Netflix held its earnings call this week without releasing subscriber growth figures; however, despite this, shareholders remain optimistic about the company’s future. This situation raises questions regarding the competition, particularly Peacock.
A key takeaway from the Netflix earnings call was the subscriber churn, which refers to the rate at which subscribers leave and return to the platform. Many streaming services are enhancing their offerings with live sports, driven by the belief that these events will attract new subscribers who will continue their subscriptions post-event.
Netflix has taken a “big event” approach to sports thus far, involving major events like Christmas Day NFL games and the notable Jake Paul-Mike Tyson fight. Currently, their only ongoing sports-related commitment is with WWE Raw every Monday. They mentioned on this week’s call that the churn related to these events aligns with other prominent entertainment properties, and investors reacted positively, resulting in a significant stock increase following the call.
Conversely, Peacock has also organized significant events, including NFL playoff games and an ample showcase of the Olympics. They possess extensive live sports rights ranging from the English Premier League to college sports, with even more expected next year, including the NBA on NBC.
While external estimates indicated success in subscriber additions from their NFL playoff games a couple of years ago, streaming expert Julia Alexander from Puck offers a contrasting perspective in her analysis of the Netflix news and the overall streaming landscape, noting that Peacock is “still in the red.”
NBCUniversal is still in the red on Peacock, and growth continues to slow. Although Peacock maintains the largest percentage of customers who choose an ad-supported tier in the U.S. (78 percent, per Antenna), its overall engagement is among the lowest, failing to crack 1.5 percent of all time spent with streaming in the U.S. in every non-Olympics month this past year, per Nielsen. The narrative about people signing up for an NFL wild card game and sticking around for Ted and Poker Face is a Hollywood fable.
A contributing factor to Peacock’s struggles—and those of other major streaming companies—is the market share being consumed by social media platforms like Facebook and YouTube. According to the latest Nielsen report from March, YouTube commands 12% of all viewing, while Peacock lags at just 1.4%, even behind platforms like Roku and Tubi. Alexander highlights the surge in video-watching time on Facebook as another challenge.
While these social media platforms lack major live sports rights, their influence on viewers’ streaming habits poses challenges for established services. Ultimately, streaming companies view live sports as a strategic tool for acquiring and retaining subscribers. Peacock has made significant investments in live sports rights; yet, without the ability to improve its metrics and solidify its position in the market, the viability of its entire strategy comes into question.
