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Should Peacock Just Give Up and Partner with Netflix?

Ben Bowman

Remember the glory days of Netflix? When the service pivoted from DVDs to streaming, the catalog was mind-boggling. But over the last decade, nearly every media company has decided they want a chunk of the audience. The streaming wars have never been hotter. And as every studio claws back its content, the number of movies on Netflix has fallen from over 6,700 in 2010 to less than 3,800 today.

We’re left with a jumble of services that feel incomplete.

  • Netflix is throwing tons of money at new shows, but keeps losing nostalgic “comfort TV” to other services.

  • Disney+ has their own huge library plus some 20th Century Fox gems, but new content is rolling out very slowly and anything remotely edgy lives on Hulu.

  • HBO Max combines decades of prestige TV with the Warner Bros. library, but new additions are also moving at a slow pace.

  • Amazon Prime Video has a ridiculously large catalog of films and shows, but aside from a few prestige items, much of it is the cinematic equivalent of pocket lint.

  • Discovery+ caters to the reality show lover.

  • Apple TV+ seems to be content to have a microscopic catalog of high-budget films and shows.

  • Paramount+ is still finding its feet and praying “Star Trek” can carry them.

…and then there’s Peacock.

This was a masterclass in how not to launch a streaming service.

Originally planned to debut alongside the Tokyo Olympics, the coronavirus scuttled that idea. So what was the big draw? NBCUniversal had no backup plan. There was no “Mandalorian”-level series to draw in fans.

If you assumed you’d get your beloved NBC shows, you’d be disappointed as “Friends” jumped to HBO Max and “The Office” sat on Netflix for several months. There’s no “Seinfeld.” No “ER.” No “Mad About You.” No “Golden Girls” or “NewsRadio” or “Just Shoot Me.” Peacock has “Cheers” and “Frasier,” but they’re also available on three other streaming services. You can find several seasons of “Parks and Recreation” elsewhere.

Peacock doesn’t even offer its C-list shows from the past like “Wings” or “Caroline in the City” or “The Single Guy” or “Veronica’s Closet.” No one under 40 has even heard of those, but they’re at least something Peacock could add.

Peacock even seems hesitant to jump in with streaming exclusives. You have “The Amber Ruffin Show,” the “Saved by the Bell” reboot, and the “Punky Brewster” reboot, and not much else. Where are the big money blockbusters? Where is the content for people born within the last three decades? There seems to be no strategy here.

To succeed in the streaming space, you need to offer obvious, exclusive value for your audience, and Peacock has fallen flat. (Predictably, Disney+ and Netflix have the most exclusives.) If Peacock strictly wanted to exist as an ad-supported venture, that’s fine. But expecting people to pay $9.99/month for commercial-free reruns and one studio’s movie library is not realistic.

Prior to the launches of HBO Max and Peacock, “Friends” and “The Office” were two of Netflix’s most-streamed shows. It made sense. You might subscribe to Netflix for all the originals, but if you just wanted background TV or some mindless reruns, they were already included in your subscription. After an intense 18 months of new service offerings, it seems clear that audiences are most willing to pay for exclusives, and older shows are merely a nice bonus. Indeed, losing “The Office” didn’t even hurt Netflix.

Now, NBCUniversal is contemplating the nuclear option: pulling its films from HBO Max and Netflix to make them Peacock exclusives. Even then, we’re still talking about films that will get a theatrical run. We’re not seeing the must-see Peacock-only content emerging. As it stands, Peacock only merits a tiny fraction of the streaming audience.

Peacock’s performance

Peacock has 33 million sign-ups, but some of those may be free ad-supported accounts.

The addition of “The Office” drove more sign-ups than the initial launch of the Peacock platform.

According to data from JustWatch, Peacock has just a fraction of market share, hovering around 5%.

What’s next for Peacock?

To its credit, Peacock is at least starting to try. They absorbed the WWE Network. And we’re intrigued by the upcoming “Girls5eva” from the “30 Rock” creative team.

But at its current rate, Peacock is simply growing too slowly. Jump-starting production on a raft of TV and movies is expensive and time-consuming even when the world isn’t grappling with a deadly pandemic.

By the end of this year, it’s estimated the average U.S. home will have three streaming subscriptions. Three. NBCUniversal is fooling themselves if they think they have enough content to make a strong play for one of those slots.

So let us propose another solution: Peacock should simply give up and strike a deal with Netflix.

If NBCUniversal licensed its catalog to Netflix, it would gain an automatic revenue stream without lifting a finger. They could shed the workers and the technology needed to keep Peacock afloat. And they could go back to doing what they do best - developing movies and linear TV. As the deal neared expiration, they could shop the catalog around to Disney’s Hulu or WarnerMedia’s HBO Max. Similar to the ferocious bidding for various sports leagues, NBCUniversal could leverage their content to the highest bidder with each contract. The library may not be enough to stand on its own, but it would be a big win for a service with a bigger audience.

Another issue is the international race. Netflix has a massive headstart with over 200 million paying subscribers. Disney is racing to catch up with its Star component. To compete, NBCUniversal is considering a new non-Peacock service for users outside the U.S. Again, this is an area where Peacock would be wise to team up with the dominant international player.

NBC’s shows are already getting great traction with Netflix. For the week of February 22-28, the second most-streamed show on Netflix was NBC’s “Good Girls.” Keeping an underperforming show on Netflix helps on-board potential new viewers, which could lead to better ratings in subsequent seaons. “Breaking Bad” creator Vince Gilligan credited Netflix for keeping that show alive long enough for the audience to discover it. Netflix got the show between Seasons 3 and 4. You can see how the increased exposure led to significantly greater demand over time.

Yes, Peacock could soldier on for a decade, throwing billions of dollars at content. But they’re joining the battle too late with too little ammunition to start. Netflix has the reach, but would be better off adding some well-loved comfort TV to its catalog. It’s a perfect marriage.

When you’re a brand new streaming service and your primary driver of subscriptions is a sitcom that went off the air eight years ago, it’s time to rethink some things. Perhaps that what’s you get for naming your service after a bird that struggles to fly.

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