Last week, NBCUniversal unveiled the money-making apparatus behind its upcoming streaming service, Peacock. Not surprisingly, NBCU has an ambitious advertising initiative to ensure its bird takes flight.
But the introduction of Peacock isn’t significant because it’s introducing a bunch of new NBCU ad formats into the wild. Instead, it marks a major entrant into the world of ad-supported video on demand (SVOD). While the world of streaming is largely dominated by non-ad-supported giants such as Netflix, HBO, Disney Plus and Amazon Prime, the SVOD world has scant few participants.
There’s Disney-owned Hulu and the much smaller Tubi and PlutoTV, which is now owned by Viacom. And now we have NBCU’s latest flex with Peacock.
But will the economics work out? It takes a lot of investment to market and support a major streaming service, and with lighter ad loads (five minutes per hour of programming), will Peacock be able to make the financials work, even with a five-year runway before it expects to turn a profit?
Tune in to stay on top of the debate.
Of course, we can’t have a discussion about streaming without including Netflix. The OG streaming media service missed its subscription goals in its latest earnings report, but lest you think Netflix will capitulate to advertiser dollars, CEO Reed Hastings would like to state otherwise.
During the company’s year-end earnings call, Hastings made the case against advertising and why Netflix would never go down that path. Famous last words? There’s disagreement within AdExchanger on whether that’s the case.