What to Expect From Peacock, as NBCUniversal’s New Streamer Debuts Nationally

From a light ad load to a free programming tier

NBCUniversal hopes Peacock will one day rival the scale once promised by traditional TV. Kacy Burdette
Headshot of Kelsey Sutton

Key insights:

Peacock is finally here.

The ad-supported streamer from Comcast-owned NBCUniversal makes its national debut on television screens around the country today. The arrival of the service, the lowest tier of which is free, marks NBCUniversal’s first big push to capitalize on consumers’ accelerating shift away from linear television while carving out a space for advertisers hungry to pounce on premium video inventory when many television and film offerings have remained on ad-free subscription services like Netflix and HBO Max.

The free tier of Peacock, which the company has featured heavily in its marketing in response to the ongoing economic effects of the Covid-19 pandemic, offers more than 13,000 hours of programming, including a deep library of TV shows and movies alongside news programming, live sporting events like soccer’s Premier League, and Spanish-language content.

Peacock Premium, which will cost most consumers $4.99 a month (it’s free for subscribers to Xfinity broadband or internet, and Cox broadband), comes with an additional 7,000 hours of programming, including next-day episodes of current seasons of NBC shows like Saturday Night Live and access to a modest lineup of originals like the drama Brave New World.

There’s also an ad-free tier, which costs an additional $5 a month for consumers who want to opt out of most advertising on the service. (There will still be some ads that run during live news and sports streams.)

Peacock will be available today on Apple and Android devices, Chromecast devices, smart TVs including Vizio and LG, and gaming consoles like Xbox and Playstation 4. Like rival streamer HBO Max, Peacock will not be available on Roku or Amazon Fire devices on launch day; it’s unclear when those distribution deals might be struck.

Matt Strauss, chairman of Peacock and NBCUniversal Digital Enterprises, said he’s looking to strike additional distribution deals to bring the ad-supported tier of Peacock Premium to more consumers for no cost in the coming months.

A rare opportunity for advertisers

For NBCUniversal, Peacock’s premiere marks the beginning of a long journey to continue building out a service that will hopefully attract enough viewers to keep advertisers interested. The goal is to bring between 30 million and 35 million monthly active users onto the service by 2024. It’s a high bar, but executives like Strauss are coming off of a three-month beta test that they said has exceeded early expectations and are feeling confident that the service will resonate.

"We believe that the pendulum is shifting towards consumers looking for affordable choices in the market when it comes to streaming."
Matt Strauss, chairman, Peacock and NBCUniversal Digital Enterprises

“We’re executing what’s admittedly a different approach from what others have taken, but this is where we see the white space opportunity in the market,” Strauss said. “We believe that the pendulum is shifting towards consumers looking for affordable choices in the market when it comes to streaming, and we believe that advertisers are seeing that audiences are shifting over to streaming and are looking for more premium outlets to participate. We’re playing a different hand, and we think this one plays to our strengths.”

In addition to movies and TV series, which Strauss said were “table stakes” for a streaming service, Peacock is hoping to stand out with more traditional television offerings made up of news and sports programming, similar to other AVOD platforms like Pluto TV. It’s an attempt to replicate the lean-back television experience on linear, where viewers switch on a channel and sit back instead of hunting for the right program to watch on-demand.

True to that, the Channel section of Peacock allows viewers to tune into preprogrammed streams, much of it news and sports; that will provide additional ad opportunities, as well as a chance to show off programming from NBC News, MSNBC and CNBC. There’s also a Trending section where highlighted programs are recommended (some with Rotten Tomatoes ratings displayed onscreen), and a Browse section that offers up a more traditional video-on-demand environment.

The overall ad experience within Peacock’s ad-supported tiers will be light: Viewers will see a maximum of five minutes of advertising for each hour of programming they consume, a huge slash in ad loads that Linda Yaccarino, NBCUniversal’s chairman of advertising and partnerships, told Adweek will help set the stage for the “future of advertising.”

The company is testing ad formats and looking for ways to keep the ad experience engaging for consumers, which relies on commitment from its 10 launch sponsors to try different approaches. Those sponsors, which include companies like L’Oreal, Molson Coors, Subaru and Unilever, have provided Peacock with 85 pieces of marketing creative, part of which is driven by a requirement that each brand advertised must provide a minimum of three pieces of creative, said Krishan Bhatia, evp of business operations and strategy for NBCUniversal’s advertising sales division.

Creative may range from traditional 15-, 30- and 60-second ads to shorter bumper spots between 6 seconds and 10 seconds each; Bhatia said one long ad and one short ad often work well when paired together. There are also ads that take different forms based on the streaming experience.

Some of the ad formats on Peacock include pause ads, which display when viewers pause programming; trending ads that appear in a Trending section on Peacock’s home screen; and binge ads, which offer a fourth episode ad-free from a sponsor after a viewer watches three episodes of a show in a row.

Early success, and what’s next

Advertisers have already come away with some learnings from a three-month beta test of Peacock for certain Comcast Xfinity customers starting in April. Solo ads, which give a viewer fewer advertisements over the course of an episode on behalf of a sponsor, have led to 33% higher starts per visit and resulted in higher time spent on Peacock per visit, Bhatia said, which means Peacock is working on putting more solo ads in rotation.

Peacock is also working on a cinematic format for certain movies, where three minutes of trailers and ads play before a movie streams otherwise ad-free; there’s also work on voice-activated ads that work with a special remote that Xfinity X1 customers have in their homes. Five out of the 10 launch sponsors have signed on to test out that format.

“We’re not trying to dictate to marketers what each format is that they should employ,” Bhatia said. “We just want to ensure that we offer that level of diversity when it comes to creative, and that we’re not dogmatic in that it has to be this or that length. We want [advertisers] to have a broad canvas.”

During launch week and onward, the company will be paying attention to monthly active users and time spent viewing on the platform, metrics that will be crucial to keep the advertising community satiated. Four more originals will roll out in August and September, and the service is eagerly anticipating the 2021 arrival of comedy The Office, which remains one of the most-watched shows on Netflix.

The eventual goal, with the programming offerings and minimal advertising load, is to be able to replicate the scale and reach that traditional linear television has long been able to promise for advertisers.

“Scale is tantamount,” Bhatia said. “Advertisers want to reach mass-market audiences, and historically the television ecosystem at NBCUniversal in particular has been one of the best—if not only—ways to do that. We hope we can do that with AVOD streaming going into the future.”

@kelseymsutton kelsey.sutton@adweek.com Kelsey Sutton is the streaming editor at Adweek, where she covers the business of streaming television.