Peacock Goes to YouTube
NBCU announced a deal this week that has them distributing their app via YouTube. Which clearly made Team YouTube Is TV happy, given that there was now even more TV to watch on YouTube.
But the thing is, there was already.
HBO has a deal with YouTube for their Primetime Channels tab, as does Paramount.
So it’s not like it’s something new.
That said, Peacock’s deal is more than a bit different due to the way it is structured. Subscribers to YouTube’s ad-free YouTube Premium service will get access to Peacock content for free. Versus Max, where YouTube serves as a channel store of sorts, and subscribers pay for Max, only the payment goes through YouTube rather than to Max directly.
While there are still a number of unanswered questions in the Peacock deal (I’ll get to those in a minute) what seems to be clear is that NBCU made the decision that the extra revenue they’ll get from having more subscribers on YouTube is worth whatever they lose from not controlling the subscriber relationship.
Why It Matters
The whole notion of media companies getting into the customer management game has always been somewhat suss.
It’s something I remember writing about 10 years ago when all of the “Flixes” were first launching: yes, it’s great to actually own the customer relationship the way Netflix does.
It’s also a lot of work.
Work that none of them had ever had to do before and truthfully were not very good at.
So at some level it’s not surprising that they’re turning to outsiders to help them grow their user bases.
At another level it just makes sense.
Peacock is never going to be most people’s first choice for a streaming service. Or their second or third.
So aligning themselves with YouTube where they can escape notice like Homer Simpson sliding back into the bush, is probably their best path forward.
It makes them a part of a greater something and thus more likely to escape the axe when consumers are looking to cut.
There are also, as I’d mentioned before, a bunch of unanswered questions.
Will Peacock content be integrated into YouTube, will it exist in its own space within Primetime Channels, or both?
If it lives off of Primetime Channels, in the wild, will it just be served up by the algorithm like everything else? Will NBCU then be able to slice and dice it into Shorts and shorter clips they can run ads against?
And the biggest question of all: how will it be measured?
While the main product itself will be ad-free, the deal includes a number of live sporting events and those are most definitely not going to be ad-free.
So will the sorts of advertisers who run on those games be content to let Google measure things? Will they insist on Nielsen? Some sort of hybrid?
That’s all still to come.
It’s also all sort of minor in the grand scheme of things.
The bigger story here is that tech players like Google and Amazon are becoming the new MVPDs, serving as distributors for companies like Peacock that excel at making content.
So in one sense, they’ve gone from one overlord to another. But looking at it from a more generous angle, they’ve figured out how today’s media ecosystem works. That younger audiences fire up YouTube the way their parents once fired up the cable box. And that this particular genie is not going back into the bottle.
They’ve also accepted that they are not going to “win” the so-called “Streaming Wars.” That there was never going to be a single winner and if there was, it was going to be a tech company for whom television was just a hobby business.
So aligning themselves with YouTube is a smart move, like a small country with good resources aligning itself with a bigger, more powerful neighbor. They each win from the alliance, which, in today’s market is no small thing.
What You Need To Do About It
If you’re Peacock, pat on the back time. You’ve managed to turn a profit. (Finally.) And now you’ve found a smarter way to zhuzh up your subscriber numbers without having to give up much or do much work.
Always a smart move.
If you’re YouTube, also well done.
You’ve got hours of great content plus live sports.
And unlike your creator content where you’ve always got to reassure advertisers “no, really, you just need to trust them,” because neither of you have the slightest clue what is coming, the Peacock stuff is guaranteed to be brand safe and is a known quantity.
Which helps you too.
If you are one of the other streaming services, you should be looking for as many distribution deals as possible.
Consumers don’t like having so many subscriptions and feeling like they have to pay to watch everything, sports in particular.
So burying the cost of your subscription inside a bigger subscription or a bundle of subscriptions is a very smart move.
Discoverability Beats Discovery
In our recent Special Report on the TV OS, we discussed the difference between discoverability—the ability to find the show you already knew you wanted to watch, and discovery—the ability to help you find something to watch when you’re unsure, and how they are very different skill sets for a smart TV.
So I was quite pleased to see that a recent report from our friends at Hub Research found that consumers cared much more about discoverability than discovery.
Or, for that matter, just about anything else.
Why It Matters
A whopping 60 percent of respondents indicated that discoverability, e.g. making it easy to search and find the shows they want, was a big priority, versus 31 percent who wanted more personalized recommendations and 25 percent who wanted notes about trending content.
That’s not all that surprising given that the number one complaint I hear from non-industry friends is that it’s impossible to find anything on streaming, sports in particular, and that too often they’re resorting to Google and getting intercepted by the way-too-eager-to-please Gemini, who is full of irrelevant follow-up suggestions: “Would you like to know who the key players are on the Minnesota Vikings?”
No, you moron. I want to know where I can watch the damn game. Try working with me on solving that.
But I digress.
Point being that while personalized discovery driven by interactive AI remains a hope for the future, finding something you’re looking for on the TV today remains an issue.
What You Need To Do About It
If you’re a TV OEM or the proprietor of an independent interface, there’s only so much you can do until the various media companies decide to play nice.
So if you’re one of the many media companies who think you will destroy your business by letting someone else deep link into your interface, think again.
You are only going to piss people off and drive them to YouTube.
The ones you haven’t driven away already.
If you’re one of my friends and family, I feel you. But I swear I do not set the rules for the television industry and I am not the one who decides to hide where the Giants game is.
Really.
Alan Wolk is co-founder and lead analyst at the consulting firm TV[R]EV. He is the author of the best-selling industry primer, Over The Top: How The Internet Is (Slowly But Surely) Changing The Television Industry. Wolk frequently speaks about changes in the television industry, both at conferences and to anyone who’ll listen.
Week in Review is an opinion column. It does not necessarily represent the opinions of StreamTV Insider.