Week In Review: NBC Reveals Its Peacock Feathers, Hulu Adds Even More Cool New Ad Products

1. NBC Reveals Its Peacock Feathers

NBC finally released details of its Peacock service and the good news is it sounds like The Way You’d Configure Network TV If You Were Designing Something For 2020.

In other words I’m not sure why anyone would actually tune into linear NBC other than perhaps habit or boredom.

But we’ll circle back to that in a minute.

The key thing about Peacock is that it will limit itself to just five minutes per hour of commercials. Which is less than one-third of what you’ll find on NBC now, where commercial breaks can eat up as much as 16 minutes of every hour.

In other words, a very very noticeable lessening of the ad load.

In addition, NBC is going to use many of the fancy new advertising units that Hulu rolled out, helping to make said fancy new advertising units more ubiquitous. (More on that shortly too.)

For consumers, there will be a $10/month ad-free version, a $5/month ad-supported version and a free version, though if you’re a Comcast or Cox subscriber you get more stuff for free and the free-free version sounds a lot like a FAST, which means it's a great opportunity for NBC to try and upsell you by frequently showing you previews of Really Good Shows You Can Only Watch If You Upgrade.

Because, well, why not? You’re a captive audience and the service is free.

Why It Matters

NBC’s plan makes a lot of sense and should not alienate MVPDs That Aren’t Comcast. This is a win for them, especially since HBO Max still hasn't figured out a way to do something similar with MVPDs That Aren’t AT&T.

HBO’s situation is much trickier than NBC’s because they have a premium product that people pay $15/month for, one that many MVPDs use as a loss leader to attract new customers. (“Get three free months of HBO when you sign up now!”) whereas nothing NBCU sells costs extra.

How HBO transitions the close to 40 million people who HBO from their MVPD over to Max without majorly pissing off said MVPDs is bound to be one of the most interesting things to watch as the Flixcopalypse plays out, and TBH, we’re not really sure how they’re going to do it.

Then there’s the ad load thing.

Clearly NBC is banking on the fact that at some point in the not too distant future, all of NBC is going to be watched via some form of Peacock because who'd want to sit through 16 minutes of commercials when you could watch the same shows with just five?

Part of that decision is likely due to NBC realizing that digital isn't winning and that brands attach great value of TV advertising as that there is no alternative in terms of reaching a mass audience with an emotionally powerful message, and so brands will pay the same, if not more money for the five minutes Peacock is offering them as they did for the 16 minutes they can get with linear NBC now.

(Added bonus: since Peacock and similar are digitally delivered and subscription-based, the Flixes get to take advantage of a world of viewer data.)

Now “not too distant future” may mean ten years—change happens very slowly in TV—but we think it will happen as all the major network groups launch their own Flixes (Discovery is on track to launch one it seems) and so we'll basically get a better version of what we have today, with bundles made up of various Flixes rather than 600 channels, half of which are just the HD versions of identical SD channels.

The good news is that the new ecosystem, with fewer better targeted ads that brand will pay more money for, should be something that makes everyone happy, consumers in particular.

Something to look forward to.

What You Need To Do About It

If you’re a brand or agency, look into Peacock and their ad offerings. Chances are high you can still get a good deal and it’s a good way to play around with advanced ad format, especially if you combine that buy with one on Hulu.

That, and you don’t need a study to prove that being one of two ads in a pod is more effective than being one of eight ads in a pod. (Though I have no doubt there is a study out there somewhere that proves it.)

If you’re NBC, take a bow—you  seem to have figured this Peacock thing out and adding in your own FAST was a particularly clever move, because of all the upsell and incremental audience opportunities it brings you.

If you’re an MVPD, see if you can negotiate some kind of a deal with Comcast similar to the one Cox got. Seems like an easy win and you can use it to create more loyalty, something that’s going to matter big time a few years from now when 5G (and competition) becomes real.

2. Hulu Adds Even More Cool New Ad Products

Hulu, which already gave us pause ads and recently added “binge ads” (after three episodes, the sponsor brand allows the viewer to continue watching ad-free) is going to introduce a bunch more formats to its nontraditional ad offering, including ads that let consumers follow up online via QR codes and ads that give consumers a chance to choose which of a brand’s ads they want to watch (self-targeted addressable?)

Why It Matters

Hulu’s ad chief Peter Naylor says he want to make at least half of their inventory “advanced” this year, giving advertisers a wider range of choices that take advantage of Hulu’s position as the OG premium ad-supported OTT service.

The fact that Hulu, which is now fully owned by Disney, is going to be joined in OTT-land by NBCU’s Peacock, which promises to have similar advanced ad units like pause ads, means that the entire advanced advertising unit ecosystem gets more scale, which in turn makes it easier to buy and sell and for brands to put more production money behind their advanced spots.

To that end, Hulu’s launched a creative services division called “Greenhouse” that is helping to develop these new ad units, both from a theoretical point of view (what sorts of units should Hulu be developing?) and a more practical one. (What do the new units look like? How can Greenhouse help brands to create them?)

That’s good news for brands, who are looking for ways to move beyond traditional interruptive advertising on TV while still retaining the benefits of TV advertising (emotional impact, reaching audiences at scale.)

It’s also a way to ensure that we don’t wind up in the land of 15,000 Merits, where people who can afford to buy their way out of having the see advertising gladly do so. Because if the advertising isn’t painful and it’s brief (like Hulu’s 90-second ad break brief) then many more viewers will be content to sit through it.

Now if they could only do something about all those Pharma ads….

What You Need To Do About It

If you’re an agency or a brand, you need to check out what Hulu is up to and start spending some money on those advanced ad units. This is the TV of the future and you don’t went to be the stodgy old brand that still runs 1990s style commercials.

If you’re Hulu, keep innovating.

If you’re one of Hulu’s competitors—don’t be afraid to copy them and “yes, and” them by creating your own advanced ads—the more inventory there is, the more money brands will spend. 

And if you’re a consumer, just be glad that someone is listening to you and chances are good that you won’t have to sit through all those really painful Long Ad Breaks much longer.