According to a new filing, NBCUniversal's streaming service Peacock lost $914 million in 2020, but the losses were expected by the company. Launched in 2020 by the network, Peacock is designed to compete with streaming services like Netflix, Hulu, and others, and was driven by the phenomenon known as cord-cutting, where audiences are increasingly moving away from terrestrial TV services to digital offerings. Peacock's first year in operation was a success in terms of numbers, with the service hitting 33 million sign-ups in 2020. This pales in comparison, however, to Netflix's 200 million-plus subscribers, and even Disney+'s 100 million subscribers, a mark it passed this week.
But Peacock does have a lot of existing content on its side, which NBCUniversal hopes will bring in more subscribers over the next months and years. This includes traditional network shows like Parks and Recreation and The Office, as well as the Punky Brewster reboot. NBC also recently secured for Peacock exclusive WWE streaming rights in the US, giving it a segment of the streaming audience that isn't catered to by its main competitors. Still, given its complicated tiered subscription system, and use of ads even with paid subscriptions, Peacock is not yet seen as a mainstream choice by many audiences.
Now, Variety reveals that Peacock lost a lot of money in 2020. According to a new filing with the SEC, NBC's streaming service logged a $914 million loss last year. The news, while seemingly shocking given the number being so close to $1 billion, is actually expected. Most streaming services don't make a profit in their first few years, and that's especially relevant for Peacock. NBCUniversal had previously told investors it would be spending $2 billion on Peacock in 2020 and 2021, according to the report, and the company doesn't expect to break even on Peacock until 2025.
While the losses are expected, they are still incredibly high, and position Peacock as a streaming service with some serious catching up to do. Not only in terms of subscriber numbers, but also in terms of pure financials. Still, the content library is strong and should appeal to a large audience, so perhaps it will show stronger results in 2021. For example, The Office is being viewed more on Peacock than Netflix, according to NBCUniversal head Jeff Shell, so there's clearly an appetite for the content on the service.
The challenge now will be to ensure the large investment being made into content for 2020 and 2021 turns into paying subscribers, something Peacock has struggled to deal with. Once that not insignificant problem is solved, the service should be able to start bringing some money in and working towards that break-even target of 2025. But by that time, it may be too late, with Netflix, Disney+, and others already doing far better financially.
Source: Variety