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State of the Screens

NBCU’s Peacock Reaches New Heights (And Customers) With Roku Deal

By September 24, 2020November 15th, 2021No Comments

Big news: Peacock is coming to Roku!

Related: My thoughts on Peacock’s Impact on Convergent TV Advertising

Why this matters #1: Roku has 100M+ users (43M HH) in the U.S., which accounts for 44% of CTV viewing time.  This deal should accelerate adoption for Peacock and provide Roku with additional advertising revenue.

Roku users (YoY growth) in the U.S. according to eMarketer:
1) 2010 – 4M
2)
 2011 – 6M (↑ 46%)
3) 2012 – 8M (↑ 33%)
4) 2013 – 10M (↑ 20%)
5) 2014 – 15M (↑ 51%)
6) 2015 – 22M (↑ 49%)
7) 2016 – 33M (↑ 47%)
8) 2017 – 47M (↑ 45%)
9) 2018 – 63M (↑ 33%)
10) 2019 – 79M (↑ 26%)
11) 2020P – 100M (↑ 26%)
12) 2021P – 110M (↑ 9%)
13) 2022P – 117M (↑ 6%)
14) 2023P – 120M (↑ 3%)
15) 2024P – 123M (↑ 2%)

Why this matters #2: Things started to get messy with Comcast threatening to pull 46 NBCUniversal apps from Roku’s platform.

NBCUniversal apps on Roku, according to Variety:
1) Telemundo – 23
2) NBC Local – 12
3) NBC network – 11

As a part of the deal, some NBCUniversal content is heading to the Roku Channel.

Flashback: NBCU’s Peacock Takes Flight, But Can It Soar Without Amazon and Roku?

Peacock sign-ups (% change) according to Comcast:
1) JUL-20 – 10M
2) SEP-20 – 15M (↑ 50%)

Big question: How is the advertising inventory split between Roku and Peacock?

Quick answer: Unknown.

Quick math on the advertising model for Peacock:
1) 
Ad minutes/hour – 5
2) 
30s spots/hour – 10
3) Ad revenue/user/month – ≈ $5.20 (see below)
4) CPM $ –  $30
5) $/spot – $0.03
6) Spots/month – 173
7) The service hits revenue target at 17 hours/viewer/month

Our take: Advertising currently accounts for ≈ 70% of Roku’s revenue, and we project it will be 80% for Peacock.  The difference between a 15% inventory share and 30% is massive.

Projected hours/user/month for ad revenue goal (% increase) for Peacock:
1) 
0% advertising split – 17
2) 
15% advertising split – 20 (↑ 18%)
3) 30% advertising split – 25 (↑ 25%)

More: Three Dynamics in the Roku ($ROKU) and Comcast/NBCU ($CMCSA) Standoff

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.

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