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Peacock Struggling to Keep Up, Losing Millions in Revenue

Lauren Forristal

While Peacock is on its way to reaching its goal of 35 million users by 2024, it is nowhere near NBCU’s break-even prediction of $7-8 average monthly revenue per active user. In reality, Peacock is losing more than $8 monthly on each user.

Comcast recently announced that Peacock had lost over $520 million with a revenue of $230 million for Q3. No one needs to be proficient at math to realize that this is a huge and devastating loss.

The obvious solution? According to LightShed Partners' Richard Greenfield, Peacock needs to increase content (especially exclusive and/or original content), release more day-and-date movies, and consider higher investment spending.

Greenfield believes that the current ARPU run rate is because 84% of Peacock Premium subscribers are getting the service for free through Comcast/Cox, and approximately one-third of MAAs are free Peacock users, which means that over 85% of Peacock MAAs don’t pay a fee. The customer engagement isn’t up to par either, which is hurting its ad revenue.

Because most subscribers choose that free tier, people are missing out on Peacock’s premium content. That’s why Peacock is bleeding money, and the churn rate is the highest in the industry. Greenfield writes, “Peacock needs far more content than it is currently offering.”

While Netflix has over 2,400 original titles, Peacock only has a couple hundred. Granted, Netflix has been around way longer but it’s vital that Peacock catches up, especially if they want to compete with HBO Max or Hulu.

This year’s day-and-date movie releases, “Halloween Kills” and “Boss Baby” drove a lot of subs, but as long as they continue with a solely ad-supported service rather than a hybrid advertising/subscription, their success will continue to wane.

Just as AT&T and WarnerMedia are adding exclusive features to the HBO Max platform, NBCUniversal is planning to shift its movie releases onto Peacock, leaving its old partner (HBO Max) in the dust. The releases will be on the platform for four months before moving on to Netflix or Amazon Prime Video. This may seem risky, but Comcast CFO Michael Cavanagh remains positive about Peacock’s future, “Innovation around ‘windowing’ is sort of going to be part of what makes us successful over time, we believe.”

Plus, if Universal aired shows for the first time on Peacock instead of on a broadcast or cable network, new subscribers would be more likely to adopt the platform. As we all know, linear TV is second to streaming, and it’s about time media companies come to terms with it.

This future revamp of the platform has a lot of potential. We don’t know if it will meet its goal of being a “top four must-have SVOD streaming service.” However, customers will be pleased to know that they are taking criticisms seriously and will be designing a less complicated interface as well as redeeming their last Olympics disaster as they plan for the 2022 Winter Olympics in Beijing. Fortunately, they have already seen their sub count grow as viewers sign up to watch the Tokyo Games.

How will Peacock pivot? Stay tuned…

Peacock

Peacock is a subscription video streaming service from NBCUniversal that includes original shows, blockbuster movies, and classic television series. Peacock is home to “Yellowstone,” and “The Office,” as well as original hits like “Bel-Air.” You can also watch live sports including Sunday Night Football, Premier League, and exclusive MLB games. Peacock is also the exclusive home to many WWE events like WrestleMania. Premium Plus subscribers can stream their local NBC feed in all 210 markets.

Peacock includes news, entertainment, sports, late-night, and reality from various NBCU properties including NBC, Bravo, and E!.

Peacock also includes the entire library of Bravo shows and has exclusives like “Below Deck: Down Under.” They also include live and on-demand access to Hallmark channels.

The company has acquired the rights to many classic shows like “Parks and Recreation,” and the entire Dick Wolf library including “Law & Order” and “Chicago Fire.”

The service also features blockbusters and critically-acclaimed films from Universal Pictures, Focus Features, DreamWorks Animation, Illumination and content acquired from Hollywood’s biggest studios.

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