The Peacock of Comcast Needs to Think Bigger

The Peacock of Comcast Needs to Think Bigger ...

Comcast disclosed that its streaming service Peacock had 28 million subscribers, 13 million of whom are paying customers, in its first quarter of the year.

It disclosed that it had 27 million subscribers in the second quarter of 2022, 13 million of whom are paying customers.

So clearly, subscriber growth is flat right now. Comcast (CMCSA) - Get Comcast Corporation Class A Common Stock Reportexecutives attributed much of that growth to sporting events such as Super Bowl LVI and the Beijing Winter Olympics, both of which were streamed on the service. Unfortunately, they don't happen every quarter.

Why is Peacock's growth so sluggish, especially compared to Disney + (DIS)'s triple digit subscriber growth? Read The Walt Disney Company Report and Netflix (NFLX)'s report.

The increase in streaming services is a big part of it, and Disney and Netflix just have a more established brand name.

Peacock's original programs, which are, to be clear, excellent on the whole, aren't exactly what Comcast needs right now.

Peacock's History (A Brief History)

All of the traditional television networks discovered that Netflix had become a major competitor to their businesses, primarily because to affordable access to their television and film back catalogs.

As younger millennials turned some of their titles into monster hits for Netflix, the programs Friends and The Office became much more popular than any of NBC's then current sitcoms.

With Vulture asking the question Is Friends still the most popular TV show? On her Grammy-winning debut album When We All Fall Asleep, Where Do We Go, Billie Eilish sampled dialogue from an Office episode and put it to a beat.

To avoid this sort of thing, you'd have to be asleep at the wheel.

Peacock was a successful and disappointing launch in the summer of 2020. The bad news was that people were more afraid for distractions than ever before, and plenty of viewers were willing to sign up for a free, advertiser-supported service to see some old movies.

The bad news was that due to the COVID-19 epidemic, the live sporting events Peacock was relying on as audience drivers were halted, including the Tokyo Olympics. NBC also was unable to produce new episodes of popular 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 small handful of original content for most of 2020.

NBC News is the network that airs shows every week.

Peacocks Have a Plan for the Future

Peacock is an evolution of NBC, which, at the risk of being very reductive, has always had a two-prong strategy.

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The NBC's official brand for its programs has long been smart and quasi-metropolitan, which usually meant urban crime procedurals such as the Law & Order franchises, or sitcoms about neurotic individuals who live in big cities, such as Seinfeld, Frasier, and Friends.

Devices such as TiVo, the explosion of internet piracy, the proliferation of DVD box sets and iTunes selling episodes of television, and increased cable competition all began to eat into network televisions' bottom line.

NBC was seemingly incapable of launching new, broadly appealing mainstream hits by the end of the decade, other than spin-offs of its Law & Order franchises releases.

Instead, the network became filled with quirky sitcoms such as 30 Rock, Community, and Parks and Recreation, all of which were critically acclaimed programs that never translates into big ratings for NBC. However, the networks did continue to renew their programs, partly in an effort to license content to streaming services.

The most cynical critics (or television executives) might think that being clever and artistic is a great way to bog down your audience's heads and get your program canceled, but this isn't the case.

What is true is that smart, funny programs do require a bit of breathing room to attract their viewers, as they often lack the more eye-catching narrative hook of, say, a show called American Ninja Warrior.

Over time, quality sells itself. Clever programs such as Seinfeld and The Office were little watched, but later became integral to the networks' 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 now Galentine's Day is an unofficial holiday.

NBC hid its best by including broad appealing, populist programming, such as Saturday Night Live, The Tonight Show, and spectacle-driven TV programs like The Blacklist.

History Remains

Peacock is right now in a similar situation as NBC was in the late '00s. The streaming services took a big swing at a sci-fi/adventure series (something NBC has been chasing with mixed results since Lost) adaptation of Brave New World, which was canceled months after its premiere.

But at the same time, its collection of original scripted material is defined by, again, funny and critically acclaimed series that harken back to its old habits, such as the musical comedy Girls5eva, which is executive produced by 30 Rock creator Tina Fey, and the small-town comedy Rutherford Falls, which is co-created by Parks and Recreation co-creator Michael Schur.

"Killing It" is a funny satire about modern society's working class. It hasn't been officially implemented yet, but the potential for it to become a hit, if Peacock can afford to be patient.

Can it, anyway? These programs complement the NBC brand, have found a warm following on social media, and may even win Emmys, given their creative potential. However, these aren't the ratings drivers Peacock is looking for at the moment.

Comcast hopes to spend $3 billion on Peacock content this year, and may then go up to $5 billion, all while considering expanding Peacock beyond the United States on a country-by-country basis. Reclaiming exclusive streaming rights to signature shows such as "Saturday Night Live" might be helpful.

Comcast continues to view Peacock's difficulties as early days and is willing to double down on its investment. It's wonderful that the streaming service continues to grow in NBC's spirt of smart comedy. However, how about it rebooting "ER"? Everyone used to watch that program.

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