1. Peacock Goes Big On News (And Free)
Peacock launched nationally this week–it’s available via VIZIO and LG smart TVs, though not via Amazon and Roku. The big surprise however, is that they appear to be pushing the free version of the app and said free version is a very well done FAST. (Free Ad-Supported Streaming TV Service.)
Why It Matters
Most people assumed that Peacock would be focusing on their ad-lite and ad-free versions which sell for $5 and $10, respectively.
But the launch is all about the free version.
As in the pitch when you went to the website was “Sign up now! You don’t need a credit card!” And there was no mention of any paid version which makes me think many subs are unaware that there is a paid version.
The free app is well designed and has a lot of interesting programming I did not expect to see there–things like Downton Abbey and Peacock’s new original Brave New World.
But the biggest surprise was how much news is on there.
There’s a 24-hour live feed of Sky News, a seemingly 24-hour feed from NBC News called “Today All Day”, along with the most recent episodes of top shows from MSNBC (Rachel Maddow) and CNBC.
That’s huge, because news is one of the main reasons people stick with cable TV. And if they can get all sorts of news from Peacock–for free, no less–than that’s one less reason to keep their cable subscription.
It’s also significant in that Hulu has been running the ABC News feed on the app, and CBS has been fleshing out their successful CBSN app, adding in local news from their local owned and operated stations.
So between the three of them, there is now a strong national news presence on OTT.
The other thing I’ll throw in is that while the mainstream media tends to focus on the cable news networks (Fox and CNN), the network news shows still get much, much higher ratings (like double and then some the numbers on Tucker Carlson’s top-rated cable news show) and they feel much more non-partisan than the cable networks, which gives viewers another reason to seek them out.
Circling back to the free Peacock note, there are several reasons NBCU may be pushing free Peacock.
The first is the obvious one–you still have to give them your email address to watch and they may want to get you onboard and using the app before they start circling back to promote the paid versions via that email address you gave them.
The second is that they may have done the math and decided that the amount of ad revenue they’d make with all the viewers they’d attract from the free version would more than make up for whatever revenue they lost from not selling $5 subscriptions.
The third is that they may also have done the math and decided that in the middle of the pandemic, without the Olympics or a whole lot of new original programming, their chances of luring people in with a FAST were much higher than luring them in with yet another Flix, and they are going to wait till things shake out before pushing the paid versions.
Or some combination of all three.
What You Need To Do About It
If you’re NBCU, take a bow–Peacock is very well done and adding in all that news content and giving it its own tab was a smart move.
If you’re ViacomCBS and you’re still figuring out what to do with Pluto, take a hard look at free Peacock because that’s likely going to be your main competition.
If you’re a viewer, and you have a VIZIO or LG smart TV (or if you’re one of the six people who has an Apple TV) check out Peacock, especially if you’re getting bored of your current OTT line-up.
2. Netflix Goes Big On New Subscribers
Netflix gained 10 million subscribers last quarter, almost 3 million of them in the newly acronymed “UCAN” region (US and Canada.) That’s more than the 7.5 million they were expecting.
But Wall Street was still not happy, sending the stock down because the projections for next quarter were lower than what analysts had predicted.
Why It Matters
Netflix theory on the lower Q3 projections seems to be that “anyone who was thinking of subscribing to Netflix has had three months of lockdown to decide to do so and given that we beat our numbers in Q2, we don’t think additional potential subscribers are going to magically appear out of the woodwork.”
That sounds pretty logical to me–if Netflix was able to add almost 3 million people in the US and Canada last quarter, that speaks to how well they’ve managed to maintain their position as the first Flix you subscribe to–everything else is an add on.
Which is not to say that Netflix doesn’t have issues.
Their selection of library content is shrinking rapidly as all the new network Flixes take back their programming. That means they’re cranking out a lot of originals, many of which are mediocre, and people are noticing.
They’ve managed to get around the content drought somewhat by licensing a number of popular foreign series and releasing them as “Netflix originals.” And much of their production is done overseas, which may make it easier for them to get back to work than companies whose production is based in the U.S..
That said, Netflix releases its series all at once, which means that it’s both easy for them to drop into the void if they’re not marketed correctly and that they can’t stretch out a new series for months the way an HBO can, releasing a new episode every week, with extra breaks thrown in for holidays and awards shows.
I don’t think any of that is fatal though, and if anything, it gives Netflix the opportunity to re-market series it has heart for but that didn’t break through the first time out. And while the competition is heating up, this is a case of a rising tide lifts all boats, so if anything, the more Flixes there are, the more likely it is that viewers will shift away from cable to an all-Flix and FAST diet, not shift away from Netflix to subscribe to other services.
What You Need To Do About It
If you’re Wall Street, you need to do more learning about how the TV industry works and what the real plusses and minuses of the various services are. (We’re happy to help.)
If you’re Netflix, just keep on keeping on and, if you’re not doing so already, think about what series deserve a second crack at fame so you can remarket them when the drought hits.
If you’re one of the other Flixes, Netflix gaining subs is good for you too, so rejoice in their victories.