Much of the discussion in Tuesday’s 24th Annual Credit Suisse Communications Conference keynote was about post-pandemic business growth for NBCUniversal, even as the conference took place strictly online as a video event. Many of the questions from Credit Suisse analyst Doug Mitchelson were about the Peacock streaming service, but NBCU CEO Jeff Shell made it clear that Peacock is not a standalone business.
“It’s important to remember that we’re not managing Peacock as a separate business. This is a critical thing as you look inside our company,” Shell insisted.
“We view our TV business as one business,” Shell said. “In fact, we manage it that way. We don’t have two different programming departments—one for Peacock and one for everything else. We don’t have different marketing. We manage it as one business. Do we grow faster? Do we add value overall in the TV business as the result of the investment that we’re making in Peacock? And we feel strongly that we do.

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“The goal is not necessarily to get Peacock to profitability, which we want to, but the goal is to have our TV business grow sooner and more rapidly despite linear declines—and we think we’re well on the way to that over the next few years,” he added.
The Upside Of No ‘Plus’
Shell told the conference that the marketplace has shown that NBCU made the right calls by not giving its streaming service a “plus” moniker—building its own marketing identity—and launching with an ad-supported offering rather than being exclusively by paid subscription. That, he noted, is now being copied by major competitors.

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Shell claimed that Peacock is already getting “broadcast level” CPMs—proving the value of its ad-supported model. In fact, he said, viewer monetization is higher for advertising than for the paid subscription side.
Despite NBCU’s late entry into streaming, the CEO insisted that in just two years Peacock has caught up to what Paramount+ (and its predecessor) had achieved in seven to eight years.
The NBCU CEO took issue with the idea that streaming has already maxed out on content. Rather, he sees more and more content of various types as the way to let each consumer find the combination that satisfies them. Shell said the 24-hour NBC News Now service draws lots of viewers who come to Peacock to watch something specific, but then stay on the platform for an update from NBC News.
Rights Business Still Lucrative
Even with its broad array of broadcast, cable and streaming outlets, NBCU still sees value in selling content rights to other platforms.
“I think we are more focused on producing for ourselves, but ironically we are actually selling more to third parties than we ever have,” Shell said. “And the reason for that is that in the old days—thinking five years ago—you would produce generally for NBC and your cable networks, and you want the best the majority of the time. And when you look at what Universal Television produced and what NBC bought, NBC bought most of the content and you would sell a couple of shows to other broadcast networks or cable networks.

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“Now, the whole content engine at our company is much more geared toward supplying what we think our content engines need—whether it is something that NBC needs on a Monday night or what Peacock needs in the third quarter to leverage something that is working,” he said. “But ironically, because everyone else is buying lots of content, we have a deep library of content and we are selling more to other streaming platforms, too.”
“The first objective is to make a hit,” Shell said. “Wherever a show can be a hit—hopefully on our platform—but if it is on another platform we get it back someday in our library and that’s good, too.”
Inflation’s Hit
Mitchelson wanted to know if inflation is impacting NBCU.
Shell noted that rising gas prices make it cost more for people to drive to the company’s theme parks, but so far that has had no impact on demand, with park visitors back above pre-pandemic levels. And, he noted, even if domestic demand starts dropping off, the end of COVID testing requirements for air travel should unleash pent-up demand by international visitors.
The executive also addressed the impact on advertising.
“You would expect inflation to affect the ad market… In the scatter market we are starting to see some weakness,” Shell said. “It’s still pretty strong, but it’s definitely weaker now. The weird thing about that is that it’s still segment specific. It’s not like the whole market is coming down by a specific amount.”
Shell noted that auto ad demand is down, but he attributed that to inventory shortages, rather than inflation. The same is true with pharma, he said, since the pandemic held up FDA approval of new drugs.
Upfront Results
Mitchelson also inquired about the Upfront, noting that ad buyers have said that negotiations produced high, single-digit CPM increases.
“We’re not quite done, but we’re mostly done,” Shell noted. “It came out to… high single digits as our pricing. We had expected mid-single digits coming into the Upfront, so I’m thrilled with that. Volume… is comparable to last year. If you want to go all the way to the top level, what happened is that the declines in viewership and distribution—with cord cutting and everything else—was offset by pricing and Peacock for our company. So, I think it was a pretty good result.”
Comcast Divorce?
Given periodic speculation that Comcast might do a deal which would separate NBCU from the cable giant, Mitchelson noted some recent rumors to that effect.
“From my perspective as head of NBCU, if people could see my average day or average week, there’s a lot more touchpoints between our various operations than people outside looking in might guess,” Shell said. “They’re small and they’re big. The obvious ones are that we would never have launched Peacock with the same speed or success without the Sky platform or without Comcast Xfinity promotion.”
Shell said there are a lot of touchpoints between NBCU and Comcast. “And I think it works better for me than not being part of Comcast,” Shell said.
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