Peacock reveals its strategy for winning subscribers: spend, spend, spend

Illustration by Alex Castro / The Verge

At the end of the year, more than 9 million of the Peacock's monthly active accounts were being paid members. Peacock plans to double its content budget to $3 billion in the next few years.

In the past, the company has declined to specify the number of its paid subscribers, but this week's figures were surprisingly transparent for a streamer that has recently held its subscriber data close to the chest. The company had 20 million active accounts in July of 2021. Brian Roberts said during the earnings call that the company expects 7 million highly engaged Peacock members to receive Premium at no additional cost through the company's own service.

Peacock is still compared to giants in the space like Disney Plus and Netflix, which have hundreds of millions of subscribers around the world. Peacock's shift in content spend is in line with streamers who are spending billions on original programming to boost their subscribers.

LightShed partner and analyst Rich Greenfield tells The Verge that there is a massive shift in consumers away from traditional TV bundles towards streaming. Consumers want to watch content in this way.

There are three tiers of Peacock: a free and ad-supported plan with more limited content selections, a $5 ad-supported premium plan that unlocks all Peacock's content, and a $10 premium plus plan that removes ads from most of its programming. According to the company's internal research, 80% of customers prefer an ad-supported service over a pricier ad-free option.

Roberts said that the majority of paid subscribers choose the $5 tier over the $10 tier without ads.

Roberts said the company plans to reallocate resources and increase investments in order to ramp up its paid subscriptions. Peacock plans to spend over $3 billion this year, double its budget the previous year, with that company planning to boost that figure up to $5 billion over the next couple of years.

The news today out of the company was more about their plans to spend $5 billion over the next two years than about the 9 million paying subscribers. You need a lot of content around the world.

It's exactly what we're likely to see more of as Comcast shifts its resources to its streaming business. Content is important. Peacock knows it needs to cough up for the programming or step aside.