1. Peacock Seeing Double-Digit Churn

In addition to its many other woes, NBCU’s Peacock service now has the dubious honor of having the highest churn rate in the industry as per a recent report from Kantar.

While the actual churn rate is not all that high—just 13%, compared to Netflix’s industry low 4%—the optics are not great.

Why It Matters

Peacock, which is central to Comcast/NBCU’s future strategy, has struggled to get off the ground.

They were blindsided by the pandemic, which resulted in the cancellation of the 2020 Olympics, which was going to be their opening salvo. To salvage that, they offered Peacock for free, which was a good idea in that it had more and better content than other FASTs, but they didn’t do a great job of following up and getting free members to sign up for the paid version.

That came to a head during the Olympics when many free Peacock subscribers reported being surprised to learn they actually had to pay to watch certain events which created some negative buzz.

OTOH, this is likely a short term problem. 

Churn is somewhat high because people signed up to watch the Olympics and weren’t interested beyond that. But 87% decided to stay, which is not a bad thing.

Peacock has a new president coming on board, Hulu’s Kelly Campbell and she has an opportunity to have a real impact, especially in terms of programming choices and direction.

More than that, NBCU is very committed to Peacock and is launching it internationally, seemingly in conjunction with its Sky property and with ViacomCBS where possible.

So really all they need are a couple of hit shows and more of an identity. Much easier said than done, of course, but achievable nonetheless.

This, as many others have pointed out, puts them on more solid footing than Hulu, whose future as a standalone service still seems to be up in the air. (While Hulu is doing well and making money, there doesn't seem to be a whole lot of justification for keeping it separate from Disney+ and ESPN+ long term.)

So there’s that too, which is likely why Campbell made the move. 

What You Need To Do About It

If you’re Peacock, remember when some anonymous creative type slammed Apple TV+ as “expensive NBC.” And then Apple went on to win Emmys for both The Morning Show and Ted Lasso. 

So maybe “expensive NBC” isn’t a bad thing after all. Especially if you want a mass audience.

If you’re the rest of the industry, don’t write Peacock off just yet. I will avoid making any sort of peacock/phoenix pun, but with Comcast doubling down on the service, I suspect a comeback is a distinct possibility and that lots of money will be spent to ensure that actually happens.

2. HBO Undercuts Netflix In Europe

As the international race heats up, HBO made the unusual move of pricing its European Max service at a lower price point than rival Netflix, at least at launch. While it seems unlikely Netflix will attempt to match this, it does signal that Discovery Warner means business and is going to attempt to use a form of bundling to capitalize on its strong name recognition and brand identity in the region. (HBO has been in Europe for 30 years.)

Why It Matters

The rollout is happening (initially) in Sweden, Denmark, Norway, Finland, Spain and Andorra, a tiny nation of just 77,000 people that sits in the Pyrenees Mountains between Spain and France and is governed by two princes, as immortalized by the 1991 Spin Doctors hit. (Okay, not really, but it does have two princes.) 

What’s notable here is that the low prices are due to a first-year deal that gives viewers 12 months for the price of eight. 

In my country, we call that a “bundle” and it is likely to be where things are heading as all the Flixes spin out overseas: rather than give viewers the chance to churn, established players like HBO are going to offer attractively priced first-year bundles that will help lock viewers into place before they can be picked off by newer entrants.

It’s an old school cable TV trick, but it works because everybody loves a bargain.

Especially Andorrans.

HBO also announced that Warner movies would be available for viewing in Europe 45 days after their theatrical release. (HBO has a similar plan in place for Asia) and provided more details on upcoming sequels/prequels to Sex and the City and Game of Thrones. 

Which is yet another trend we’ll continue to see from the Flixes: the rebooting of popular legacy series.

This is a very smart move as it allows networks like HBO to take advantage of their existing strengths--popular series that still have great name recognition and a built-in audience, both of which can be relied upon to help attract subscribers.

It gives them a leg up on Netflix, which will need to keep rolling out “net new” series and figuring out a way to create enough buzz around them that they turn into hits. A far more challenging proposition than creating buzz around a return to Westeros.

What You Need To Do About It

If you’re HBO, well done. You will get much press about how the new HBO Max service is cheaper than Netflix, even if it is only for the first year. The bundle thing makes sense too, especially for HBO, as most consumers are used to signing up for it for a full year as part of their full on pay TV service.

Another high five for bringing back some of your greatest hits. You’re trying to reach a new audience while holding on to the old one at a time when there are way too many new series, which means familiar names are going to be a huge, huge, huge  bonus.

If you’re one of the other Flixes and you have not launched yet you can go the same route as HBO and offer a full year option to lock people in...or you can make the fact that you offer month-to-month subscriptions a differentiator and position it as a consumer-friendly option.

Or you can do both--offer a full year bundle for people who are sure they want the service and a well priced monthly subscription for those who like to keep their options open and reap the best of both worlds. 

Sort of like having two princes.

If you’re Andorran (or Scandinavian) then rejoice! HBO Max is a well done service with some really good new originals that feel true to the OG HBO. So plenty to keep you occupied during those long winters.