NBCU’s Peacock Takes Flight, But Can It Soar Without Amazon and Roku?

Author

Michael Beach
July 15, 2020

Key details for Peacock:
1) Launching today
2) 20K hours of content on Peacock Premium (≈ 50% w/ free tier)
3) 600 movies + 400 TV series
4) 1K+ staff

Peacock is launching w/ three pricing tiers:
1) Free – Ad-supported w/ limited programming
2) Premium ($5) – Ad-supported w/ access to a larger content library
3) Premium Plus ($10) – Full access to programming + ad-free

Ad minutes per hour, according to NBCUniversal:
1) Linear TV – 16 – 20
2) Digital video – 8
3) Peacock – 5

Quick math on the advertising model for Peacock:
1) Ad minutes/hour – 5
2) 30s spots/hour – 10
3) Ad revenue/user/month – ≈ $5.20 (see below)
4) CPM $ – ≈ $30
5) $/spot – $0.03
6) Spots/month – 173
7) The service hits the revenue target at 17 hours/viewer/month

Quote from Linda Yaccarino – Chairman, Ad Sales and Partnerships @ NBCUniversal:“We sell our inventory as one platform, so it’s linear TV and digital together.  The distinction between the two seems so yesterday.”

The dispute: Peacock will launch without Amazon or Roku due to a dispute around distribution terms, including the share of advertising that Amazon/Roku will be able to sell.  For example, Roku is reportedly asking for 30% of inventory, while Peacock is pushing for 15%.

Projected hours/user/month for ad revenue goal (% increase) for Peacock:
1) 0% advertising split – 17
2) 15% advertising split – 20 (↑ 18%)
3) 30% advertising split – 25 (↑ 25%)

Peacock financial estimates by 2024:
1) Accounts – 30M – 35M
2) Monthly revenue/user – $6 – $7
3) Total revenue –  $2.5B

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