In a Tuesday interview with CNBC’s David Faber, NBCUniversal chief executive Jeff Shell disclosed an updated subscriber tally for Peacock, saying the streaming service now has 15 million paid subscribers and 30 million monthly active accounts.
That marks a 2 million increase from the end of the second quarter, when Comcast’s NBCUniversal reported 13 million paid U.S. Peacock subscribers – a figure that was flat compared to Q1. In the quarter monthly active accounts had ticked down versus Q1 and stood at 27 million at the end of June.
Since the start of 2022, Peacock has grown paid subscribers by 70%, Shell said.
Shell’s comments suggest the intervening months since Q2 have been better for the direct-to-consumer streaming service, which came to market as an ad-supported subscription service.
As to what’s fueling the growth for Peacock when some other parts of the market are flat, Shell said “it’s really driven by the content.”
He highlighted key pillars for Peacock including sports, “which has been really successful for us.” All major sports deals on linear also have non-linear rights, he noted, such as NFL and English Premiere League, as well as certain Big Ten rights starting in 2023. The World Cup is also teed up to stream on Peacock.
The second pillar is studio films, where NBCUniversal films are coming directly to Peacock after their transactional window – with Shell pointing to movies such as “Jurassic World: Dominion” and “Minions: The Rise of Gru” and others as helping to drive growth in the quarter.
Third, he cited the linear network businesses, with Shell telling CNBC’s Faber “even though, as you mentioned they’re declining, they’re still very strong and number one across the board.”
And with the new slate of fall programming arriving, Peacock has a big content boost as the new next-day streaming home of NBC and Bravo linear content (with shows like “Saturday Night Live,” Dick Wolf created series like the “Law & Order” franchise, among others) for the first time. Before NBCUniversal terminated its programming deal, that content previously went to Hulu. As announced earlier in the year, Peacock is also the new streaming location for content on the popular Bravo network.
In addition to that content, Shell said it would continue to produce original series for Peacock.
Pressed by Faber on questions in the investment community as to whether there’s enough scale on Peacock and whether it can hit engagement hours needed, Shell pointed to the ad-supported model and indicated subscriber numbers aren’t everything.
“All subscribers are not created equal, what you have to do is actually look at the real numbers,” Shell said, adding that as an ad-supported service, engagement is a key metric. In the current quarter, he said, Peacock is seeing average revenue per user (ARPU) of close to $10 for paid subscribers and said looking at the third quarter on a run-rate basis Peacock would reach $2 billion in annual revenues.
“I don’t know a lot of businesses that you’ve covered that in two years have reached the point of $2 billion,” Shell said. “So we’re right on the trajectory that we wanted to, we’re growing subs, we’re growing our revenue and we have the scale to do things we want.”
As for linear, Faber noted some analyst firms like MoffettNathanson (which suggested linear TV is hanging on by a thread) feel cable operators like Comcast aren’t putting much energy in trying to save a dying linear TV business. Shell acknowledged there’s definitely a decline in linear with the shift to streaming, but stressed it’s “still an incredibly important business” including to consumers and advertisers, pointing to the NFL as an example.
When it comes to potentially handing over the 10 p.m. primetime hour to local stations, Shell said NBCU isn’t ready to come to a decision but “we are looking to reallocate resources,” and there will have to be tradeoffs as linear declines.