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Comcast’s Peacock Needs To Think Bigger

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Comcast’s Peacock Needs To Think Bigger

On its most recent earnings call, Comcast reported that its streaming service Peacock had 28 million subscribers in the first quarter of this year, of which 13 million were paying customers.

In the second quarter of 2022, it reported that it had 27 million subscribers, of which 13 million were paying customers.

Clearly, subscriber growth is flat at the moment.More importantly, Comcast (CMCSA) – Access to Comcast Corporation’s Class A Common Stock Report Executives attribute much of the growth to sporting events such as the Super Bowl LVI and the Beijing Winter Olympics, both of which are broadcast live on the service. Unfortunately, they don’t happen every quarter.

So why is Peacock growing so slowly, especially compared to Disney+’s touted triple-digit subscriber numbers (DIS) – Get The Walt Disney Company Report and Netflix (NFLX) – Get Netflix Inc. Report?

Well, increased competition in the streaming world is a big part of that, and Disney and Netflix just have a better-known brand name.

But maybe part of the problem is Peacock’s original shows, which, to be clear, are generally pretty good. But they may not be what Comcast needs right now.

A Brief History of Peacocks

At some point, all traditional TV networks found that Netflix had become a huge competitor to their business, primarily by providing affordable access to their TV and movie catalogs.

NBC, in particular, has a vested interest in building its platform, as young millennials are turning some of their productions into Netflix hits, with “Friends” and “The Office” episodes becoming bigger than any sitcom on NBC at the time. more popular.

In 2019, it all reached a tipping point, with the condor asking the question: “Is Friends still the most popular show on TV?” Gen-Z music icon Billie Eilish samples dialogue from “The Office” , and added rhythm to her Grammy-winning debut album “When We All Fall Asleep, Where Do We Go?”

You really have to fall asleep at the wheel to not notice that kind of thing.

But when Peacock launched in the summer of 2020, it had a case of good news and bad news. The good news is that people trapped indoors are more desperate for distraction than ever, and many viewers are willing to sign up for free, advertiser-backed services to watch some old movies.

The bad news is that due to the COVID-19 pandemic, live sporting events that Peacock is counting on as a spectator driver have been suspended, including the Tokyo Olympics. NBC also couldn’t produce new episodes of hit shows like “Law & Order: Special Victims Unit” or “Brooklyn Nine-Nine” for a while, so it had to rely on news, catalog titles and a handful of originals for most of 2020 content.

Peacock’s future plans

Peacock, a product of NBC, has always had a two-pronged strategy at the risk of being simplified.

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NBC’s unofficial brand of programming for its shows has long been smart and quasi-urban, which often means urban crime programs, like the “Law and Order” franchise, or sitcoms about neurotic people living in big cities, such as “Seinfeld”, “Frasier” “and friends.”

In the second half of the 2000s, devices such as TiVo, the explosion of Internet piracy, the rise of DVD boxed and iTunes sales of TV episodes, and increased competition from cable TV all began to seriously erode the bottom line of Internet TV.

By the end of the decade, NBC found itself seemingly unable to launch new mainstream hits with broad appeal, save for spinoffs from its “Law & Order” franchise installments.

Instead, its lineup is filled with quirky sitcoms like “30 Rock,” “Community,” and “Parks and Recreation,” all of which are critically acclaimed shows with loyal fan bases that never translate to NBC high ratings. But the network also doesn’t have any real replacements on hand, so shows are constantly being updated, in part to license content to streaming services.

The most cynical critics (or TV executives) might scoff at cleverness and art as a great way to get ahead of viewers’ heads and cancel shows, but that’s not the case.

But the truth is, smart, witty shows do need a little breathing room to find their audience, as they tend to lack more compelling narrative hooks, like a show called “American Ninja Warrior.”

Quality sells itself over time. Clever shows like “Seinfeld” and “The Office” were rarely watched in their early seasons, but have since become cornerstones of the network’s programming. “Parks And Recreation” was always in danger of being canceled, but its popularity on Netflix and social media prompted NBC to give it seven seasons, and “Galentine’s Day” is now an unofficial holiday.

But NBC also hedges its best with wildly popular populist shows like spectacle-driven TV shows like “Saturday Night Live,” “The Tonight Show” and “The Black List.”

History repeats itself

Now, Peacock finds himself in a similar situation to NBC’s in the late ’00s. The streaming service’s big turn in the sci-fi/adventure series (which NBC has been pursuing since “Lost” has had mixed results) is an adaptation of “Brave New World,” which was snubbed months after its premiere. Cancel.

But for now, its collection of original scripted material is once again defined as quirky and critically acclaimed series returning to its old ways, including the musical comedy “Girls5eva” executive-produced by “30 Rock” creator Tina Fey , and the small-town comedy Rutherford Falls, co-created by Parks and Recreation co-creator Michael Schur.

“Kill It,” starring Craig Robinson, is a hilarious satire on the shortcomings of the working class in modern society. It hasn’t really caught on yet, but if Peacock has the patience, it has the potential to become a hit.

But is it possible? The shows fit the NBC brand and are well-received on social media, possibly even winning an Emmy, given their creative pedigree. That’s not trivial, though, and they’re not the viewership drivers that Peacock needs right now.

Comcast plans to increase its spending on Peacock content to $3 billion this year and eventually to $5 billion, while it also considers expanding Peacock beyond the United States. Taking back the exclusive streaming rights to signature shows like “Saturday Night Live” should help.

So while Peacock is currently struggling, Comcast still sees it as an early stage and is still willing to double down on its investment. It’s great that the streaming service lives on in NBC’s smart comedy spirit. But how does it hedge its bets by restarting “ER”? Everyone has seen that show before.

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