1. Peacock Becomes A Phoenix

People often get a funny look on their face when they talk about Peacock, NBC’s Swiss Army knife of a service that combines ad-free SVOD, ad-supported SVOD and a FAST all in one.

The app had never seemed to find its footing and has yet to come out with any particularly buzzworthy originals.

That’s all changing though.

This week, NBCU CEO Jeff Shell announced that Peacock now has 15 million paid subscribers, up from 13 million last quarter, a 15% jump, which is in line with Shell’s assertion that the service has seen a 70% increase in paid subscribers in 2022.

What’s interesting here is that while the jump is indeed about the programming, it’s not really due to any sort of buzzworthy originals.

Rather, it seems to be a combination of fortuitous events: NBCU has taken back its linear reruns from Disney’s Hulu, which means that shows like Saturday Night Live and Real Housewives are now on Peacock, alongside Universal movies like Minions and Jurassic World. Throw in access to NFL games and English Premier League soccer and a low price point of just $5/month for the ad-supported version, and you have a pretty compelling—and pretty unique—product.

Why It Matters

Peacock’s success goes against the conventional wisdom that you need at least one big streaming hit to gain subscribers. As streaming becomes viewers’ first choice for TV, all of Peacock’s plusses become important: access to shows like Saturday Night Live, NFL football and recent movies seem to justify that $5/month price tag. 

And by maintaining a FAST service, NBCU is able to keep viewers in the Peacock ecosystem, giving them the ability to re-engage them as subscribers.

The other reason this matters is that as all the big SVOD players launch some form of ad-supported service, players like Peacock and Paramount, who already have their own FAST services in place are in an excellent position because they have a ready-made audience for their advertising. 

That point is going to be key as advertisers start delving into exactly what percentage of each service’s audience is actually going to see their commercials, because what is the point of having 50 million subscribers if only 5 million are signed up to see ads. 

Throw in NBCU’s strong ad sales team and ability to sell across both linear and streaming and that rise in subscriber numbers should be music to advertiser’s ears.

While there are still many challenges to be worked out in the rapidly-growing streaming advertising market, the money is indeed beginning to shift: smart TV OEM VIZIO announced today that they saw $200M worth of upfront commitments this year, doubling last year’s amount. I have no doubt the other FASTs are also seeing upfront boosts, as advertisers are finally following eyeballs.

So there’s all that.

Peacock also deserves some points for overcoming the lousy hand they were dealt.

If you recall, the service was supposed to launch with the 2020 Olympics, which never happened and NBCU got caught without a whole lot in the way of original content as well, so they doubled down on the free service… only to find out during the 2021 Olympics that users were surprised to learn that there was such a thing as subscription Peacock.

All this while their competitors were launching high profile originals and reaping the rewards of having launched pre-COVID.

Final note: There’s been talk about how NBCU is thinking of doing away with their 10pm hour and moving most of their programming over to streaming. While this is not good news for their affiliates, it’s merely accelerating the future somewhat.

We’ve been talking about this for a while, but at some point it’s not going to make sense for the networks to maintain two slates of programming, one for linear and one for streaming, especially when there is the perception that all the “good stuff” is on streaming. Peacock already has a lot of the type of programming NBCU is good at, programming that does not attempt to replicate HBO, and that’s going to help them set themselves apart from the other SVOD services in the years to come.

What You Need To Do About It

If you are an advertiser, definitely check out what NBCU is up to and how you can reach your audience across all their properties. 

After which you should check out the various FAST services as a way to fill in those audiences, increase reach and even get some unique ad units along with more complete metrics.

If all of this is confusing to you, keep an eye out for TVREV’s upcoming report on advertising on the FASTs (and streaming in general) which the esteemable Mike Shields is going to be joining us on.

And finally, if you are Jeff Shell and the rest of the Peacock team, take a bow. You were in a tough situation with a lot of haters, but you dug in your talons and came out ahead. Kudos.

2. Is OAN The Future Of Broadcast?

In the “maybe we should have used a silver bullet after all” category comes news that OAN (aka OANN), the very right wing news network that was booted from all of the major MVPDs this year has reinvented itself as a diginet and is now available in 30 markets, with the goal of being in 100 markets by the end of the year, as per a report from Bloomberg.

And what exactly is a “diginet” many of you may be wondering?

Also known as “subchannels” and “multicast networks” they are the additional channels available on the digital over the air transmissions from local broadcast stations.

Meaning you need an antenna to access them. A digital antenna to be exact. 

Thus far, the digitnets have been the home of networks like Cozi (reruns), Buzzr (game show reruns) and Bounce (multicultural reruns). The audiences are small but not insubstantial—it is estimated that around 15% of TV households partake in over the air broadcasts and so they’ve definitely been garnering some buzz..

Why It Matters

If the major broadcast networks do indeed move their feeds to their streaming services, that doesn’t leave a whole lot of raison d’etre for local affiliates. 

Especially if retrans fees start to fall off a cliff as the number of pay TV subscribers sinks below 50 percent.

So what’s the alternative?

The FAST model is certainly an option and there’s not much difference between diginets like Bounce and Buzzr and many of the linear channels found on the FASTs. It’s easy enough to see the various FASTs taking their more popular curated channels and turning them into diginets. (Lots of rights negotiations to muddle through before that happens though.)

But then there’s the other option, which is to become a home for the type of programming that is unwelcome elsewhere online, either because it is so polarizing or because it does not have enough of an audience or both.

Which is something that ultra-conservative media seems to have already figured out.

As per Bloomberg, Newsmax, OAN’s main rival, also has a considerable presence on the diginets as does a network called Real America’s Voice which airs Steve Bannon’s War Room show. 

Taking political programming out of the picture, it does raise the option, something we’d talked about here years ago, that broadcast will become home for niche content of many different stripes, a place for creators to experiment, given the low costs of creating video content these days

So think something like local cable access only with the advantages of being able to showcase all those social video stars.

Definitely worth keeping an eye on.

What You Need To Do About It

If you’re a local broadcaster, those diginets may be what helps you stay relevant. So if you haven’t been paying attention, now is definitely the time. In addition to existing options, there may be local options as well—YouTube, TikTok and Instagram are full of creators who may well be happy to create programming for you, or at least have their existing content on your diginets. Worth looking into for sure.

If you are an advertiser and you are looking to reach local audiences, diginets are a great low-cost way to reach viewers you are missing elsewhere, everyone from younger viewers to ethnic audiences.

FInally, if you are Nielsen or one of the other companies that provide TV measurement, think about adding the diginets to your offering. It might be a small market, but it holds the promise of becoming a larger one, and accurate third-party measurement would certainly help it along that path.

Something to think about.