Peacock Has Promise, but Streaming Service Could Take Time to Spread Its Wings

The biggest takeaways from NBCUniversal’s investor day

jimmy fallon
One of Peacock's most intriguing features is offering subscribers early access to episodes of The Tonight Show Starring Jimmy Fallon and Late Night With Seth Meyers. Virginia Sherwood/Peacock
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NBCUniversal finally took the wraps off Peacock at its investor day Thursday, sharing details about the streaming service’s pricing (a three-tiered structure, ranging from $0-$10 monthly), launch date (an April 15 soft launch for Xfinity subscribers, July 15 nationally) and advertising (several new ad formats and a handful of brand sponsors).

While the presentation was informative and entertaining—much like at NBCU’s upfront events, there were appearances from top talent like Jimmy Fallon, Seth Meyers, Tina Fey and Lester Holt—it also raised new questions about Peacock and how it will stack up against established and upstart streaming services like Netflix, Hulu, Disney+ and HBO Max.

Here’s our top takeaways about Peacock coming out of investor day—and why the service will likely take longer to spread its wings than other streaming rivals.

Free? Not exactly…

The biggest investor day theme was Peacock’s price: free. The point was driven home throughout the presentation with lines like “free as a bird,” “the best things in life are free,” and “the low, low price of free.” Here’s one they left out: “You get what you pay for.”

The Peacock Free tier is more like Peacock Lite: It contains only half the library of Peacock Premium (which costs $5 a month; the ad-free version is an additional $5 on top of that), with only “select” episodes of the top-tier stuff like original Peacock series and tentpole library shows like The Office. It calls to mind Hulu’s free tier before that company moved to a subscription-only model in 2016.

Of course, NBCU wants Peacock Premium to become a free product, which will already be the case with Comcast video and broadbrand-only subscribers, and Cox subscribers (24 million in all). NBCU chairman Steve Burke said he hopes to convince other cable companies to also offer Peacock Premium for free; if he’s unsuccessful, he’ll pursue something like Verizon’s deal to offer Disney+ free for a year to some of its subscribers, which he called “a very attractive model.” Peacock’s future could hinge on how many of those Peacock Premium deals the company is able to make, as Peacock Free doesn’t look to be an enticing enough offering on its own.

The future of streaming looks at lot like… linear

Unlike many other SVOD services, Peacock will try to replicate the experience of watching linear TV. The service will be “always on,” and video will begin playing as soon as viewers turn on the app, which will help it entice “lean back” viewers who just want to crash in front of the TV and aren’t sure what they want to watch (which NBCU says is 35% of all viewers).

In addition to its on-demand offering, NBCUniversal will be “creating dozens of linear channels” for Peacock, said Peacock chief Matt Strauss, including live news, Law & Order and Family Movie Night, describing it as “like a channel on steroids.” The format looks very similar to free ad-supported streaming services like ViacomCBS’ Pluto TV, which currently boasts 250+ channels.

While the approach may serve as comfort food for TV grid devotees, the “always on” approach could be off-putting to those who prefer to make their own decisions about what to watch.

The July delay could be costly

For months, Peacock has been touting an April launch, the same month as Quibi’s rollout, and a month ahead of WarnerMedia’s HBO Max debut. But it turns out the April 15 premiere will be more of a beta test, with only Xfinity X1 and Flex customers receiving “early bird access.” The national launch now won’t occur until three months later, on July 15, two months after HBO Max and a full eight months after Apple TV+ and Disney+ hit the market. That means Peacock will be bringing up the rear among major streaming services, which will make standing out in the space much harder than if it had stuck to its original April plan.

Look out, Hulu and Xandr

Given that only a handful of major SVOD services are ad-supported—including Hulu and CBS All Access—NBCUniversal execs were not shy about seeking the biggest piece of the ad-supported streaming revenue pie.

The company rolled out its ad strategy for Peacock featuring several new ad formats and a list of Peacock sponsors—including Unilever, Target and State Farm—who “have committed hundreds of millions of dollars to advertise on this platform long-term,” said chairman of advertising and partnerships Linda Yaccarino. While she didn’t mention any ad-supported rivals by name, she threw down the gauntlet with plans to shake up and elevate the space.

She noted that Peacock “will have the lightest ad loads in the entire industry” at no more than five minutes per hour, and will also be “setting an entirely new standard for frequency caps” to ensure that viewers don’t keep seeing the same ads. Peacock’s ad formats will include binge ads and pause ads, and while Yaccarino allowed that others also offer them (namely, Hulu and Xandr), she vowed to “dramatically improve them” while creating several new ad formats “that will set it apart from anything else in the market.” For marketers considering the ad-supported streaming space, their options just got a lot more intriguing.

Hulu could be facing a content shortage in 2022

In addition to the new advertising competition, Hulu could lose a portion of its library to NBCUniversal in 2022. Burke said that under the terms of its agreement last May giving Disney operational control of Hulu, Comcast has the right to remove all its content from that streaming service in two years if it so chooses. While Burke isn’t ready yet to declare whether or not that will occur, it does seem that NBC’s days on that site providing next-day access to its shows (which will also be available on Peacock) could be numbered.

And Hulu’s new partner FX is under the gun as well. Burke said NBCUniversal will be “taking back the FX window” for linear and streaming rights to several of its movies as Peacock intends on ultimately being the home to “every single movie made by Universal.” As FX becomes more integrated into Hulu, the move seems likely to dent Hulu’s library and FX’s linear offering, which relies heavily on theatrical movies.

Peacock’s library content is great…

In addition to poaching The Office and Parks and Recreation from Netflix (where The Office was the most-streamed show last year), some of TV’s biggest shows, including six hits from Dick Wolf, will be making their streaming debut on Peacock: Law & Order and its spinoffs SVU and Criminal Intent, along with all three of his Chicago series (Med, Fire and P.D.).

The company will also be the exclusive streaming home to a pair of shows produced by rivals: Two and a Half Men (from Warner Bros TV) and Yellowstone (from Paramount TV). Other beloved shows available on Peacock include Saturday Night Live, Friday Night Lights, 30 Rock, Everybody Loves Raymond, Brooklyn Nine-Nine and Murder, She Wrote. A streaming service is only as good as its library, and Peacock will have a robust one.

…But the original lineup isn’t there yet

When it comes to original shows, however, Peacock has a lot of ground to make up. At the investor day, it announced new projects from big names like Tina Fey, Amy Poehler, Mindy Kaling and Kevin Hart, but those shows are all a long way from being ready for air. Tellingly, sizzle reels for several upcoming Peacock shows didn’t include any actual footage, indicating that production hasn’t yet started or is only just under way; only its adaptation of Brave New World seemed truly ready to air. Peacock might eventually have an original content slate on par with other streamers, but it’s not there yet, and the first wave of its original shows could be underwhelming.

Getting the jump on linear

One of Peacock’s most interesting offerings—which sets it apart from other streamers—is giving users early access to several shows before their linear premieres. NBC’s late-night shows will stream on Peacock more than three hours ahead of their NBC airings (The Tonight Show Starring Jimmy Fallon at 8 p.m. ET; Late Night With Seth Meyers at 9), and during the Summer Olympics will feature live coverage of the opening and closing ceremonies long before their usual time-delayed airing in NBC primetime.

Peacock will be a bigger threat in 2021 than 2020

Many of the above points lead to an overall theme: Peacock won’t come out of the gate with the same heft as some of its rivals, and will take a bit longer to build up steam. Next-day access to NBC shows will be less vital in July, when Peacock has its national rollout and most scripted series won’t be airing. NBCU made sure to include The Office multiple times in every sizzle reel about the service, but that won’t arrive from Netflix until 2021, the same year that many of its new projects will start seeing the light of day. So while Peacock’s initial July lineup could be disappointing compared to other services, the offering should be much more robust the following year.

Who needs linear?

Assuming that Peacock does eventually live up to NBCU’s lofty expectations, the streaming service might also end up hastening the demise of the company’s linear networks. At the investor day, CNBC’s Becky Quick said, “Peacock will be the place where audiences go to get smarter”—but isn’t that supposed to be CNBC’s role? NBCUniversal’s press release for the service noted that “Peacock will offer consumers everything fans love to watch, all in one place.” If that’s true, then why bother with linear, and specifically NBCU’s linear offerings?

The answer is that NBC will still offer live sports, but for those consumers who don’t want to watch the NFL, Peacock might suffice, as well as making it easier for those on the fence about cutting the cord to bid linear farewell. Certainly streaming is the future, and the present, but by putting so many of its eggs in the streaming basket, NBCU is in essence giving viewers less of an incentive to watch its linear networks.

@jasonlynch Jason Lynch is TV Editor at Adweek, overseeing trends, technology, personalities and programming across broadcast, cable and streaming video.