In Q2 2023, PARQOR will be focusing on three trends. This essay focuses on "Media companies have millions of consumer credit cards on file. What are they building for their customers?"

To remind you, PARQOR identifies a few key trends each fiscal quarter that reveal the most important tensions and seismic shifts in the media marketplace. Must-read stories or market developments are not always obvious from press reports or research analysis, and often require a deeper dive. PARQOR’s analysis questions established ideas and common wisdom, reassesses the moving pieces, and reveals the potential in the media marketplace in 2023.

Now-former NBCUniversal CEO Jeff Shell was never the optimal spokesperson for Peacock or Comcast’s streaming ambitions more broadly. Take this answer to a question to offer some “color” on Peacock in Comcast’s Q3 2021 earnings call:

“everything on Peacock is heading in the right direction, and there's really nothing from a trajectory perspective that's any different than it was last quarter or the quarter before. All metrics are pointed up. Our usage continues to be great. Our mix of users continues to be great. We added a few million more subs, more MAAs, everything.” 

Contrast it with former WarnerMedia CEO Jason Kilar’s response to a question about the then-newly launched HBO Max ad-supported tier in AT&T’s Q3 2021 earnings call:

“…we're happy not just in terms of the absolute response, in terms of subscribers, but also because advertising helps lower the price and increase the value for an HBO Max subscription. So we see it as rather strategic, and we're very excited about where that goes.

One thing that is interesting to note… is that until the end of the year, there is a slight difference in the product of ad-supported HBO Max in that the movie, specifically Matrix, King Richard and Dune, are not part of the ad-supported offering. So there will be full content parity starting in late January of 2022.”

Neither answer is “better” than the other: Shell offered all the right legacy media buzzwords investors like to hear, while Kilar offered guidance on how to think about the AVOD business model, which investors also appreciate.

But Kilar’s answer reads more product and consumer savvy than Shell’s, and that always struck me as more in-line with how heavily Comcast relies on the products and infrastructure of its Connectivity & Platforms business ($20.1 billion in revenues and $8 billion in EBITDA in Q1 2023). After Shell’s firing and today’s earnings call, it seems harder to identify what problem Peacock as a product solves for consumers, and why Comcast is losing billions annually to build out Peacock.

Key Takeaway

Jeff Shell was not a product-focused CEO for NBCU. That may be one reason why it has struggled. But Comcast's salesmanship of its Xumo joint venture suggests that Peacock's value proposition is not evolving fast enough for its target customers.

Total words: 1,700

Total time reading: 7 minutes