NBC has fired its opening shot in the streaming wars. This week, the network unveiled Peacock, its attempt to capture viewer attention in an increasingly atomized marketplace. On the latest episode of New York’s Pivot podcast, Kara Swisher and Scott Galloway discuss the roadblocks ahead.
Kara Swisher: This week, the NBC streaming platform Peacock launched, but it won’t be available on two of the most popular streaming devices, Roku and Amazon Fire TV. Those two share a combined 70 percent of the streaming-player market and reach about 80 million active users. Peacock is available on other streaming devices like Apple TV and Google’s Chromecast, among others. What do you think of the service?
Galloway: I think Peacock is going to struggle. First of all, it’s late to the game. A lot of people have spent a lot of money and a lot of time and are … I don’t want to say they’re sated on content, but content consumption has gone up dramatically during the pandemic. Peacock does have some unique attributes. One is that it believes — and is probably correct — that the whole world can’t go to subscription, that there is a large market for people who are fine with advertising for free. But I think its pricing strategy is confusing.
Swisher: Explain it.
Galloway: Well, it’s free with a lot of advertising, five bucks with some advertising and more content, and then ten bucks for a bunch of original content and no advertising. It’s kind of the Goldilocks thing. But I think in this age, marketers mistake consumers for wanting more choice. They don’t — they want less choice. They want to be more confident in the choices presented. And Netflix is a very easy choice. You know what it stands for. It’s no advertising. It’s great content. So I think that’s going to stay.
Swisher: I would never get rid of Netflix. It’s worth it.
Galloway: I think the most interesting thing about Peacock is that if you look at the wars that are going on between it and Roku, it’s really telling just how the power dynamic and media has changed so dramatically. If you go on Amazon Prime, if you’re part of Amazon Prime Video, it means you’re in its app, you’re in its app and it basically controls and has access to the data, and it serves it up as, like, a feature of Prime Video. And if you’re like Netflix and like Disney+, you control the experience, and most importantly all the data. But here, we’re talking about the original gangster in premium non-advertising video — HBO — and also the largest ad-supported content company on television, Comcast. And they don’t have the leverage to negotiate a deal where they have their own apps. Amazon is saying, “No, we’re happy to present you, but we’re going to control the experience and have control of the data.”
Swisher: Who has the power here, the device-makers, like Roku and Amazon Fire TV and Apple TV?
Galloway: There’s always a debate between content and carriage, or between the manufacturers’ brand and distribution, which is more important in this instance when you’re Amazon and you kind of control the rails on 83 percent of households. I don’t think consumers are going to say, “I’m canceling Prime,” or, “Prime is not nearly as appealing to me because it’s not carrying a Peacock or HBO Max.” It’s just weird that Disney+ and Netflix now have much more power and leverage in the channel than HBO Max or Comcast, which just would have been unthinkable even five or ten years ago. It’ll be very interesting to see what happens. But I think Peacock is not going to be nearly as big a disappointment as Quibi, where supposedly 92 percent of people did not transition to a subscription from the free trial.
Pivot is produced by Rebecca Sananes. Erica Anderson is the executive producer.
This transcript has been edited for length and clarity.