NBCU exec talks content licensing strategy, sending Suits to Netflix

Las Vegas – At the NAB Streaming Summit Tuesday, NBCUniversal’s Matt Strauss discussed the media company’s content licensing strategy, including the move to license Suits – a series that became 2023’s most-watched TV show on streaming -  to Netflix rather than keeping it for its own Peacock streaming service.

According to Nielsen’s 2023 streaming data, Suits, which originally aired on USA Network from 2011-2019, spent 12 weeks in the No. 1 spot on Nielsen’s U.S. top 10 list and clocked 57.7 billion viewing minutes – inclusive of viewership on both Netflix and for one season available on Peacock.

So with NBCUniversal owning its own streaming platform Peacock, what drove the decision to license most of the series rather than keep it to drive viewership on its own streaming service? Speaking at a fireside chat Tuesday, Strauss, NBCU chairman of Direct-to-Consumer and International, said the strategy starts with “trying to maximize the value of our content across the portfolio,” where he noted licensing decisions depend on both the content and content window.

Strauss said, in his opinion, “it’s very important” to have some level of exclusivity when asking consumers to pay for a service each month, to ensure there’s enough of a value proposition. However, he noted the NBCU library, saying “you can be surgical in how you can monetize that library.”

In the Suits scenario, that meant NBCU only licensing seasons 1-8 to Netflix, while keeping the final ninth season exclusively on Peacock.

“This was actually a very…strategic way for us to expand the aperture audience, more people got exposed to Suits [on Netflix]. And if you hadn’t watched Suits, a lot of people saw it for the first time through streaming, but if you go through the seasons and you want to watch the final season” viewers needed to go to Peacock.

Meaning that after availability on Netflix helped popularity of the older licensed series soar, if viewers were hooked from watching the first eight seasons, they needed to sign up for Peacock to see the series conclusion.

Ampere Analysis previously highlighted a resurgence of cross-licensing practices among competing media-owned streaming services, which after an initial period of largely keeping content exclusive to their own platforms in order to grow subscribers have more recently returned to the practice of licensing as they seek to get the most out of their content investments and libraries.

And Peacock isn’t completely forgoing exclusivity, where Strauss emphasized it’s still key to have exclusive content and why original series like “Bel-Air,” “Poker Face,” and “Ted” are only found on the NBCU-owned streaming platform, as well as exclusive pay-1 movie windows. The same goes for sports, where Peacock earlier this year paid for exclusive rights to an NFL Playoff Wild Card game, which drew in a record nearly 23 million viewers.

For NBCU and parent company Comcast, Peacock is one arm of what it is thinking about as a comprehensive media business.  As Streaming Summit Chairman and industry analyst Dan Rayburn noted, on Comcast’s most recent earnings call Comcast President Mike Cavanagh suggested a more holistic view when it comes to the overall media business as it relates to Peacock profitability, and where the company expects 2023 to have been the year of peak losses for the streaming service that counts around 31 million subscribers.

“I’m less focused on what standalone Peacock losses are doing than I am on doing what’s right for the long-term for the totality of the media business, which is linear and streaming,” Cavanagh said during Q4 2023 earnings results in January.        

As NBCU licenses linear network content to other major platforms, it also utilizes parent-company Comcast to distribute the Peacock streaming service to their broadband subscribers as part of the broader relationship.

“I think linear networks and streaming services, not only can they work better together in how content flows back and forth between some of these platforms,” Strauss said Tuesday, but also different ways to work with distribution partners to provide the right value.

While exposure and popularity of Suits on Netflix potentially helped drive more viewing on Peacock for the last season of the series, NBCU is also leveraging its own traditional linear TV networks to drive interest in Peacock originals. Strauss discussed airing the first episode of a Peacock original series on an NBCU cable network to promote and invite viewers to see the entire series only available on Peacock. Or for a recurring series, air the first season on one of its networks to grow an audience and then put the newest season only on Peacock.

This, he said, helps entice people into signing up for Peacock for the newest season, again going back to the different platforms working together.

And it’s not just linear helping to drive streaming.

“Actually streaming could also drive linear, we’ve seen this time and time again,” Strauss said, citing Peacock’s exclusive streaming rights for the first four seasons of popular Paramount-owned Yellowstone.

The executive added that NBCU believes it helped build up that audience on Peacock, “which then benefited the linear seasons when they would show up on Paramount.”

“If you can thread the needle, these are very, very complementary platforms. But also you can do the same thing when it comes to how you license and how you window your content” Strauss noted, as a means for media companies to maximize the value they get from their content.