The pathway to streaming success has been harder than just about any in the industry imagined it would be 15 years ago. At that time, Hulu was just getting going, and Netflix was still a bustling DVD rental-by-mail service. Cable and satellite still dominated the home entertainment marketplace, with a little help from TiVo.
Today, everything about the way Americans consume media has undergone enormous changes. Our phones are small computers that can access any kind of entertainment we want in seconds, which led to a streaming service marketplace that has ballooned to over 300 subscription video services alone.
Peacock entered the scene relatively recently, arriving in April 2020. Its parent company NBCUniversal has been patient with the service, and that patience has been rewarded. The service now sits at 22 million subscribers, jumping from 9M to 20M over the course of 2022 alone.
What Has Made Peacock Successful?
Peacock’s executives have made shrewd moves to help it grow. Pulling “The Office” from its longtime home of Netflix and housing it exclusively on Peacock in 2021 was one such move, a particularly timely one as movie theater closures forced by the COVID-19 pandemic were compelling people to look for entertainment at home. “The Office” was the most-streamed show of 2020, piling up more than 57 billion minutes of viewing time according to Nielsen. Thanks to moves like this, and moving the next-day streaming of Bravo shows from Hulu, Peacock has slashed its churn rate, falling from 9% in March 2022 to 5.73% a year later.
Peacock also carried livestreams of the NFL’s “Sunday Night Football” since its inception, which helped give it a reputation as a streamer where users could watch live sports. It’s bolstered its sports offerings at a breakneck pace since then, and added exclusive NFL regular season and playoff games in 2023. The service will also carry exclusive Big Ten football games this year, on top of MLB baseball, Notre Dame football, pro golf, tennis, English Premier League soccer, and more.
Original programming like “Poker Face,” “Mrs. Davis,” “Bel-Air,” and a host of true crime documentaries have kept users engaged, as well as Universal movies fresh from the theaters. Peacock cracked a coveted threshold in April; according to Nielsen, the streamer made up 1.1% of total viewing time in the United States over the course of that month. Despite this milestone, Peacock’s current prices are amongst the lowest in the streaming industry. When Paramount+ executes a previously-announced price increase on June 27, Peacock will be the cheapest among the top streaming services at $4.99 per month for its ad-supported Premium tier, or $9.99 per month for its ad-free Premium Plus plan.
All Great Bargains Must Come to an End…
Given the sheer amount of value that customers are getting from Peacock, it would be very surprising if the service did not raise its prices in the near future. NBCU executives have stated repeatedly that they expect their streaming segment to hit peak losses this year, and a price jump would help Peacock boost its average revenue per user (ARPU) significantly. That would mean a faster track to profitability, which is the goal all streamers are working toward.
Reps for NBCU did not have any comment on potential price increases when contacted by The Streamable, but users would be wise to prepare for it nonetheless. The streamer is already preparing to monetize more of its users this month, as most Xfinity customers who had been getting free Peacock with a cable or internet subscription will lose that free account on June 26.
That was not the first step in a series of moves that signaled Peacock brass thought the timing was right for further monetization of customers. In late January, The Streamable was the first to report that Peacock was no longer offering its free plan to new users. That plan had select episodes of NBCU shows and some movies, all with ads, completely free. Now, new customers who don’t have active Xfinity subscriptions find all of Peacock’s content behind a paywall.
How Much Might Peacock Raise Its Prices?
If a price increase does come for Peacock, it likely won’t be drastic. An increase of $2-$3 per month could signal the company is looking to keep generating growth, and that would be in line with the jump Apple TV+ executed last fall. In October 2022, Apple’s streaming service unexpectedly increased in price from $4.99 per month to $6.99.
If, on the other hand, Peacock decides to add an amount closer to $5 to both of its price tiers, it may indicate that NBCU wants to be more aggressive in growing the service. Peacock already hosts an impressive amount of live sporting events, but a bigger price jump could show that NBCU wants to bring the NBA back to its channels. The league is reportedly looking to sell a streaming-exclusive package of games in its next broadcasting deal following the 2024-25 season, and NBC has been reported to have interest in bidding on NBA rights when they become available.
Come On, Everyone is Doing It!
In the past 16 months, nearly all of the top subscription video-on-demand (SVOD) services have raised prices in response to market pressures. Netflix got the party started in January 2022, but over the course of the year, all of the Disney streamers followed suit. HBO Max (now just Max) raised its prices in January of 2023, leaving Prime Video as the sole member of the “Big Five” streaming services not to see its monthly cost increase in that time.
Throw in Apple TV+ and Paramount+ as mentioned above, and the industry-wide trend is clear. If Peacock does not rise in price soon, it risks putting itself at a competitive disadvantage to its peers. The number crunchers at NBCU know this perfectly well, and are unlikely to allow it to happen when the alternative is so clear, and is likely going to be great for business, despite customer angst. Peacock is a business, first and foremost, and its profitability may depend on a rise in subscription prices.
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 “Poker Face” and “Bel-Air.” You can also watch live sports including NFL, MLB, WWE, Olympics, Premier League, NASCAR, French Open, College Football and Basketball, and PGA Tour. Premium Plus subscribers can stream their local NBC feed in all 210 markets.