Bloomberg reported today that as of late April, Comcast’s Peacock has about 42 million sign-ups but about 2.8 million paying subscribers (with another 11 million or so using its ad-based free tier or accessing it through a cable provider). By comparison, Disney+ has about 38 million paid subscribers in North America; Netflix, 74 million. With Universal’s most valuable properties living on a competitor’s service, it’s easy to read the strategy as a vote against the future of Peacock, which hasn’t benefited from the day-and-date draw of HBO Max releases nor the buzzy titles of Disney+ and Netflix. (Imagine if Disney did the same with “The Avengers” or “Star Wars?”) This strategy speaks to a studio that sees value in going after pandemic-proven revenue streams. As IndieWire’s Tom Brueggemann reported, Universal’s Peacock dance is a clear sign Universal wants to protect its PVOD window. After three weekends in theaters, its pandemic-era releases typically move to PVOD where they generate 80 percent returns on its $19.99 rentals. (Compare that to the 50-50 split studio-theater splits, or the enigmatic math required to determine the financial performance of a movie on streaming.) As companies build subscriber numbers and pump billions into content, the streaming wars are prohibitively expensive. Disney’s streaming lost $300 million in Q1 2021. Building a streaming business means forgoing old-fashioned output deals, which have long been one of the most reliable revenue streams.
Speaking at Sun Valley this week, incoming CEO of the soon-to-be-merged Warner Bros. Discovery David Zaslav promised more mergers. “There’s a lot of assets out there that have good IP that will probably get new homes,” he told the New York Post. Universal’s approach may represent a smart long-term financial move that borrows from the past while looking toward the industry’s future trends. Sign Up: Stay on top of the latest breaking film and TV news! Sign up for our Email Newsletters here.
