NBCUniversal’s streaming service, Peacock, has reportedly lost more than $650 million since its introduction. Given the platform’s early success and the support of NBCUniversal, this announcement has surprised many.
When did The Peacock Debut?
Peacock, which debuted in July 2020 boasts an extensive library of material including many of NBC’s most popular shows, movies, and original productions. The platform was innovative in that it offered three distinct subscription tiers: a free ad-supported version, a premium version with additional content, and a premium version without ads.
What Happened to Peacock and Why Did It Lose Over $650 M+ Money?
Peacock’s subscriber count increased to 24 million at the end of the June quarter from 22 million at the end of March, but the company nevertheless lost $651 million over that time period.
Take a look at below tweet:
Universal’s streaming service Peacock lost $651M From April to June, expected to lose $3B in 2023.
(Via: @IndieWire) pic.twitter.com/3V5fOdFElA
— The Hollywood Handle (@hollywoodhandle) July 27, 2023
Those kinds of setbacks are, alas, par for the course. Prior quarter losses for the NBCUniversal streaming platform were $704 million ($467 million in Q2 2022). In 2023, the corporation projects that its streaming losses would “peak” at $3 billion. Thank goodness Comcast will soon be $9 billion richer after selling its Hulu share to Disney.
Since the vast majority of Peacock’s subscribers are on the more expensive “Premium” plan, the service’s advertising revenue increased by 85 percent year over year. The ad-supported plan used to cost $4.99 per month (since its inception in June 2020), but that price was increased to $5.99 in July. The previously commercial-free “Premium Plus” tier now costs $11.99.
Comcast, the parent company of NBCU, reported earnings and sales for the second quarter of 2023 that surpassed Wall Street’s estimates. The consensus estimate for Comcast’s second-quarter earnings is 97 cents per share on revenue of $30.13 billion, according to media experts. Earnings per share were $1.13 after adjustments ($1.02 without adjustments) on revenue of $30.51 billion. There was a net profit of $4.72 billion.
Brian L. Roberts, Chairman and Chief Executive Officer of Comcast, said in a prepared statement that the company’s financial results were “excellent.” He gave Theme Parks a shout-out for having their “best quarterly adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) ever.”
Who are Peacock’s Competitors?
Peacock entered a sector already dominated by giants like Netflix, Amazon Prime Video, and Disney+, so competition was fierce. These services have been spending a lot of money on original material, which has helped them get a big number of users. With the introduction of new competitors like Apple TV+ and HBO Max, the battle has heated up significantly.
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Is Peacock Spending More Money on Shows?
One of the primary costs for streaming services is the price of content creation and acquisition. Peacock has been spending heavily on original content and the acquisition of hit shows and movies in order to keep up with rival streaming services. However, the platform’s financial problems may be attributable to these high costs as well as to lower-than-expected subscription revenue.
What Next Will Happen to Peacock?
It would be premature to give up on Peacock at this point, despite the heavy losses. It’s probable that NBCUniversal will keep pouring resources into the platform, with an eye toward expanding its content offering and even adjusting its pricing structure. The platform’s success or failure in the streaming business in the next months will be key.
Financial difficulties at Peacock highlight the difficulties in the streaming market. Expenses are rising and profits are elusive for many platforms as they battle for viewers’ attention. How Peacock responds to these difficulties and finds its place in the increasingly competitive streaming industry is yet to be seen.
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