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With Peacock, NBCUniversal still thinks there’s room for ads in the streaming TV era

By Andrew Blustein, Reporter

January 16, 2020 | 6 min read

NBCUniversal (NBCU) is prioritizing a consumer-friendly, interactive ad experience on Peacock, its streaming service set to go live to Comcast Xfinity X1 and Flex customers on 15 April. The national rollout is planned for 15 July.

The Comcast-owned network shared details on Peacock during an investor show today (16 January) in New York. State Farm, Target and Unilever are among a group of sponsors that will bring in “hundreds of millions in initial advertising revenue,” according to a press release.

NBCU was reportedly pitching brands Peacock sponsorship opportunities that cost up to $25m.

"State Farm is excited to be working hand-in-hand with Peacock to help define what the modern streaming ad experience should look like,” said Patty Morris, marketing assistant vice-president at State Farm. “It goes beyond simply filling traditional ad space. We are striving to connect with consumers in new and interactive ways.”

Peacock sponsors will partner with NBCU to form the 'Peacock Streaming Council', a group dedicated to building and testing the ad experience for the platform.

NBCU said it will also spend “hundreds of millions” in marketing dollars to promote its launch sponsors during the Tokyo Olympics through Symphony, the network’s cross-division marketing initiative. Peacock will go live nationally nine days before the start of the games in August.

The pitch to advertisers

Ad load on Peacock will be limited to five minutes per hour or less. The service will also feature several non-traditional ad formats, including the shoppable ads it recently began airing on broadcast TV and pause ads, which have become increasingly popular among media owners.

NBCU is offering advertisers:

  • ShoppableTV
  • Prime Pods: Single, 60-second, ownable ad pods
  • Pause Ads: A full screen, relevant branded takeover when content is paused
  • Explore Ads: A contextual ad surfaced during a pause that lets the viewer take an action, such as getting a discount sent to their phone. Surfacing a regular pause ad or an explore ad will depend on the content and buys NBCU has in place
  • Binge Ads: Watch three episodes of a show, have a sponsor present the fourth episode ad-free
  • Engagement Ads: Interactive ads such as trivia questions, product galleries and videos
  • Trending Ads: Timely ad experiences alongside the day's most topical content. For example, a carousel of the latest Olympics scores alongside content from an Olympic advertiser
  • Solo Ads: An exclusive sponsorship that limits advertising to a single ad within an episode of a show
  • Curator Ads: Peacock's editorial team will create curated collections of content; an advertiser can sponsor that collection
  • On Command Ads: Viewers can receive offers from brands by speaking through their remote via an integration with Xfinity voice technology

The pitch to consumers

There will be three cost tiers to Peacock.

A free, ad-supported version includes next-day access to current shows, its full library of completed series and movies, Spanish-language content, marquee episodes of Peacock original and curated news and sports, including the Olympics.

The premium version comes in two tiers: $5 a month (still five minutes of ads or fewer) or $10 a month for no ads. Additionally, Comcast has partnered with Cox to bundle Peacock Premium into the cable provider's offerings at no extra cost, making it available to 24 million subscribers.

The premium version houses twice the amount of content of the free offering at 15,000 hours, including all NBCU originals, early access to late night shows and additional sports content, including the Premier League.

Shows on Peacock include The Office, Friday Night Lights and Frasier. Originals include a drama with Alec Baldwin and a comedy with Rashida Jones.

'Doubling-down on the ad-supported ecosystem'

Come July, the streaming stage will be set. Disney+ and Apple TV+ are already in-market competing with the established guard of Netflix, Amazon Prime Video and Hulu. Peacock is set for April (and so is Quibi), with WarnerMedia’s HBO Max rounding out the bunch a month later.

While the rest of the services are either fully ad-free or have a tiered ad model, selling a portion of Peacock as a free, ad-supported service will “future-proof” NBCU, said the network’s chairman of advertising and partnerships, Linda Yaccarino.

"With Peacock, we're giving consumers the free service they want and advertisers the reach and scale they desperately need," said Yaccarino. "Peacock marks a doubling-down on the ad-supported ecosystem, and the next phase of NBCUniversal’s One Platform offering.

"By investing in the next generation of streaming video, we are pushing the industry forward today and future-proofing it for tomorrow.”

NBCU introduced One Platform, it’s service to unify ad buying across all forms of video, earlier this month.

Alan Wolk, co-founder and lead analyst at TVRev, said the new entrants to streaming have "a couple years" to figure out their strategy and win customers before the industry starts to seriously worry about the health of a given service.

"There’ll be a lot of churn as people test out new services," said Wolk.

Disney+, for example, is taking a family-centric approach with its titles. Wolk said NBCU has a strong reputation for comedy and "well-done mass entertainment" that's slightly smarter than middle-of-the-road.

"All of the services need to figure out what they’re going to be when they grow up," he said, adding that the fragmented streaming landscape means hit shows likely resonate with smaller, niche audiences.

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