the platform. It expects to rack up 30 million to 35 million accounts by 2024.

“Peacock is unique because of its advertiser model,” said Dan Ives, an analyst with Wedbush Securities, mentioning the “massive moat of content” available through the platform. “This could be a watershed event in terms of starting to monetize advertising in the streaming world.”

Peacock’s pride is its sprawling library — more than 600 movies and 400 series — which it hopes will draw more advertising dollars.

The service has nailed down exclusive digital rights to shows like “The Office” and “Parks and Recreation” while also lining up reboots of “Saved by the Bell” and “Battlestar Galactica.” A series based on the true crime podcast “Dr. Death,” featuring actors Jamie Dornan and Alec Baldwin, is on its way, as is an adaptation of “Brave New World,” with Demi Moore.

Fey will produce a Peacock original series, “Girls5Eva,” about a washed-up 1990s band. NBCUniversal company Telemundo will provide 3,000 hours of Spanish-language original programming. And Peacock will also try to attract viewers through a licensing deal with Lionsgate, known for films like the “John Wick” action series, while also becoming the exclusive streaming home for new films from Universal.

Peacock will also run a comedy special and an interview series from Kevin Hart’s Laugh Out Loud company, new animated episodes of “Curious George” and “Where’s Waldo,” and Premier League matches.

Other streaming services, like the Disney-owned company Hulu, offer discount plans that come with ads; and the still-gestating short-form video app Quibi, set to start streaming April 6, will also go the ad route.

Comcast does not expect Peacock to be profitable in its first five years, executives have said. The cable company, which has 21.4 million video subscribers and 28.2 million broadband subscribers, plans to inject $2 billion into Peacock over its first two years.

“Getting in the game with Peacock is the right way to preserve an audience, but it will be very, very expensive,” said Peter Supino, an analyst at Sanford Bernstein.

Peacock will give companies a lot of advertising options, with tech that will allow for ads that show up when viewers hit pause and others that will appear during bingeing sessions. The service will have five minutes of ads per hour or less, according to NBCUniversal, which is also capping the number of times an ad can appear for the same viewer. The company said that it will use customer data from Comcast set-top boxes, advertising partners and its own collection to deliver relevant ads.

“Ad-supported streaming is about more than giving consumers what they want; it’s also about giving advertisers what they desperately need,” said Linda Yaccarino, NBCUniversal’s ads chief.

The platform will become the main digital repository for shows like “SNL” and “The Tonight Show,” content available on YouTube that NBCUniversal would prefer to bring more securely into the corporate fold.

Some analysts have expressed the concern that NBCUniversal may be cannibalizing itself to support Peacock, forgoing licensing arrangements and other revenue-generating deals for popular shows like “The Office” to provide exclusive streaming content to its customers. By offering early peeks at its late-night programs, NBCUniversal may alienate station affiliates and cable operators that pay to carry those broadcasts.

Peacock went through a choppy development process, with a shake-up in its leadership team less than a month after the service was announced in September, and it faces intense pressure from competitors like Disney, which unveiled Disney Plus with a great marketing push in November.

The new platform must also contend with viewers who, faced with more entertainment options than ever, are battling streaming fatigue. Multiple studies have concluded that people are willing to pay for only a few services.

“There’s a battle for market share, and they’re going to have to fight tooth and nail for consumer eyeballs,” Ives said.

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