Decoder with Nilay Patel
00:39:17 · Nilay Patel
[00:39:17] S4: You've brought me to the other Decoder question. I think you've talked a lot about structure already. The other question I ask everybody is how they make decisions. You oversee a group called the decision sciences group. You are describing a lot of decisions that take time to pay off. Right? This is a strategy you set ages ago, the bet on live. You built a platform around it. You're seeing the flywheel spinning now. How do you make decisions? What's your framework and how does that decision sciences group play into it?
00:39:41 · Matt Strauss
[00:39:41] S5: Well, the decision sciences team, it's interesting. When I came to NBC, there was a research department and the research department did what I think a lot of media companies would focus on, which is they're looking at the ratings and they're looking at the demographics and more of a very traditional approach to how they're measuring performance. That to me is different than the muscle that I think we needed to build inside of NBCU, which is more, no, I need to better understand what drives acquisition, what drives engagement, what drives frequency, what drives retention, or what causes someone to churn, What's the propensity for somebody to upgrade? What's the propensity for someone to downgrade? These are very different skills. And so when I talked about early on having centers of excellence, At one point, there were two different groups, one doing research, one doing decision sciences. I would go into meetings, and they would have two different conclusions around how certain things were performing because they were evaluating them differently. And so one group might say, hey, this is doing really well because we grew the audience. And then the other group would say, no, it missed its mark on the paid subscriber additions, and it's not generating the right return. And so the solution was to bring them together as one team. And it's managed by, Will Gonzalez, who has done an unbelievable job in kind of now managing this as one holistic decision sciences and research team. I think when we were building Peacock, maybe we were at a grade school level of sophistication if I'm being a little cagey about it. I think we're now at a graduate school level. The sophistication of this team and their ability to predict forecast across multiple different KPIs is just unbelievable. And so when we sit in a green light meeting and Donna Langley really oversees all the green lighting for entertainment, But we partner together across all of these decisions. We are looking at multiple variables. Again, whether it's what do we think this is going to do from paid subs, from advertising, what's the brand benefit, what is the cohort for this content and other content that we think this cohort may watch on the platform? What do we think that this does to the frequency or the habituation? There's multiple KPIs that we're evaluating when we're greenlighting a show.
00:42:11 · Matt Strauss
It also comes back to who are the audiences we're trying to reach. And one of the things that we've been able to really do is to, we're not trying to cast a broad net and be all things to all people. Like we're not a flea market. We're trying to be very purposeful around how do we super serve the fandoms and the franchises that we think play to our strengths. And so a lot of the decisioning is around how do we grow those audiences? And the decision sciences and research team, I wouldn't say that they are the decision maker, but they are providing us information to make better informed decisions. There's still an art to the science, and so you don't, in my opinion, want to swing the pendulum so far that you're just using data to make predictions. I think that there's a real skill that is around how do you also understand the creative process? But then how do we utilize something like decision sciences and research to make better strategic bets? And I think that that's something that we you're not going get it right every time. But I think that we've done a pretty good job in my opinion in how we've been able to build out our portfolio and predicting where we thought the market was going to go. We predicted that we thought the market was going to move towards bundling. I talked about that in 2019 where I said this great unbundling of cord cutting is likely going to give rise to a great rebundling of streaming. And there was a lot of data that I saw that drew me to that conclusion. And when we were building Peacock, I was not building Peacock to win a streaming war. I was building Peacock for growth after a streaming war. Where do we see them? Where do we think the market was going to be? And if you look at where we are now, where you've got the market that's shifted more towards wholesale bundling, you've got this shift more towards advertising where almost every streaming service is now ad supported with a tier. You've got this real focus now on live events and driving content, whether it's unscripted content or various dayparted content. I would argue that a lot of what streaming looks like today is replicating a broadcast network. A broad household demographic where there's something for everyone in the home that is dual revenue stream and that the market is moving towards bundling.
00:44:38 · Matt Strauss, Nilay Patel
The more you get, the better the price, which is exactly how the cable industry was built. And so everything old is new again. And I think this is like back to the future, but we designed ourselves in a way betting that we thought that that's where the market would go, but equally important, we believe that that would at least play to our strengths, and that's what would work for us at NBCUniversal. [00:45:04] S4: So how do you make decisions? What's your framework?
00:45:04 · Nilay Patel, Matt Strauss
[00:45:04] S4: So how do you make decisions? What's your framework? [00:45:07] S5: Well, my framework is really looking at kind of the hallmarks I mentioned earlier, is how do we drive reach, engagement, and monetization? Those are some of the most critical components. I think that when I project out over the next several years, if there's a streaming war, so to speak, I don't think the streaming war is going to be around subscribers or reach. It's going to be about engagement. It's going to be about how do you grow share of time? How do you grow share of time when there's only twenty four hours in a day, the average consumer spends five to six hours a day consuming mediavideo. That number has been pretty consistent over the past decade. How we consume that media is obviously very different, especially based on where you are demographically. And as more people are spending time, whether it's on social media, on user generated content, on gaming, on podcasting, what are the things that we need to do to continue to grow share of time? Because I know the value of one extra hour per user per month. So a lot of my decisioning is around how do we grow that share of time? Because that's where everything that hangs off of the monetization and the retention and ultimately how I see ourselves continuing to grow as a portfolio.
00:46:37 · S2, S0
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