Matt Strauss
Appearances
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Peacock launched in 2020, and at the time, the market was really focused on on-demand, scripted dramas, binge viewing, and most ad-free, most services were chasing that segment of the market. And we came to market late, if we're being honest about it. But one of the benefits of coming to a market late is you could assess the white space and where you see opportunity.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so we believe the opportunity for us was to position Peacock in the premium ad-supported space and not just kind of focus on premium scripted dramas and movies and on-demand, even though that is a piece of the programming strategy, but it was also about live sports and live news and unscripted programming and multicultural programming.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And again, playing to the strengths of what we do as a company, as a broadcast company, which was to target a broad household demographic. And the strategy there was that if we anchored ourselves in that place, then we're not directly competing with other streamers, we're more complimentary.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
It was about completeness and in some ways being like the best of cable TV for a relatively affordable price. And we also believed that the future was not just going to be on demand, even though on demand is a core piece of the way we consume television. But that linear and live, which a lot of people four years ago were saying was dead, that was just nonsense.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so that's why when we launched Peacock, we wanted to have both linear networks. We launched with dozens of linear channels. We launched with a library of 80,000 hours. We've grown the library to over 80,000 hours of programming. And we were also very intentional about it being ad supported because a dual revenue stream from our point of view was better than a single revenue stream.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And this is also core competency for what we do at MVC with having a very strong ad sales team and deep relationships with different advertisers. And we went to market with five minutes of ads per hour.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
which again was a very controversial thing to do at the time, but that's given us an advantage because it's also allowed us to focus on how do we innovate on the advertising beyond 15 and 30 second spots, because it'd been core to our DNA from the beginning. And the only reason I'm giving you all this context
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
is that when we built the service with with that intent it really was different in the market and so the vast majority of people who signed up for peacock signed up directly with the exception of comcast we did do a bundling deal with comcast and they currently do wholesale peacock with certain uh certain of their of their packages like high-end gig broadband subscribers but the overwhelming majority of our sub base is direct-to-consumer now
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
To answer your question, though, as the market moves more and more towards bundling, I do see that becoming an increasingly larger portion of our subscriber base. And again, taking the history lesson from what we know about bundling, the one thing that arguably has always held the bundle together has been sports.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And sports, coming from that side of the business, if you remember, we launched Peacock, it was supposed to be around the Tokyo Olympics. And so live sports was always fundamental to our strategy. And we've been aggregating live sports and sports rights
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
fairly consistently since we've launched Peacock with real purpose and intention, knowing that not only is sports going to be a driver of acquisition, which has proven to be true for us, but that sports is going to be an important component that if the market does move to bundling, that not only will we solidify our place in that bundle,
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
But equally important, if not more important, is that you get the right wholesale economics around how you're positioned in that bundle. And so we feel like we're in a really good position based on the trajectory that we're on. But if the market does move more towards bundling, we also feel like we're well positioned to be included in that kind of packaging.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
But I don't think it's going to take away from direct-to-consumer. I just think for us, it's going to continue to augment the subscriber base that we currently have.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Well, I'm describing price value. And there's a high value on sports. And that's obviously manifesting itself when you just look at sports rights and the price that sports rights are going for in the market. And so essentially, yes. I mean, yes to your question that we see ourselves. I mean, if you look at Peacock just as an example, we have more live sports than any other streaming service.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
You know, when you look at the NFL, the Premier League, Big Ten, the Olympics, obviously the NBA that's coming to Peacock later next year. And, you know, over the course of a year, we have like some live sports 300 of 365 days. And so we didn't get there by accident. You know, we got there through real intention. Like we've had a very consistent strategy and vision. from the beginning.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And I think what you're just seeing is us executing against that strategy. We would say internally, like, look, this is not a sprint, it's a marathon. Maybe at a sprinter's pace, you know, because obviously the market's moving very quickly, but we're fortunate to be part of a much broader diversified company at Comcast. with a senior management team that believes in our vision and our strategy.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And that's allowed us to not do things like chase low value subs or do wholesale bundling deals without the right economic relationships. And I think it's positioned us in a really, really good way going forward because we don't feel like we have to do things artificially just to kind of grow our sub base. Like we want to grow subs at the right ARPU, revenue per subscriber,
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
at the right level of engagement, you know, and build a subscriber base in the right way. And that's essentially what we've been doing. And we haven't wavered from that strategy or that vision from the beginning.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Yeah. Well, remember, though, the decline in paid TV isn't I mean, this may sound crude, it's not just because older people are passing away. I mean, some of it is people at all ages are making decisions where they might feel like it's more valuable, where they want to just cut the cord, so to speak, and get streaming services. And you could be at any age to do that.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
But to answer your more broad question, yes. I mean, that is essentially the strategy where, which is why Peacock exists within NBCUniversal, is as we see the pay TV business still being a very good business, it still is a very profitable business for our company. And we've built really strong brands in the pay TV ecosystem.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
that streaming is a way for us to kind of drive more growth and offset that decline and eventually become the broader growth engine for the company. But as I mentioned before, I think sometimes it's interpreted that legacy networks are somehow like dinosaurs and that that's not really where people are spending a lot of time. I see it very, very differently. I see it as a strength.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
You know, when you have a broadcast network and you could do something like the Olympics and you're averaging over 30 million viewers a day, that actually becomes a huge promotional vehicle for you to also drive awareness and audience for your streaming service.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
When you have networks like Bravo with really deep fandoms, and you can tap into that fandom on a streaming service by making some of that content available to cord cutters, it creates a little bit of an infinity loop where linear networks and pay TV can drive audience to streaming and awareness for streaming, and vice versa, streaming can drive people back to streaming linear.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
You know, another example of this would be a show like Yellowstone. You know, not everybody maybe is aware, but Yellowstone, we have the exclusive rights to stream Yellowstone on Peacock. When we licensed Yellowstone, it was not the number one show in television, which is part of the reason why we got the rights to it, because we took a bet that we thought it was a really good show.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
But that show was on Paramount Network, which is a cable network on various tiers of cable. It's not even a basic cable network. What happened there, I think fairly predictably, because it is an excellent show, is that people were finding it on streaming, because we were the exclusive home for it.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
They were then catching up as the show progressed in its seasons, and then they were tuning back in to watch the new season, in some cases on Paramount Network, And then that was driving people back to Peacock where maybe they wanted to watch it from the beginning or they wanted to catch up. And it became this really interesting infinity loop.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And this is the same thing that happened with Breaking Bad when it was available on AMC and another streaming service or Mad Men. And so I look at it very differently. I look at it differently. as this is a strength.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And if we can figure out ways to continue programming these different platforms, that they can continue to drive the audiences in a way that becomes a differentiator and a growth engine for us. And again, it goes back to why we've organized ourselves in the way that we have, which is to really think of it as a portfolio.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Well, no. I think when you're looking at delivering a streaming service, we obviously need to be available on every single platform and device. but the majority of video consumption is still on the television. And so these distributed relationships are really important. I think we have really good relationships with all the different partners.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
You even saw that in the Olympics, like Roku, for example, built a fantastic interface to promote the Olympics. Apple and Amazon did a really great job promoting. I'm not trying to name drop any specific platform, but I think we've got the right business relationship where they're incentivized to sell Peacock and participate in our growth. And we benefit also from the placement.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
What I meant when I said frequency and habituation is, I think of it as like, how often, Nealey, do you use your phone? And I can tell you the average consumer uses their phone or looks at their phone two to 300 times a day. And you probably never turn off your phone. I know for me, it's the first thing I look at in the morning. It's the last thing I look at at night.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
I even use it as my alarm clock. I never turn off my phone. Now think about your TV. Well, you probably turn on your TV when you want to watch it and you maybe do that a couple of times a day. And then what do you do? You turn it off.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so I'm looking at it differently and say, what do you need to do where someone never wants to turn off their TV and they want to open up our app every single day? That to me is the ambition I'm challenging my team to think through. And so that influences decisions we're making. That's a very different dynamic around how you program and manage a service, if that's your ambition.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
But that's where I think we need to go as a streaming platform. And the closest example might be a show like Love Island, which was a huge hit for us over the summer. That show was on five days a week. And so that obviously required you, if you were watching that show, to tune in five days a week. And that...
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Thank you, Eli. It's good to be here.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
is part of the habituation and frequency that I was referring to that I don't think is really discussed a lot when people are evaluating streaming services.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Right now, we are all part of, as I mentioned, the same group inside, which reports into Mark Lazarus. And Mark Lazarus oversees all TV and streaming. As I mentioned, like initially, it was like Peacock was like its own separate entity, end to end, like own programming, own marketing, own support services like HR and legal, et cetera. Everything was kind of insulated.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And we have been methodically breaking down those silos. And so we really believe the opportunity is to come around more shared services. And so, as I mentioned, we now have one programming division across the entire portfolio, which reports into Donna Langley, who also oversees our movie studio.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so now when we're making programming decisions for broadcast, cable, or streaming, you've got one group that's overseeing that strategy and that vision. which again, I think helps us as we make decisions around content that could potentially play across multiple platforms in different windows. You know, we work very, very closely with the marketing department of NBC.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And as you probably noticed, like NBC promotes Peacock. and locks up Peacock whenever they're promoting their primetime show. And so we work very closely, the Peacock marketing team works very closely with the NBC marketing team. And we have something which we call Symphony, where we all contribute a certain amount of inventory that we use to cross-promote across all of our platforms.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so if you're going to see a show like Fight Night, which is a new show on Peacock from Will Packer, you know, you're going to see that promoted on NBC, on our cable networks, on Peacock, because of how we're partnering on Symphony.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And we've done something very similar with, like, we've consolidated decision sciences and research, which is really the center of gravity around all the analytics and the reporting. And so, again, you have one team that's looking at that holistically across linear and across streaming. And we've also, back to what I said earlier about D2C,
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
We have one product team and one technology team that's managing a single platform.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And this is kind of a really, we haven't really talked about this publicly, but maybe it's just worth just spending one minute on what we're trying to effectuate here, is NBC, we built as part of Peacock, a fairly large team of people that are building out our streaming platform, both on the product side and on the tech and on the engineering side.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
You know, maybe just to give you a little bit of a background, I actually just celebrated my 20-year anniversary at Comcast. And so I've been at the company for quite a long time. When I came to Comcast, I actually came there as cable was transitioning from analog to digital. And it gave way to the two-way connectivity that ultimately built things like on-demand.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Our sister company, Sky, which operates in the UK, Italy, and Germany, predominantly, they have a streaming service that you may be familiar with called Now TV. And these were two different groups with fairly large teams that were building different platforms, in some cases, similar features. And we recognized that there was an opportunity to consolidate it all under one team. which we did.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And it's called the Global Streaming Platform Group, which sits inside of D2C. I know I'm throwing a lot of acronyms at you.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Okay. And so GSP is made up now of thousands of people that report into my team that are all across the world. They're in the UK, they're in Lisbon, they're in Prague, they're in New York, we've built one holistic team, and that platform is what powers Peacock. But this same platform is what powers a joint venture that we have in Eastern and Central Europe with PowerMount called Sky Showtime.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
It's the GSP platform that we've built as one company. It also powers the platform that we launched in over 50 countries in Africa through a venture that we have with a distributor called MultiChoice, That's also the GSP platform. And next year, we're going to actually migrate Now TV onto this one GSP platform. And so this has unlocked tremendous efficiencies across the company for us.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
It also, I think, has been a huge motivator for the people that work on this because now they're working on one platform and it can increase the velocity where they can build things once and not have to necessarily have teams competing against each other.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And in many ways, this is what positioned us so well, in my opinion, for things like the exclusive NFL playoff game in January and the exclusive NFL game that we had a few weeks ago in Brazil with the Eagles and the Packers. It's also what positioned us so well as a platform, in my opinion, for the Paris Olympics. And it's because we've had this maniacal focus on
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
how do we get more scale, more efficiency with a real commitment to like, we want streaming to work like TV. And what I mean by that is you don't think about it when you turn on the TV generally. It's a little bit like electricity. You don't think about electricity, unless there's a blackout, then you think about electricity. But the electricity is what powers everything in your house.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Everything that you're using in your house is likely getting powered by electricity. And that was, in a way, the ambition that we had with the platform, which is, can we make the platform so stable, so scalable, that latency, buffering... you know, crashes if too many people are using it, out-of-sync audio with video, all the things that have plagued streaming for years.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Let's do everything we can to just get that right. And if we can do that in a big way, then that gives us permission then to drive innovation. And so we have been, the last two years, really organizing ourselves in that way, building a platform because Live streaming, especially, if you haven't noticed, is very hard, but we've been really committed to that vision.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And I think I'm proud of the team and what we've accomplished because it allowed us to then do something like the Paris Olympics, which we feel really good about because all of the things that we introduced We've wanted to introduce for years, but we didn't believe we had permission to do that until we got what I just call the basics, right?
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so on-demand technology is something I've been very passionate about my entire career and was really focused on how I build that out for Comcast. and spent quite a number of years doing that. And then we ultimately launched the X1 platform, which was Comcast's IP set-top box, because we realized that the future was on-demand. That was going to give people instant gratification.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And to me, the basics are nothing matters from an innovative standpoint if the platform doesn't work. And so I feel like we've been very disciplined and focused on doing that. We've structured ourselves around that ambition over the last couple of years.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
it is yeah the product how big is how big is that team i don't think we've ever disclosed it publicly but it's in the thousands we've got thousands of people it has grown considerably over the last few years and again i think as we built this platform and demonstrated the capabilities it's actually allowed me to to partner with other parts of our company to shift more and more resources towards the global streaming platform team and so this has really been the tip of the spear
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
in how we're continuing to build out all of our technology on streaming going forward. And we work very closely, of course, with Comcast Cable, who has a very large team as well. But they have been more focused on connected TVs and connected TV devices. And so there's like a complementary nature to how we work together. But our focus has been, as you can imagine, mostly on streaming video.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Well, the answer is, of course, yes. I mean, which is a very classic kind of challenge that you have when you become a shared service as a platform. And there's ways around that though. I mean, we do carve out a certain amount of capacity to the different services that we're supporting. Like, so for example, in some cases there's commonality, like Sky Showtime has advertising.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Well, they actually benefited because we had already launched advertising on Peacock. And so when they want to launch advertising in Poland, that's a relatively easy thing for us just to turn on because it's already been built.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
But in Africa, just as an example, the viewing behavior is much more oriented towards mobile viewing because they don't have the broadband proliferation that we have in countries like the United States. And so the majority of streaming happens on mobile devices just because of the bandwidth constraints.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And there's also different payment structures because most people don't always have the ability to like pay by the month. And so they need to maybe pay by the day or they in some cases go and they have to go to retail environments where they buy vouchers to pay. And so we have to build capabilities that are more unique to that market.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so you have to be able to arbitrage certain capacity depending on the priorities. But there's a benefit. which is when you build these capabilities, we're building it once. And so now we have that capability. And so if we ever wanted to introduce that functionality in other markets, it's not like we're building it once and it's throwaway work.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
We can actually leverage it and it benefits other parts of the platform. And so it is kind of a balancing act, but I feel like Generally, Peacock is certainly the center of where we're focusing the vast majority of our resources, given the priority, the importance of it.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And I would say the majority of how we're using the platform in other countries is drafting behind Peacock in the Peacock roadmap, with the exceptions of some of the things that I just mentioned that are more unique to those markets.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
No, we have no ambition of white labeling it. We're being very surgical, I would say, and methodical on how we're thinking of this. And so in the examples that I've given, you know, we have partnerships. You know, it's, you know, the Sky Showtime venture is a 50-50 venture. The venture in Africa that I mentioned, you know, we have an equity stake in that venture.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Obviously, we own Sky as a broader Comcast company. And so we're I think that our ambition is not to build a white label platform. The benefit of what I'm describing is that as we've kind of created these partnerships, which has allowed me to get more scale, it also subsidizes the development for Peacock. And so by me strategically licensing our platform,
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And we needed a platform to allow people ultimate control, that they could navigate all these on-demand choices.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
In the ways that I've described, it's bringing in actually another revenue stream to me that I'm then able to use to add more resources to accelerate the development. And again, all these pieces is what's positioned us in a way to allow us to do some of the big things that we've been able to do over the last couple of years, especially around live programming.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
X1 became the platform where we did that, and it really was ahead of its time because it aggregated live and on-demand and DVR and even apps and made them all really seamless for consumers, including the ability to navigate them with your voice, with the voice remote, which was before even Siri and Alexa, like we were experimenting with voice.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
I mentioned earlier that when I came to NBC from Comcast, You know, Steve Burke called me, and I've known Steve for a long time. He actually hired me at Comcast when he was the president of Comcast, and it was kind of full circle when he asked me to then come to NBC when he became the CEO, when he was the CEO of NBC. But he said something to me on the phone which resonated, which is he said,
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
You know, Peacock's our future. And I interpreted that not just that it's the future revenue growth or growth for subscribers. I interpreted it as it's like, this is like how we could build a new culture. That's what excited me.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so, you know, part of what I'm really proud about that we've done inside of NBC since I've been there is not only established Peacock as the fastest growing streamer and, you know, our last earnings, I think, you know, we've had 33 million subscribers. and continuing to show bottom line growth. I'm also proud of the culture that we've built inside of NBC, which to me is equally important.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And I've probably spent a vast majority of my time really on how we build that culture in a way that I believe is gonna position us for success. And it's around collaboration, it's around communication, transparency. Remember Peacock was born in COVID. I was literally in my house building a new service that I had to coordinate with hundreds of other people that were not in the same room with me.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And that forced a lot of communication, a lot of transparency, a lot of trust, a lot of people feeling
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
ownership and i've been doing everything i can with the help of others to foster that that sense of culture and that started to spread into other parts of the company and so i think from that respect yes i do think that peacock is in many ways trying to change the company from in some ways from the inside out by also being respectful of the expertise of other parts of the company inside nbc but i do think over time
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
you know, our future is very much anchored on streaming and Peacock. And that is... But the difference is everyone inside the company owns a piece of that. It's not one group anymore. It's now news, sports, entertainment. Every single part of our company has their DNA in some way connected back to Peacock.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And I think that is our superpower, is how do we harness that power inside the company so everybody feels ownership of it. And I think... That's been probably the biggest transformation I've seen over the past four years since I've been at the company.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And I think as my career there kind of grew and I took on more of the role of overseeing the residential services at Comcast, which included video and broadband and phone, I got a call one day to come to NBC, which obviously is a subsidiary of Comcast. And I got a call from Steve Burke, who at the time was the CEO.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Well, just to take a step, I actually didn't have a different perspective when I was at cable only because over 10 years ago, I was part of a group that was nested inside of Comcast Cable, which was called Comcast Interactive Media. And we were there to disrupt the cable business. And that's exactly what we did. And so being a change agent is actually something I enjoy.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
But being a change agent in the right way I think is also important, which is through collaboration, you know, through challenging people, but doing it, I think, in a respectful way and in more of like an intellectual way and getting people to buy in. I really enjoy that aspect of the roles that I've played at Comcast and the roles that I played at NBC.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
You know, he had asked if I would come there to help them build a streaming service and take it to market. And I got that call on a Thursday, and Monday I showed up in New York City with my suitcase and I was ready to go. And what's very common inside of large companies, in my experience, is that when you're trying to build something new, it's common to almost incubate it.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
But, you know, it's very—I'm not sure if this is answering your question directly, but I think it's, you know, our goal within NBC is we want to get Peacock to scale. You know, we have subscriber targets that we want to get to. We certainly want to get to profitability.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
We are not profitable now. But it's investing—the way I look at it, and this is kind of something that's so interesting because— and I just ignore it to be honest with you, but you know, it's like, you'll see press articles where it's like Peacock is losing money. I mean, we are a startup business.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
I mean, you know, did Amazon make money immediately? I think that you've got to have a much longer term view here where I say, no, we are investing in a business. And so what you're looking for when you're investing in a new business is are you growing? Are you hitting your KPIs in the metrics? Are you achieving the long-range plan objectives? And the answer to those are yes.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
We're actually exceeding those objectives, which only gives us confidence that we're on the right path. And so we have a long-range plan. And we're executing against it. And so getting Peacock to scale, getting Peacock to profitability, but again, doing it in a way inside the broader portfolio is really where we're focusing a lot of our resources and our efforts.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And we feel really good that we're on the right path.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
You know, in order to achieve what I just said, if you're a subscription business, you need to say, okay, what's going to drive acquisition?
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
which is an important ingredient to a subscription service, what's going to drive retention and engagement, what is going to drive frequency, which is something that's not really talked a lot about with streaming services, but it's something that I'm very focused on, which is How do you actually change the paradigm where you want people to go into your app every single day?
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And again, that's not the way people typically think of streaming because if it's all on demand or it's all binge viewing, you're essentially telling the consumer it's there whenever you want it. There's no urgency to it. And we want to actually get people to open up our app every single day because that just gives you more at-bats, so to speak, to try to drive them into streaming.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
other parts of the service, which then drives more engagement, more monetization, better retention. And so when you look at it through that lens, it drives a lot of our decision-making. So our programming decisions around, it's like a mutual fund. You need a balance. It can't be one extreme or the other. If you're too focused on acquisition, Then it's a leaky bucket.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
You'll get a lot of people to sign up for your service, but then you'll just lose them because you don't have enough content to engage and retain them. And then vice versa, if you've got a lot of content that drives engagement, that's not going to get you to scale because you need the, and so we're managing it almost like, I think of it as like a mutual fund. And so we have a budget.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
We have a programming budget. We have a marketing budget. You know, we have a P&L inside of NBCUniversal that's dedicated to Peacock, even though we are part of the broader portfolio. And so we're making decisions around what do we need to do in order to achieve those goals. But I feel like we got rocket fuel because I have the added benefit of tapping into this broader portfolio that can –
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
materially add more marketing value, or remember, we're the home for all the Universal movies. And so when Twisters or Wicked goes into theaters, we're the next stop after the premium transactional window. We're the exclusive home for all the next day NBC programming. We're the exclusive home for the Bravo programming.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
You kind of create resources, you put a little bit of a fence around it because you don't want the day-to-day activity necessarily interfering with the ambition of trying to build a new business. And Peacock was the same inside of NBC.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Well, you probably heard this, and this is something that's funny because a lot of people don't believe this, but some of the most contentious negotiations happen internally. Yeah, of course. You know, and it's— Families make the hardest. Yeah, and sometimes it's counterintuitive to people, but the short answer is yes. I mean, look, we have profit participants. We have to negotiate.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
keep negotiations at arm's length. And in many cases, our content and the price of our content is being set by the market. We don't exclusively license every single piece of content on Peacock. I mentioned our movies. Our movies, we are the first window, but then there's a pay one A and then there's a pay one B. And so there are other third parties that our teams license their content to.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so it establishes market dynamics that we then need to negotiate again. So we are paying our fair share when it comes to programming. And even in the case of the NBC Next Day programming, that content was available before on another streaming service.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so there was a set value that was already ascribed to it that we essentially had to step into if we then wanted to migrate that content onto Peacock, which we did. And so my only point was, as a company,
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
We made the decision that we wanted Peacock to be the home for our content, which meant that we were going to also have to put our money where our mouth is, so to speak, and make the investment to allow us to claw back that programming. And we've been doing that. But by doing that, it also continues to tether us directly into other parts of the company in a very positive way.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
But what I realized early on was that there's lots of other businesses within NBC that actually are very complementary and can help get us more scale, can help de-risk the execution and the ambition we had with Peacock, for example. You know, NBC owns Fandango. which is one of the largest ticketing companies.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Because, again, we're all working together to continue to achieve these collective goals around Peacock.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
I have tremendous respect for them. I really, I have tremendous respect for them. And I really, I don't think a whole lot about other streaming services. And so this isn't, I'm not trying to be derogatory in any way.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Well, listen, kind of what I said earlier, we're playing to our strengths.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And one of our strengths, and to be honest, I did not appreciate this before. when I first came to NBC, just how much people love the NBC content. And I'm not just talking about the current programming, I'm talking about the deep catalog of content that NBC has. And there's a very, very large, we have 80,000 hours of programming on Peacock on demand.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
that has been a huge advantage, you know, to have a show like The Office, Parks and Rec, Brooklyn Nine-Nine, you know, to be able to have the Dick Wolf catalog of Law & Orders and Chicago's, to have every season of SNL. I mean, these are things that, again, play to our strengths that we knew drives a lot of engagement. And so that's been a benefit.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
But just back to your other comment, what I said about consistency of vision, We never subscribe to the fact that streaming has to be just scripted dramas. Like, that is a big piece of it, for sure. Scripted dramas do drive acquisition and help with brand development.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And you can almost probably think of a show that you could ascribe to a streaming service as kind of like it put it on the map, so to speak, as an inflection point. So that was always part of the calculus for us as well. But we always knew and believed that streaming could be so much more. And so unscripted, live sports, live news, that's been part of Peacock from day one.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so arguably, it's the hunter becoming the hunted. Where you're seeing other streaming services, I would argue, are moving more into our space than we're moving into their space. Including the fact that we've been very committed from the beginning to an ad model.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
which we believed was the big opportunity for us, because we knew that eyeballs were going to continue to shift more to streaming for all the reasons that you said earlier. And we also knew that the majority of streaming happens on the TV, even though most people thought it happened on the phone, but the TV is like the new TV. And you're now seeing every streaming service
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
They own Vudu, which is now called Fandango at Home, which has a catalog of 250,000 titles for digital purchase and rental. They own Rotten Tomatoes, which is certainly known for movie and TV reviews. They also, everyone's familiar with NBC and a lot of the cable networks that we have in the United States. but NBC distributes their networks in almost every country around the world.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
for the most part, launching an ad tier. And so the market is evolving, but it's evolving, I think, in a very predictable way. But we really have been very consistent with our vision and strategy.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And I think that's actually given us an advantage because it's allowed us several years to invest in live programming and invest in advertising as part of our platform DNA, which just puts us in a very different place in our trajectory compared possibly to some other services.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Well, remember, from a product and technology perspective, it's this GSP team, this platform that I mentioned. So it's the same team. And since we're all part of the same group, we literally sit right next to the NBC sports team and next to the NBC entertainment team. And so we work. hand in glove with these different teams.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And when we brainstorm ideas and we identify where we want to go and where we see the opportunity. And I think that, you know, we kind of recognized with Paris early on, like the stakes were high. We're coming out of COVID for the last two Olympics where there was questions about the cultural relevancy of the Olympics going forward.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
I think if I'm being very candid, I don't believe Peacock really fulfilled the promise of the Olympics for streamers and for cord cutters with Beijing and with Tokyo for a variety of reasons. But I think that there was real questions about whether or not we could really deliver the experience that we knew we needed to deliver. And so the stakes were high, and we take it so seriously.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
It's a privilege to work on the Olympics. That's really how a lot of us feel, and it's a tremendous responsibility. And so we really set out to do something That this was the moment where I mentioned, like, we thought we were ready to surprise and delight and introduce features that we believe potentially could change the way people experience sports.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
What I don't think people appreciate, and this, again, is just the benefit of being part of a bigger company, is that Paris has been 10 years in the making.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
You know, like, so for example, when you went onto Peacock and you watched a replay, like maybe you missed an event and you wanted to watch Simone Biles, making the content available on demand and for replays, that was first done in London 2012 at Comcast. That was the first time we made all the Olympics available on demand. When you saw the Gold Zone,
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
with Scott Hansen, which was fantastic, and the NBC sports team did an amazing job producing that. We actually tested that, if you look, in Sochi in 2014. We tested the gold zone and that idea. When people were watching Snoop, who became the ambassador of the Olympics, which is like a surreal thing because he became so relatable to so many people, we tested Snoop
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
in Tokyo in 2020, where we gave him an Olympic show on Peacock because it was too controversial to put him on NBC at the time. And so this has been an evolution that has gotten us to this place, but it is an example where every part of the company was firing on all cylinders. It also speaks to what I said earlier, where You know, Peacock was the number one app.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
We had more digital consumption on Peacock for Paris than every other Olympics combined. And at the same time, though, there was always a question, well, is that going to cannibalize the primetime show for NBC? And that didn't happen. The NBC primetime show had a record number of viewing because people were watching on Peacock.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so what we recognized was that if we could aggregate all of these businesses under one portfolio, it actually could give us even more economies of scale. And that's what we started to do. And so the umbrella of direct-to-consumer, Peacock is certainly a big piece of it, but all these other businesses, the global businesses and these other digital businesses now sit under this D2C umbrella.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
during the day, but then they wanted to see the storytelling that NBC does so well during prime time. And that's that infinity loop that I was referring to. And so it really is an example of like, I think what plays to our strengths, what we do well as a company, we were preparing for years for that moment. We're really proud of what we were able to deliver.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And I think in many respects, there's no going back because when you could deliver that kind of experience and you get that response, we're now looking at it and say, well, how do we then apply that to the NBA? How do we apply that to the Premier League? How do we apply that to other types of experiences?
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And this is the next frontier for streaming, from my point of view, because right now, streaming is arguably a two-dimensional service, which is, I sign up for your service based on your content and your price. I think the next iteration will be product.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
How do you start to use the product in a way that differentiates the experience from one streaming service to another, where arguably now there's more similarity than differences? The Olympics is an example of what I mean when I say the product can become part of the value proposition of where we want to go over time.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
If I were to project out in the future, I actually think the next version of where I then want to go with Peacock and with streaming is to expand the aperture even beyond video. And it goes back to what I said about time. How do you get more share of time? And if five hours is the ceiling for video, how do we start tapping into other ways that we can drive engagement on our platform
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
and add more value because it's not a streaming platform, it's an entertainment platform. That's the way we're starting to think of it. And we've got lots of other parts of the company that could be leaning into how do we get more share of time, but also how do we start to get more share of wallet?
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And like you can imagine one day, Nealey, that you subscribe to Peacock and not only do you get this great video service, But maybe if you're a Peacock subscriber, you get a free movie ticket to Fandango. Maybe if you're a Peacock subscriber, you get early admission to Universal theme parks. Maybe, you know, given our advertiser relationships, maybe you get discounts to McDonald's.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
I mean, so we're thinking very differently, I believe, in how we want to evolve the value proposition beyond just what it is today, anticipating kind of where we think we need to go as a platform.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
We haven't disclosed the number, but I guess one way to think of it is 90% of people who engage with sports on Peacock watch other content. And so, again, you know, we look at sports. There's no bigger fandom than sports. And so sports, as I mentioned earlier, is a very effective tactic to drive acquisition. We've shown that with the NFL exclusive games and NFL just regular season games.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
We've shown that certainly... We've seen that with the Olympics, but we also have such a great portfolio of other programming. The way that that's manifesting itself, just to build on this for a second, is that when you look at something like the playoff game that we did earlier in the year, That was the most viewership engagement we've ever had on Peacock.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
But the next day after the playoff game was the biggest on-demand usage day we ever had on Peacock. And one of our originals, Ted, the Seth MacFarlane show, was the number one original we ever had on Peacock. And then The Traitors, which just actually won the Emmy for best unscripted competition show, was the number one unscripted show on Peacock. And so we have the ability to bend the curve
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And they each have their own individual P&Ls, but in the aggregate, they reach 100 million users, they generate billions of dollars of revenue, and they're available in over 70 countries around the world. And so I think that that is the portfolio that I'm now managing.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
When we could take somebody who comes in for sports, but utilize the product in a way to engage them with other content on our platform. And again, that's the benefit of having such a large catalog of programming for each individual in the home.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Well, if you look at something like our WWE deal, which is sports entertainment, all of those events used to be pay-per-view events. And those are now exclusively available on Peacock. And that was a deal that we entered into that, even though we have a relationship with the WWE for USA, that was a decision that we made that was very specific to just Peacock.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
But I actually think of it a little bit differently. We're not really focused on like sports that are unique to just Peacock. I think one of the benefits of being part of this bigger portfolio is we have the ability to make content like sports available on different platforms.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And when you look at something like the NBA, which we're very excited about, and obviously is a very big deal for us as a company, these rights only come up every decade. And so it's nice to have these rights back where they belong on NBC and on Peacock.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
I think part of the reason that we were able to enter into that relationship is because we're more than just streaming and that we have such a broad reach with broadcast and with cable. And so I see that as a strength. And to me, that's something that I would want to continue leaning into as we evaluate sports rights deals going forward.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And my belief is most leagues see it the same way, that they don't necessarily want it to be limited to just streaming because you still have such a large audience that's available on these other platforms, including pay television.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Well, I don't know how to quite answer that.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
I do want to. And so, yes, we have the same ambition that you do. We want to offer every event in the highest quality.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
We want to make sure that when we're delivering content, especially content that's simulcast across the different properties, that our ambition is we want to deliver it in the highest quality universally. And so if we're going to deliver the content in 4K,
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
How we then leverage that portfolio is something that I've been trying to build out over the last few years around, again, trying to build one product team, one technology team, one decision sciences research team, et cetera, to give us kind of these centers of excellence inside of NBC as we continue to roll out our digital plans for direct-to-consumer.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
on Peacock, I think it's also important that we're able to deliver it in 4K to our broadcast stations and to our cable and satellite distributors. And so it adds a little bit of complexity in having that focus.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so the relationships and how we approach the market is meaningful to us, and we want to make sure that we're doing it in a very comprehensive way for all of our partners, not just one platform.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Well, listen, I share your ambition and your enthusiasm. We will get there. I think we've shown that we're continuing to evolve the product and the platform. Hopefully, you're seeing that as a consumer. And again, the Olympics. Do you see demand for higher video quality?
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Well, listen, I... I think I'm gonna put back on my Comcast hat. We've been delivering 4K and most people don't even know if they have a 4K television or they think they're watching in 4K and they're watching in like 720p. And so I don't think the average consumer generally really does understand it because it is confusing. Like, what is 4K? What's Ultra HD? What's HDR?
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
There's a lot of marketing rhetoric. And so I don't know if it's being really driven by the consumer as much as maybe a sub-segment of the consumer that really is more... acute to like being able to notice the differences. But I will tell you, our ambition is to offer the best and highest quality video and audio. So because to me, that's an important quality of the platform.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so technically, that is what we're building towards. Whether the consumer is necessarily asking for it or not, we want to offer them the best and highest quality. And so that is really where we're That is the ambition of where we're going with Peacock. And I think we will absolutely get there.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
Well, it was a real pleasure. It was a real pleasure talking to you. Thank you for having me on the show. I appreciate it.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
There's no question that the cable business is a good business. It continues to be a good business. I think to answer the question, you almost need to look at it through the lens of the consumer. What I've learned is there really are different cohorts of how people consume video, how they subscribe to video. So for example, The cable customer tends to watch a lot of TV.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
The average consumer watches about five hours a day. If you subscribe to cable, you typically watch that much, if not more. And there's a lot of benefit of having cable because, as I mentioned, if you have the X1 platform, there's a simplicity of just having all the choices in one place. It works with like 99.99% reliability. And in many cases, people are also subscribing to the bundle.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
So they're getting video, but then they're also getting internet. And in some cases, they're getting their wireless. And the bundling, even though people tend to say they like a la carte, bundling has a lot of virtue because the more you take, the better the price. And so people who subscribe to cable and satellite today, it's not that they're not aware of other choices.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
they're paying in some cases for that convenience and that reliability. They also tend to over-index in subscribing to streaming services. And so it's not one or the other. In many cases, you're seeing that customer buying both. And so that's one part of the market. You have another part of the market which might be more price sensitive, maybe does not consume as much video.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
In some cases, they might watch video, but they might be spending more time on social media or video gaming or how else they're occupying their time. And they like the flexibility of being able to subscribe to a subset of services. And in many ways, that's what direct-to-consumer is offering.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so there is a Venn diagram, though, here, where, you know, as a media company, you want to cast a broad enough net where you're providing a value proposition for one segment, which is like the content carnivore, but at the same time offering the optionality, and in some cases with direct-to-consumer. But in many cases, there's an overlap between the two.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so when you look at it as a portfolio, which is really how we manage the business in MVC, It's not direct-to-consumer sits outside of the broadcast and the cable networks. It's actually all one group. And we manage it as a portfolio. And there's examples where that comes to life, like the Olympics.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
But I think that we're kind of looking at it in totality and that it's about giving customers choice and options. And that's how we see ourselves growing. And so if
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
pay TV declines and cord cutting grows, you know, we still want to service the customers who have pay TV, but at the same time, we recognize that the growth over the next, you know, foreseeable future is going to continue to come from direct to consumer.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
You know, when you kind of study the pay TV ecosystem and kind of the trajectory of pay TV, I think it's consistently been declining, you know, year over year. And, you know, I don't think anybody really knows what at what point does it kind of start to flatten out. But I do believe that there's always going to be a fairly large group of people who are
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
are willing to pay a premium for cable for all the reasons that I said before. And so I think that's still gonna be a very, very large part of the TV viewing and TV household viewing. But yes, I mean, direct-to-consumer is where we're really projecting the growth to come from. And certainly,
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
What's interesting about what you're putting your finger on is I actually think that there's a lot of signs of what I've learned in the cable business that I see happening in the direct-to-consumer business that in some ways it's going to be, I think, back to the future.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And what I mean by that is that people who maybe did cut the cord, part of the rationale, I believe, was because they thought they were going to save money by going and just getting some streaming services. And to a certain extent, that was true for some period of time. But it was very predictable that the cost of content hasn't gone down, the cost of sports rights haven't gone down.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
It was inevitable that prices of streaming services were going to have to increase. And we've seen that as an industry over the past 18 to 24 months, where streaming services have continued to take their rates up in an effort to drive more profitability. By the way, we're not excluded from that. I mean, we took a price increase over the summer.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so I think that that though was a very predictable outcome. The other predictable outcome from my point of view is what I said earlier, which is people watch more video than they really know. Like if you look at the Nielsen numbers, the amount of time that people spend watching video has been fairly consistent over the past decade.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
And so if you cut the cord and you sign up for a streaming service, you're unlikely gonna get your video calories as a consumer from one service. And so what happens is you subscribe to two, three, and now the average consumer is subscribing to four or five services. And so you take these two things together where I'm subscribing now to four or five services, the rates are continuing to go up.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
In some cases, you may be asking yourself, like, wait, I might be paying more and possibly getting less than what I got when I subscribed to cable. And I think that these are the ingredients in the marketplace that is driving the market to bundling. And I talked about this five years ago that
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
we're likely going to see an explosion of streaming and direct-to-consumer only to then find it almost re-aggregate itself under a new bundle. And I think there's obviously a lot of evidence over the last two years where that's exactly what's been happening. So again, in many ways, it doesn't change the fact that you're going to still have people who subscribe to cable or streaming or both.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
But I think that direct-to-consumer is going to be a very important component. But I think increasingly, direct-to-consumer and direct-to-consumer as part of a bundling construct is going to likely be how many people over time are subscribing to these different services, which again is ironically back to where everything started with cable television.
Decoder with Nilay Patel
NBCU's streaming chief isn't worried about you canceling cable
We might be a little bit unique. Yeah. Because we actually do not have that much bundling. The majority of our subscriber base is direct to consumer. And we have been very disciplined in how we've tried to grow the subscriber base. You know, again, if you just go back a couple of years,