To boost its Peacock streaming service, Comcast’s NBCUniversal unit is considering moving most of its content from Hulu to an exclusive position on Peacock, according to a report in The Wall Street Journal (subscription required).
The Journal report says that NBCU, which owns a third of the shares in Hulu, while Walt Disney Co. owns the rest, is considering this move to strengthen Peacock, which has struggled to add subscribers at the same pace as Hulu, Disney + and some other streaming services since its launch in June 2020. If implemented, the switch is likely to take place before the fall of 2022, when NBCU’s window to leave its content licensing agreement with Disney will run tight.
If NBCU decides to take this step, it could remove such popular NBC shows as “The Voice,” “Chicago PD” and “Saturday Night Live” from the Hulus lineup, as well as possibly older hit programs like “Will & Grace,” according to the Journal. But that would not affect rebroadcasts of other older NBC shows like “Law & Order: SVU” and “Friday Night Lights.”
While such a move is likely to help Peacock, it could hurt Hulu and the NBU’s bottom line because NBCU owns a large stake in Hulu, the Journal notes. A change of content to Peacock could also lower the value of NBCU’s holdings by making Hulu a less valued asset. Among other things, Disney and Comcast are now arguing over Hulu’s total valuation, where the two partners are now in arbitration in the case.
Other options are also available. First, Comcast and Disney could draft a new content-sharing agreement that extends beyond the future. Second, they could agree to extend the window for when an NBC show runs on Hulu, thereby giving Peacock a longer period of exclusivity.
As the Journal points out, Comcast and Disney could take advantage of opportunities to end their Hulu partnership by 2024. At that point, observers expect Disney to buy Comcast’s stake and take 100% control of Hulu.
In its latest earnings update, Disney reported that Hulu now has nearly 44 million premium subscribers, an increase of 20% from a year earlier. In July. Comcast reported that Peacock had 54 million subscribers, but it did not split the total amount between its payment levels and the free, ad-supported level.
Just last week, as part of its growth strategy, Peacock began expanding into Europe with a “soft launch” to Sky TV and NOW customers in the UK and Ireland. For further expansion in Europe, NBCU and Comcast plan to merge with ViacomCBS on a new service called SkyShowtime, which will include content from Sky, NBCU, Universal Pictures, Peacock, Paramount +, Showtime, Paramount Pictures and Nickelodeon. SkyShowtime is expected to launch sometime in 2022 and reach more than 20 European markets.
– Alan Breznick, cable / video exercise leader, light reading