(Bloomberg) -- In January, Kelly Campbell, president of the Peacock streaming service, assembled two task forces to plan for the 2024 Olympics in Paris: one to focus on luring viewers to Peacock during the Games, the other to make sure the newcomers stick around long after the last javelin is hurled.
With the opening ceremonies now days away, Campbell and her bosses at Comcast Corp. are confident that the Olympics will greatly elevate Peacock’s broader standing in the streaming wars against the likes of Netflix and Disney+.
“This is going to be a defining moment for Peacock,” Campbell said in a recent interview.
Over a 19-day stretch in late July and early August, Peacock will be the only place where US viewers will be able to catch every Olympic event. The service will offer thousands of hours of competition presented live, on-demand and in a series of packaged clips. All of which will be enhanced by special, high-tech features, including a morning recap of the previous day’s events narrated by Al Michaels using an AI-synthesized reproduction of the esteemed broadcaster’s voice.
For Comcast’s media division, NBCUniversal — the owner of a slate of once ascendant, increasingly imperiled cable networks such as Bravo, E! and USA — the stakes couldn’t be much higher. Viewers continue to abandon the traditional TV bundle to sift through the various streaming alternatives, looking for long-term keepers.
Over the past four years, Comcast has poured billions of dollars into Peacock with mixed results. To date, Peacock remains far behind rival products from Netflix Inc., Amazon.com Inc. and Walt Disney Co.
“There is no one that looks at the size of the streaming losses and thinks that it’s a great investment,” said Craig Moffett, an analyst with MoffettNathanson.
Olympic Redemption
To continue to justify its sizable streaming expenditures, Comcast needs to make Peacock an unqualified success sooner rather than later. The Games in Paris will provide the biggest opportunity yet for the second-tier streaming service to vault into the major leagues — not to mention, a rare shot at Olympic redemption.
In the late 2010s, when Comcast was initially preparing to dive into streaming, then-NBCUniversal chief Steve Burke saw a potential opportunity. For years, Burke had used NBC’s popular Olympics coverage to raise awareness of the network’s upcoming movies and TV shows — such as the 2014 roll-out of Late Night with Jimmy Fallon, which Burke’s crew hyped relentlessly during that year’s Winter Games in Sochi, Russia.
Comcast prepared to make the 2020 Tokyo Olympics a big coming-out party for Peacock. But before that could happen, Covid hit. The Games, it was eventually decided, would be delayed until the following summer. Nevertheless, Comcast executives forged ahead.
In July 2020, Peacock made its debut amid a flurry of major new streaming services. From the start, Peacock took a different approach than most of its peers such as Max and Disney+, which charged customers for an advertising-free experience and largely focused on high-end, scripted programming. By contrast, Peacock was free, ad-supported and stocked with less original content. (It also offered two paid tiers, one of which had ads.)
Disney’s namesake streaming service attracted a huge audience out of the gate, signing up 10 million customers in a single day. Without the Olympic springboard, Comcast took a more gradual approach. At the time, NBCUniversal hadn’t yet reclaimed the rights to the new films from its movie studio or the popular reruns from its broadcast network, which were being rented out to HBO and Hulu, respectively. The company did shift over some of its sports programming to Peacock, including the English Premier League and Motocross. Even so, sign-ups were relatively sluggish.
Because Comcast makes more than 80% of its money from cable and internet businesses rather than entertainment, unlike many of it rivals, it could afford to be patient, at least for the time being. A year later, as the Tokyo Olympics approached, Comcast leaders hoped Peacock’s big moment had at last arrived.
Instead, it was a debacle. Throughout the Games, Peacock failed to offer many of the events viewers were looking for. What was available was often difficult to find on the streaming service, frustrating customers who thought the platform would be an all-access pass to everything. In the end, prime-time nightly viewing across all of NBC’s platforms averaged just 15.5 million people, a 42% decline from the 2016 Rio de Janeiro Olympics.
“We didn’t deliver to the consumer what we promised,” said Mark Lazarus, chairman of the NBCUniversal Media Group. “We said we’d be the home of the Olympics, and we were not.”
Clawing Back
Despite the missteps in Tokyo and a limited array of programming, Peacock added paying customers more quickly than Comcast had anticipated. As it turned out, the pandemic had created a large, captive audience of homebound viewers, thirsting for novel entertainment options. Peacock was a beneficiary.
Comcast Chief Executive Officer Brian Roberts led an all-day meeting in the middle of 2021 with several lieutenants, including Lazarus, Matt Strauss and Burke’s replacement, Jeff Shell, weighing what to do next. Shell led a pitch for making a larger investment in Peacock, increasing its programming budget to pay for movies, next-day TV shows, more original series and more sports. As part of the plan, Peacock would need to focus on selling subscriptions.
Ultimately, Roberts approved, and in the three years that followed, Peacock filled out its programming menu, clawing back the rights to reruns of hit shows like Law & Order and Top Chef, and becoming the first stop for streaming new movies from Universal such as Oppenheimer. It also released several hit original series, including Poker Face and The Best Man: The Final Chapters.
These days, Roberts, a 65-year-old Philadelphia native, is expanding his company’s entertainment business with Peacock at the center. Currently, he is preparing to spend billions of dollars to land the rights to NBA games, some of which will appear exclusively on the streaming service. Between the NBA and the NFL, Peacock will feature must-have sports nearly year-round.
Following a couple of price increases to pay for all the new programming, Peacock now costs $7.99 a month. As with many major streaming services, the biggest challenge for Comcast isn’t necessarily attracting viewers, it’s retaining them. Every quarter, Peacock signs up millions of new customers, but loses an average of 6.7% every month, according to Antenna.
Over the past year or so, hoping to improve customer acquisition and retention, Comcast has released many of its most popular Peacock series at the same time as major sporting events.
In January, Peacock aired an NFL playoff game between the Kansas City Chiefs and the Miami Dolphins – the first time such a crucial sporting event was only available on streaming. The game was a huge success, becoming the most-watched live event in the history of streaming.
The same weekend as the game, Peacock released both Ted, a comedic series about a libidinous stuffed animal based on the hit movies, and a new season of Traitors, a reality series hosted by Alan Cumming. The majority of people who signed up for Peacock to watch the NFL stuck around to check out the non-sports programming too.
During the Olympics, Peacock will use the excitement in Paris to promote Fight Night, a new show starring Kevin Hart and Taraji P. Henson, as well as The Day of the Jackal with Eddie Redmayne.
“Peacock is a terrific bargain at $8 a month,” Roberts said in an interview.
The Olympics will be the culmination of a major evolution in Peacock, which helps Comcast reach most of the households that no longer pay for cable. Roberts, a competitive squash player in his youth, is a particular fan of the Olympics. “This is the moment for the world to remember the glory of what the Olympics can be at its best, which is sport, competition, sportsmanship, heartbreak and success,” he said.
Parisian Charm
Peacock had 34 million subscribers as of the end of March and regularly accounts for more viewership in the US than rivals Max and Paramount+, according to Nielsen.
Still, success in Paris is hardly guaranteed. Since the 2016 Summer Games, which averaged more than 27 million prime-time viewers for NBC, the audience has declined for the last three Olympics. The 2022 Winter Olympics in Beijing were the least-watched in prime time on NBC. Analysis of streaming data by Antenna shows that while the Tokyo Olympics gave Peacock a significant subscriber bump, many of the new arrivals quickly jumped ship.
There are reasons to believe that the coverage could perform better this time around. Evan Shapiro, a former executive vice president at NBC, said that the upcoming Olympics has some serious advantages over the Beijing Winter Games of 2022, including a less extreme time difference for US audiences and a more appealing location.
“You’ve got Paris, a global capital that everybody loves,” he said. Athletes will play beach volleyball at the base of the Eiffel Tower and compete in equestrian events near the Palace of Versailles.
NBC’s Lazarus said that the post-pandemic atmosphere will also help reinvigorate fan interest. The Tokyo Games suffered from severely restricted attendance due to Covid and organizers wound up having to pump recorded crowd noises into empty stadiums — not the most compelling arrangement for viewers.
Paris will be different. Viewership for the trials leading up to the Games is way up from previous years. “We’re going to have full stands, crowds and an Olympic spirit that didn’t exist in these last couple of Games,” Lazarus said.
(Corrects the percentage of customers lost monthly in the 20th paragraph)
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