Variety's 'Strictly Business' podcast features conversations with industry leaders about the business of media and entertainment
On today’s episode of Variety‘s “Strictly Business” podcast, Matt Strauss, chairman of NBCUniversal Media Group, expands on the evolution of the Peacock streamer and his view of the “the great re-bundling” that is underway for streaming media.
“Binge viewing is the opposite of urgency,” Strauss observes. “How do you get somebody to open up your app every single day?”
The big news out of Comcast’s Q2 numbers this year was a big milestone for Peacock, the streaming platform that you oversee, reaching profitability for the first time in six years. Matt, what were the drivers what led you to that important benchmark in this past quarter?
Live appointment TV on a streaming platform? Will never happen, said someone back in 2019.
We were always very clear from the beginning that we saw white space in the streaming market. And I don’t know if that’s partially because part of my DNA comes from Comcast cable. I like to think of myself as a student of the business and how pay television works and the history of how pay television got to where it did, as well as the growth of cord cutting and streaming. We are a broad-based broadcast network, which means that we try to reach a broad household demographic, although we also want to have something for each individual in the home. which means that you have to think broader than scripted dramas. You have to think about unscripted programming and news programming and sports and movies. And so we had a very important aperture around having a broad based streaming service, which really becomes an extension of what we do as NBC. We are a dual revenue stream business. We both license our content and we have an amazing ad sales team under [NBCU chairman of global advertising and partnerships] Mark Marshall. Well, two revenue streams typically is better than one when it comes to any business. And it made sense to us that if streaming was going to continue to evolve and more eyeballs were going to migrate to streaming that the advertisers were going to migrate there as well. And so it was very important that we anchored ourselves as an ad-supported service from Day One.
That was a departure from the pre-pandemic orthodoxy around SVOD.
There was a lot of head scratching. Like, wait, why are you not doing what everyone else is doing? And again, I think it speaks to playing to your strengths, looking for the white space, because there’s always white space in every market. And also having the resilience to have a longer term view. The other longer term view that we had was that live programming, especially sports, was going to be critical to streaming for several reasons. One was the biggest challenge that we believed streaming was going to have was habituation. How do you get somebody to open up your app every single day? Binge viewing is the opposite of urgency. Binge viewing is telling the viewer it’s there when you want it, and so there’s no urgency to it. What you really want, especially if you’re an ad supported service, is to give people a reason to open up your app every single day. You want to drive what I would call a habituation. And then the more times they go into your experience, the more at-bats you have, so to speak, to try to get them into other types of programming.
How do you make the numbers work at a time when sports rights are only going up and up?
Let me ask you very directly, ARPU versus ARPU — is yours comparable to or even greater than say a Netflix or an HBO Max?
You just announced a big deal with YouTube Premium that got a lot of attention. Consumers who pay the full freight for YouTube Premium will get access to Peacock. Will it be everything or a limited selection of what’s on the platform. Will they get all access to Peacock, or will it be a limited selection of peacock?
I think it’s maybe helpful just to kind of frame our perspective on bundling. This may come back to my cable roots at Comcast, but if you go back to 2019, I remember doing an interview and this was kind of at the height of cord-cutting and people were subscribing to streaming services. And I was trying to draw a parallel to the cable business. And I said, streaming is actually going to look a lot more like cable in the future. And what consumers are going to realize is that one streaming service is not going to give you enough video calories, because people on average consume five to six hours of video a day. And so you’re likely going to find that people are subscribing to multiple streaming services in the future. The cost of content and sports rights are not likely going to decline, which means that streamers are going to have to take their retail prices higher. That is likely going to create a dynamic in the market where bundling is going to start to form, and the value proposition to the consumer is the more you take, the better the price that is essentially at the cable industry got started. And there’s no reason to think that streaming wouldn’t follow suit.
In terms of the business relationship between Peacock and YouTube — is it basically the old cable model where, say Cox Cable would pay USA Network a certain number of cents per sub for the right to carry the service?
Peacock has been largely domestic? Would you say that these types of bundling deals are what you’re looking at to expand its international distribution?
NBCUniversal went through a big transition last year with the separation from Versant Media. How have things changed for you this year? Is it as simple as you have a more streamlined focus: NBC, Peacock and Bravo. Or have there been unintended consequences from disconnecting from linear cable?
First, we are still very big believers in pay television. Pay television is a big part of our revenue. Ironically, a lot of the challenges that consumers have today with streaming, I would argue, were solved with pay television. When you talk about the ultimate bundle, no fragmentation, having everything aggregated in one place, you’re really pining for what you had solved. And so we are still very big believers in pay television. I think to answer your question, though, I think it’s accomplished a few things. It’s provided us more focus. The assets that are part of NBCUniversal that remained with NBCUniversal were handpicked for a reason. NBC, Bravo, Peacock, NBC sports, NBC News, Telemundo — these assets work better together. And it also provides clarity around goals and priorities.
The Versant spinoff took a lot of energy in 2025 and became official at the start of the year. Now there’s news last month that Comcast will split up NBCUniversal and Sky from the Comcast cable systems and a standalone company. That’s a lot of corporate transition time. Are you concerned about people getting distracted?
I have been at the company over 20 years. And so for me personally, it’s bittersweet because I’ve spent so much of my career at Comcast Cable, and I’ve spent several years now here at NBC. But putting that aside, it was the absolute right business decision. Having [Comcast co-CEO] Mike Cavanagh, who in many ways is the architect with [Comcast chairman] Brian Roberts of this new structure, it’s really going to be about speed, velocity and focus. That’s the way I would describe it. And so it’s very energizing to know that we’re going to have a tighter portfolio of assets that are going to position us for growth. I think it’s going to allow us to make more streamlined decision making. I think having Mike Cavanagh be the CEO of NBCUniversal [after the split] just to have his strategic leadership is also going to allow us to continue to accelerate our growth. And I think we’re going to be able to be more opportunistic.
Are you a little nervous, though? Because you will after this separation, your quarterly earnings will rise and fall on how well Peacock did and how well your movies do?
There’s no question being part of a diversified company allows you to offset any misses in other parts of the business. And so, what you’re really describing is removing a safety net. I would say the general sentiment of people at NBCUniversal is confidence. We have a tremendous degree of confidence in our movie studio. And again, I’m obviously going to be a bit biased here, but I really believe this. I think we have the best in class operators. whether it’s [NBCU entertainment chair] Donna Langley or [Universal parks CEO] Mark Woodbury or [NBC News Group chairman] Cesar Conde or [Sky CEO] Dana Strong. You’ve got people who understand the business. They are best in class. They are managing world class businesses. And so to your question, while there is the removal of that safety net, the general perspective is we’re ready for that.
What are you all cooking up for Peacock to make your content stickier?
We set out on this journey several years ago to start thinking of streaming more as an entertainment platform, more as a participatory entertainment platform. And that’s what led us to launch vertical video several years ago, because so much of the consumption we saw was happening on mobile. People were swiping and navigating with their forefinger and their thumb. And so to be able to offer live sports in vertical video or even original microdramas in vertical video — you now have that fully embedded into our platform. We started partnering around gaming, but not just any game like gaming that is derivative of fandoms that are on our platform. So for example, we have rights to ‘Jeopardy!’ And ‘Wheel of Fortune.’ You can play right on our platform. ‘Law and Order’ is a huge fandom. We partnered with Wolf Games on derivative games that you could play right on our platform or podcasting. We have a show called ‘The Traitors,’ so why not have a podcast around talking about ‘The Traitors?’ And so our strategy has been very much focused on super-serving the fandoms, to expand the concentric circles to offer them more ways to engage the best place to consume our content should be on our platform.
The other thing that we look very closely at is, one way to drive retention is to also start thinking of Peacock not just as a service that you pay and you get video, but what if there are other benefits and perks that you get and the subscription service starts to feel more like a membership? And so we are going to be testing a membership platform for Peacock as well. And there’ll be different memberships depending on your tenure on Peacock and also how much you engage on Peacock. But you essentially will get and earn rewards.