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Comcast's Peacock is facing a tough test as competition heats up and advertisers seek more viewer data

  • Comcast’s streaming venture Peacock is facing more competition as it enters year two.
  • Advertisers want more intel on how Peacock’s shows are performing to justify top-shelf prices.
  • It also needs more exclusive content to stand out from rivals such as HBO Max and Disney Plus.
  • See more stories on Insider’s business page.

As Peacock nears its first birthday, NBCUniversal’s streamer is facing fresh challenges — and doubts.

Peacock has delivered in its first year, providing average-active-user guarantees to launch partners such as Target, Capital One, State Farm, and Verizon.

“Peacock has definitely met or exceeded expectations,” Horizon Media’s cochief investment officer, David Campanelli, told Insider. “They are outperforming their average-active-user estimates, which is good to see, and content has been high quality as expected.”

But as NBCUniversal enters one of the most transformational upfront negotiating periods in years, advertisers are ready to cite Peacock’s growing competition to squeeze out better prices, narrower targeting, and more data from the ratings-free black box that is streaming.

Michael Law, the president of Amplifi, part of Dentsu’s Media Investment Group, said he was happy with Peacock’s start and its broad offering of premium sports and entertainment content. But he said advertisers wanted to be attached to specific shows on Peacock and see how they’re performing.

“We want to see everything: The total scale, we want to see show-by-show reporting,” he said. “As much as we talk about targeting, the content alignment is still important for many brands.”

Buyers also expressed reservations about whether Peacock would remain a draw for prestige advertising after it opens the door to programmatic ads. Peacock’s chairman of global advertising and partnerships, Linda Yaccarino, has suggested ads on Peacock will cost the same as on primetime TV, despite Peacock’s relatively small audience. A primetime TV CPM, for 1,000 viewers, can go for upward of $100 per 30 seconds, according to one TV ad buyer.

“I feel like the programming is good. But how much are they going to sell and ruin this semi-pristine ad model?” the TV ad buyer said of Peacock.

An internal source said the company’s varied use of “accounts” and “users” to describe uptake had also caused confusion in the marketplace, since more than one person can use a single account. The company also still discusses sign-ups. And little to nothing is shared about how many people are subscribing to Peacock’s ad-supported paid tier.

And as big as streamers are getting, they still don’t match the reach of linear TV broadcast and cable networks. Peacock has distribution deals with Google and Apple, Roku and PlayStation, but is yet to arrive on Amazon’s FireTV device.

AVOD, or ad-based video on demand, is poised to become an $18 billion business by 2025, according to the independent equity-research firm MoffettNathanson. Establishing the biggest beachheads now is important as TV viewing shifts to on-demand streaming destinations. In the coming weeks, commercial-fueled streaming-video providers will be laying their claim to Madison Avenue TV ad dollars in what is expected to be one of the frothiest upfront periods in recent memory as the economy roars back to life.

Peacock is also key to Comcast’s plan to grow broadband customers by offering them a nice freebie. The effort seems to be paying off: Comcast added 1.97 million net new broadband customers in 2020, up from 1.4 million in 2019, according to Leichtman Research Group.

But the ad-supported streaming lane is getting more crowded. The market leader, Hulu, is projected to remain the frontrunner, taking in $5.3 billion by 2025, followed by Roku with $4.4 billion and Peacock with $2.3 billion, according to MoffettNathanson.

Discovery Plus and Paramount Plus, which launched earlier this year, have joined the hunt for ad dollars, and HBO Max kicks off an ad-supported offering in June. The Fox-backed Tubi and ViacomCBS’ Pluto are also seeking ad support, as is Disney Plus. Amazon is getting ready to monetize its billion-dollar investment in exclusive streaming rights to the NFL’s “Thursday Night Football.”

While AT&T’s HBO Max and Disney Plus have established themselves as destinations for new movies, Peacock’s broad content offering has also made it tricky to fix an identity in customers’ minds.

NBCUniversal has packed Peacock with premium content as if it’s a Thanksgiving turducken. It has spent $1 billion on WWE, has signed a $2 billion deal for NFL games, and has two Olympics to draw from, along with any sports it moves over from the soon-to-be-shuttered NBCSN channel. On the entertainment front, NBCUniversal paid $500 million for “The Office” and drafted “Modern Family.”

But its pay-TV movie rights are tied up with its rival HBO, and Peacock needs more exclusive content in addition to shows such as “Real Housewives” that are shared with other streamers.

Peacock also is causing a headache for station groups as NBC-branded content goes online and takes eyeballs away from their local TV viewership — an issue they’re likely to bring up the next time they negotiate the license fees they pay the network.

As far as upfront talks go, Amplifi’s Law said: “We get the story — there will be a lot of new money in terms of volume. It’s that there’s a competitive set.”

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