With the Summer Olympics postponed until 2021, Comcast’s NBCUniversal has to get creative with the upcoming launch of Peacock.
Peacock, NBCUniversal’s streaming service slated for an initial launch in April, is the first major streaming launch in years aimed at blending advertising and subscription revenue. But a major keystone of its launch plan -- the Olympics -- doesn’t exist anymore, leaving the company to retool its strategy in the span of a few short months.
“Would the Olympics have driven some additional sign-ups? Of course,” said Dan Rayburn, analyst at Frost & Sullivan. “The promotion across all their channels is really what they’re missing out on.”
At an investor presentation in January, executives at NBCUniversal and Comcast, its parent company, described a service with broad appeal and the promotional machine needed to ensure its success. After an initial launch to Comcast subscribers in April, Peacock's three total tiers -- a free version, a $5 version and a $10 version all with varying levels of ads and content -- would roll out to the general public in July alongside NBC's coverage of the Summer Olympics.
For Peacock, the Olympics' absence leaves a void both in programming and marketing value.
"There's no doubt that the Olympics are one of NBC's biggest properties since they dished out $7.7 billion for the U.S. broadcast rights through 2032," said Chris Chavez, a Sports Illustrated editor who covers the Olympics.
In an increasingly crowded streaming market -- NBC will compete with Netflix (NFLX) - Get Report, Disney (DIS) - Get Report and Amazon (AMZN) - Get Report, among others -- Peacock aims to stand out, in part, by offering a semi-linear viewing experience that mirrors the way people watch traditional television.
The Olympics had been planned as a prominent "channel" within Peacock, offering live programming alongside a slew of original documentaries, highlights and other popular content. A typical Olympics opening ceremony, for example, has drawn tens of millions of viewers in recent years. Peacock will also feature news channels, Spanish-language programming and a wide array of original and library content from NBC's media brands.
In January, NBCUniversal executives described the Olympics as part of a 17-day advertising bonanza for major marketing partners it signed on for the Peacock launch.
"[Marketing partners] will be in front of over 250 million viewers nationwide and they get to tap along with us into the magic and the power and the emotion that are the Olympic Games," said Linda Yaccarino, chair of advertising & partnerships. Its sponsors for the Peacock launch include Target, Unilever, State Farm and several others, who collectively committed hundreds of millions' worth of ads to the planned launch.
NBCUniversal is targeting between 30 and 35 million active accounts by 2024; after that, Peacock is expected to generate “significant and growing profitability" by company executives.
NBCUniversal says that, for the time being, it hasn't adjusted any of those targets based on the absence of the Olympics or potentially other sporting events it had planned on broadcasting on Peacock in the coming months, such as Premier League soccer.
Apart from sports cancellations, the media environment has also changed drastically with the onset of coronavirus, as millions of people in the U.S. and elsewhere stay home and binge watch Netflix and other services.
Rayburn noted that a wide variety of apps have reported a surge in downloads or traffic recently as consumers look to broaden out their options for home entertainment. And Peacock, too, could stand to benefit from heightened demand for streaming in the coming months.
With the Olympics gone, NBCUniversal is working up a new plan to fill the void, in part, with "familiar and nostalgic" programming with broad-based appeal, a company spokesperson told TheStreet.
NBCUniversal's media properties include Universal Pictures, DreamWorks, NBC Universal television, and a variety of cable networks and other media brands.
In addition to Olympics and news coverage, NBCUniversal also spotlighted the perennially popular Law & Order, Parks & Recreation and The Office, the latter of which is believed to be the most-streamed show on Netflix. All nine seasons of The Office will begin streaming on Peacock exclusively in 2021.