Peacock, the streaming service of Comcast’s NBCUniversal, ended the second quarter with 13 million paid subscribers, parent company Comcast reported this morning. In the first quarter, there were 13 million paying customers out of 28 million monthly active accounts. This means that Peacock’s paid subscriber base, as of the end of June, stalled with zero growth.
Also, Comcast revealed that losses at Peacock widened to $467 million (EBITDA), from an adjusted EBITDA loss of $363 million in 2021. Investors reacted negatively and Comcast shares declined 6% in pre-market trading.
While there were losses and its subscriber base stalled, Peacock did help drive an 8% year-over-year increase in distribution revenue.
The company was quick to remind shareholders that the streaming service — which also has a free ad-supported tier — had a “very strong first quarter that was driven by a variety of extraordinary programming,” Comcast wrote in its letter to shareholders.
Back in April, during the company’s first-quarter earnings call, Comcast chairman-CEO Brian Roberts warned that the company did not anticipate a significant level of growth quarter to quarter. The 4 million paid subscriber additions in Q1 2022 were largely thanks to Super Bowl LVI and the Beijing Winter Olympics that streamed on the service.
Sports is an easy money-maker for the service with live coverage offerings like Sunday Night Football, the French Open tennis tournament, Premier League and more. It is also the streaming home for the WWE Network. All its live sports coverage is offered to Peacock Premium subscribers.
However, Peacock understands that the majority of its customers opt for the ad-supported plan.
John Jelley, SVP of Product and UX at Peacock announced at this year’s NewFront presentation that the streamer will have new ad formats to strengthen commercial opportunities with its marketing partners. This includes In-Scene Ads, which blends products with content during post-production and a “frame ad,” where a brand will get a frame around the content the customer wants to watch.
In today's earnings call, the company said, "On Peacock, we had the benefits of being in the market where we came in and we think we picked the right business strategy, which is kind of an extension, not a new business, which will be based on dual revenue streams, subscription advertising, and I think everybody has been in that direction of validation of that business model."
While Peacock is a streaming service, Comcast likes to think it’s more than that. The company sets itself apart by focusing on its connected TV (CTV) strategy.
Advertising is another huge focus. "As far as advertising in general, linear and Peacock, we're one of the largest advertisers out there with over $10 billion of advertising," Comcast added.
But the streaming service hasn’t given up on convincing its non-paying subscribers to switch over to the Premium plan, which is priced at $4.99 or $9.99 per month. A few months ago, Peacock confirmed a summer test that rewards paid subscribers with $15 movie tickets via Fandango or $7 Vudu rentals once a month.
While it is unknown if the added benefits will incentivize subscriptions, we speculated that it is unlikely that customers with the basic free plan would be willing to pay for the ad-free tier just for one free movie every month. An NBCUniversal spokesperson told TechCrunch that the feedback was positive.
Peacock has continued to focus on improving its customer experience with a new interface and menu options. It also has a new “Catch Up with Key Plays” feature, which allows English Premier League fans to watch highlights without having to leave the in-game viewing experience.
Peacock is hoping for the new content coming to the service helps drive subscriber growth as well.
In its letter to shareholders today, Roberts said, “We expect our recent premieres and planned slate of content and live events from our media and studios businesses, including Jurassic World: Dominion, Minions: The Rise of Gru, Nope, Sunday Night Football and The World Cup, to make significant contributions later this year, including to our subscriber growth at Peacock.”
According to the company, “Bel-Air,” the “Fresh Prince of Bel-Air” reboot, was the most successful original show in the streaming service’s two-year history, despite the audience score of 71% on Rotten Tomatoes. It also became the home for Bravo shows like "The Real Housewives of Atlanta” and “Top Chef.”
While NBC and Peacock will broadcast this year's Emmys, the fledgling service only received three nominations for “Glow in the Dark Queen of the Universe” and “The Tease.” NBC received 28 Emmy nominations in total. In comparison, HBO/HBO Max had 140 noms, Netflix grabbed 105 and Hulu had 58 nominations.
Its most recent comedy-thriller series “The Resort” hit the platform today but already doesn't have the best reviews. Starring William Jackson from “The Good Place” and Cristin Milioti from “Palm Springs,” the mysterious love story was labeled as “weak” and confusing by The Hollywood Reporter and CBR called it “dissatisfying.” These obviously aren’t the reviews that would convince new subscribers to go watch the show, but since these are just opinions it's probably best to see it for yourselves.
Yesterday, Peacock handed a straight-to-series order to “Those About to Die,” a gladiator drama directed by “Moonfall” and “Independence Day” director Roland Emmerich,and inspired by the nonfiction book written by Daniel Mannix. The production budget was reported to be approximately $140 million, per Deadline.
In May, Peacock announced a deal with Lionsgate, exploring original films. Separately, the streamer announced three upcoming original movies set to premiere in 2023, which include "Shooting Stars," based on LeBron’s background as a high-school basketball player, "Praise This" and "The Killer."