Decoder with Nilay Patel
00:51:40 · Nilay Patel, Matt Strauss
[00:51:40] S4: Wait, so let me actually ask you about the Love Island. I'm only interrupting you because we've only got a few minutes left. Is it a win for you when the clippers clip Love Island onto TikTok? [00:51:50] S5: So it's a win for me in the sense that you're growing more share of audience. You're opening up the sales funnel. If somebody sees that clip, they may have a higher propensity to then want to tune in and watch it on Peacock. And so that would be the benefit. [00:52:06] S4: Does the Love Island marketing team clip their own show onto TikTok? This is one of my beliefs. We do. This happens a lot.
00:52:11 · Matt Strauss
[00:52:11] S5: We do. And so we make our content available on almost every platform because again, you've got to go where the audiences are. You can't, I think, be so I don't know. You can't go in with an assumption that you're going to be a closed ecosystem and everything has to happen on your platform. I think you've got to go where the viewers are. But in my opinion, our platform should be the best place to experience the content. And so let me use Love Island just as an example to build on the point that you're making, which is that was the number one show for the summer. It was a bit of a phenomenon. It's a good reminder that must see TV still exists. The appointment TV still exists even with younger demographics. Love Island was also an interesting show because a very high portion consume that on mobile devices, which might seem obvious. But in a world where you can watch on a 60, 70, 80 inches television, you still have people who are very comfortable consuming that content on just mobile only devices. And so what happens? Somebody watched that show and it was on six days a week. And then when the show is over, what we do and what every streaming service does is we say, oh, you like this show. You should watch another show. And we try to get you into, you should watch Real Housewives. But that's not what a lot of these viewers wanted. What they wanted at the end of the show was they wanted to talk about what just happened. So they leave the streaming platform. And then they go to social media, or they'll look for a podcast or they'll even play a game. If you could play a game, the number one app by the way over the summer was the Love Island app. It was not ChatGPT. It was not Claude. It was the Love Island app for several weeks of the summer that speaks to what I'm describing around these fandoms. And so we are creating this demand. But then I would argue we're not doing a good enough job super serving them. And then we are fueling this dark matter engagement, that's what I would call it, on these other platforms. And so this is what's leading us to say, Okay, well, what if we put the clips on Peacock and we offer it in a vertical video format? What if we create a podcast for Love Island? What if we create gaming? But it's not any game. These are games that are derivatives of the fandoms and the content that we have on our platform.
00:54:37 · Matt Strauss
Can we better super serve those fans and then grow our share of time? I think that's the opportunity. That's the ambition. It doesn't mean that we're not going to work with YouTube or TikTok or Reels or other platforms. I would just argue that the opportunity is that the best place for our content, our franchises, our IP should be on our platforms. But then to do that, you have to expand the aperture of what you deliver as a platform, which is why I think streaming is too limiting. And you should really think of it more as an entertainment platform designed to maximize share of time and retention. I think the partnership that we announced with YouTube this summer is going to be an example of how we're gonna see ourselves continue to drive more of that audience and engagement across our platform, but also working very closely with YouTube.
00:55:29 · Nilay Patel
[00:55:29] S4: That YouTube deal looks like the rebundling you're talking about, right? Peacock will be available to YouTube Premium subscribers. I have YouTube TV. I imagine that will somehow connect to the dots. YouTube is fascinating because they have the user generated content platform, and then they have TV. Those things are starting to compete with each other. Right? I look at the viewership charts and classic YouTube, user generated YouTube skyrocketing, just eating up everyone's time all day long. Everyone has to be there. YouTube TV... I'm assuming the economics of YouTube TV look like cable for you. Mhmm. They have to be far more lucrative. When you go into a room with Neal Mohan and he... You can say, well, there's the platform that's very lucrative, and there's a platform I have to be on. How do you reconcile the economics of the two?
00:56:11 · Matt Strauss
[00:56:11] S5: From my point of view, it's not one or the other. It's both. And again, it comes back to what I said about they're not exactly the same audiences. Like there's some overlap, but somebody who's subscribing to YouTube TV is not necessarily the same person who is subscribing to YouTube Premium or or consuming content on YouTube main. And I agree with you that when you look at this through the lens of share of time, I mean, has done an unbelievable job creating a platform and a business model that is allowing them to continue to grow. And I don't see anything that would indicate that that's going to slow down. And so when you look at it from my point of view, so much of our content and IP lives on YouTube in some form, whether it's SNL or whether it's Love Island or whether it's clips from The Traitors or any of our NBC shows. But those viewers don't necessarily subscribe to Peacock. They don't necessarily watch NBC or Bravo. And so I think that was the opportunity. That was the unlock, which is how actually can we transform ourselves in a way to reimagine what it could look like to partner with YouTube. And I would say that one of the things when I was talking earlier about this great rebundling, which we talked about and somewhat predicted seven years ago, was that the one thing that held the bundle together in cable television, in my opinion, for many years was sports. And what you don't want to do is you don't want to do a bundle deal without getting the right underlying wholesale economics. Because what will happen is you can take a very high ARPU direct to consumer subscriber and end up cannibalizing them for a low wholesale bundled subscriber. And so what you're really looking for is incrementality. Is this going to drive incremental subscribers? And can I get the right wholesale economics where this is incremental also on the revenue side? I think what's interesting about YouTube is that I think it's a win win. It's a win win because there's multiple components to this deal. One aspect of it, there's going to be a bundle that we're going to launch next year with the ad supported tier of Peacock with a tier of YouTube Premium. And now you're going to get access to all of the benefits of YouTube Premium with the ad supported version of Peacock.
00:58:40 · Matt Strauss, Nilay Patel
We believe that these are mostly incremental subscribers, people who do not necessarily have Peacock today. And so it's going to grow Peacock while it's going to add more value to YouTube Premium. My prediction is if you and I have a conversation a year from now, that Peacock will be one of the top distributed streaming services in The United States. [00:59:03] S4: Do you care that you don't own your last mile customer that way? This was a big reason everyone went to streaming is they were selling their content to Netflix and they realized Netflix owned the customer And we all got to stand up our own streaming services because we want to own the customer and the cable bundle is falling apart. Do you care now that as you rebundle, YouTube will own the customer and