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Peacock Struggles to Take Flight Amid Low Demand for Its TV Originals

Peacock has a serial TV problem and is counting on a pandemic-delayed pipeline of programming to help overcome it.

More than a year after its launch, NBCUniversal’s streaming service lacks the buzzy original TV shows of its rivals or even the fan-friendly “Star Trek” offerings of Paramount Plus, the ViacomCBS service formerly known as CBS All Access. And while top brass praised Peacock as “headed in the right direction” during Comcast’s earnings call with Wall Street analysts last week, the lack of breakthrough hits, considered key to streamer growth, suggests the service has much work to do before it becomes truly competitive with its rivals.

Craig Moffett, co-founder of Moffett-Nathanson, says the investment community has concluded “that Peacock is simply not on a trajectory to be one of the major streaming services, and that they’re going to have to do something dramatic if they’re going to change that narrative.” He adds, “I don’t think that Comcast has shown the willingness to invest in that business at anything like the scale that Disney or Netflix is investing.”

Long term, Moffett believes that NBCU will have to merge with another major company the way Discovery did with WarnerMedia. Although there’s been talk of Comcast merging or spinning off assets to combine with ViacomCBS, that could be tricky given their respective network and station group holdings. For now, the two have joined forces to distribute streaming offerings in international markets.

“I think most observers have concluded that there’s going to have to be a merger at some point,” Moffett says.

Short term, NBC will air the pilot of “Dan Brown’s The Lost Symbol,” based on the author’s best-selling prequel to “The Da Vinci Code,” next week in a bid to boost viewership. “Dr. Death,” a starry adaptation of the podcast of the same name, is Peacock’s most popular original series this year, according to TVision research, easily outpacing offerings such as “Rutherford Falls,” “Girls5eva” and “The Lost Symbol” on the service. “Dr. Death” garnered muted buzz with its July bow, while “The Lost Symbol” has barely made a ripple since its Sept. 16 debut.

“You would think that would attract more viewers,” says Colin Dixon, founder of nScreenMedia, of the Dan Brown adaptation’s performance thus far. Of the major streamers, “Peacock is the one that is having the most difficulty.”

According to Parrot Analytics, which estimates consumer demand based on data from multiple online sources, including Google searches, social media services, blogs, video platforms and piracy services, Peacock mustered only 1.6% of digital original demand share in the U.S. during the third quarter, a slight improvement from the 1.4% it drew during the prior quarter. Paramount Plus eked out 3.9%, while HBO Max, Apple TV Plus, Hulu, Amazon Prime and Disney Plus ranged from 6.1% to 8.9%; Netflix dominated with 43.7% of that metric.

“The issue with Peacock right now as it stands is that the demand for its originals is effectively nonexistent,” says Julia Alexander, senior strategy analyst at Parrot Analytics. “It’s not a comment on the quality,” she adds, it’s just that none of the offerings has fallen into the exceptional category.

NBCUniversal made a calculated decision to aim Peacock into the fast-growing world of free advertiser-supported TV channels as a zig when its rivals were zagging with a tight focus on commercial-free subscription platforms à la Disney Plus and HBO Max. That means NBCUniversal has less competition from its rivals for digital ad dollars. But to get on the radar, Peacock still needs to serve up something that no one else has, observers say.

“Peacock needs the big show to get people in, or the exclusive run of ‘SNL,’ or whatever it might be to get people into the door, and then they can start really seeing how their originals play out,” Alexander says. “Until there’s an audience, you’re just kind of pushing stuff out and hoping people show up.”

Peacock is very bullish about “Dr. Death’s” performance, though the company declines to provide any viewership numbers for it. Tellingly, during the earnings call, Comcast CEO Brian Roberts touted NBC’s “La Brea” as the best performing new show on Peacock currently. Due to Comcast’s pre-existing relationship with Hulu, however, episodes of “La Brea” are is also available on that platform, mitigating the need for viewers to stream it on Peacock. Comcast’s Hulu deal is up in January 2024, at which point NBC programming could potentially shine solo on Peacock.

Regardless what happens with Hulu down the road, analysts stress that Peacock must bolster its distinctive offerings in order to thrive. “It’s not going to work without that original programming,” says Jessica Reif Ehrlich, senior media and entertainment analyst for BofA Securities. “No service will work without that original programming.”

NBCU CEO Jeff Shell acknowledged last week that the company was behind on those productions due to COVID restrictions, but assured Wall Street that they will be ramping up soon, “which is very necessary to continue to grow.” A Rian Johnson created series starring Natasha Lyonne called “Poker Face” and Will Smith backed “Bel-Air” are among the projects in the works.

Shell declined to provide an update on the number of Peacock subscribers, saying only that the streamer gained a few million more since the company reported in July that the service had collected 54 million sign-ups and has been averaging about 20 million monthly active users. The company has yet to break down the number of paying subscribers and declined to provide additional viewership stats for this story. (“They haven’t opened the kimono,” one analyst grumbled to Variety.) NBCUniversal’s focus on “sign-ups” has also drawn grousing. NBCU defines it as consumers who signed up with an email address in exchange for access to the platform’s array of free ad-supported entertainment, news and sports content.

Analysts do credit NBCU with being ahead of the ad-supported streaming curve with Peacock. There are mixed views of its day-and-date movie strategy, although Peacock is certainly arguing that the COVID-strong performance of “Halloween Kills” at the box office last month indicates that there was no cannibalization of its theatrical fortunes.

Newly minted Peacock president Kelly Campbell, late of Hulu, may also galvanize the streamer, which is leaning into live sports programming as a differentiator. For now, what Peacock might most need is time. Building a streaming service in a pandemic isn’t easy, and it requires a hefty investment.

Comcast’s third-quarter media results include $230 million of revenue and an adjusted EBITDA loss of $520 million related to Peacock, more than double the loss in the prior year period. For the first nine months of the year, the division’s adjusted EBITA loss was $1.2 billion related to Peacock, roughly treble the amount from the year prior period.

“It was a little wobbly in the beginning,” says CFRA analyst Tuna Amobi of Peacock’s launch, “but they’re in early stages.”

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