NBCUniversal considers linear channels for its Peacock streaming service

NBCUniversal would join a growing list of companies distributing linear channels on their streaming services to provide free programming for audiences and additional inventory for their advertising businesses. Popularized by free, ad-supported, streaming TV-like services such as Pluto TV and Xumo, over the past two years Roku, Samsung, LG and Vizio have introduced their own so-called “FAST” services that feature 24/7 streaming channels from media companies, and Amazon has been talking with media companies about following suit with its IMDb TV service, though Amazon’s revenue terms have rankled publishers.

Given the preliminary nature of the discussions, media companies have not been given much information about NBCUniversal’s plans. Publishers are not sure whether they will able to take the same channels they run on Pluto TV, Xumo, etc. and distribute them on Peacock or whether publishers will be able to sell any of their channels’ ad inventory; both of which have been important factors in these linear channels becoming a centerpiece of mid-sized media companies’ connected TV strategies. Also unclear is whether NBCUniversal would carry these channels only on Peacock’s ad-supported tier or also on the ad-free version that the company has said it will offer to paying subscribers.

Despite the looming questions, NBCUniversal would appear to be incentivized to carry these linear channels on Peacock in order to help the service to retain viewers and reap revenue from advertisers.

Peacock’s programming lineup will be headlined by original shows, such as the planned reboot of “Battlestar Galactica,” and as old shows like “The Office” and “Parks and Recreation,” and films from the “Fast and Furious” franchise. However, while those programs are likely to be what attracts viewers, the linear channels could help to give those viewers more options of what to watch, potentially increasing the likelihood that people will find something to watch and the amount of time that they spend using Peacock.

In addition to adding to Peacock’s programming library, the linear channels would add inventory for NBCUniversal to sell to advertisers. However, NBCUniversal cannot expect to add publishers’ linear channels to Peacock and find advertisers’ immediately throwing their wallets at the company. Advertisers will likely be primarily interested in buying ads against Peacock’s original shows and its library of old TV shows and movies and consider the linear channels as providing supplementary inventory to fulfill advertisers’ reach-and-frequency demands. “I do see it getting tiered from the buyer’s perspective. The NBC-owned shows and original shows will be one conversation,” said an agency exec.

Not only will ad buyers likely prioritize Peacock’s inventory from its original shows and TV-and-film library over any linear channels it carries from publishers, but “there will need to be a pricing difference,” said a second agency exec. That pricing difference wouldn’t only apply to the linear channels. TV advertisers already prize shows in their current seasons over re-runs and the shows and movies that networks license and would likely apply that hierarchy to Peacock’s programming, with the linear channels in the third tier. “If you’re going to get your hands on TV dollars, that’s the way the TV business works,” said the second agency exec.

Other conversations will need to be had with advertisers regarding the linear channels’ inventory. Some ad buyers have grown leery of services carrying these linear channels because they do not feel like they have enough insight into where their ads ran. Advertisers are typically able to provide streaming services carrying these linear channels with so-called “whitelists” of specific channels to limit their ads to only run on those channels, but they do not always receive in-depth reports detailing the videos their ads appeared next to, said the agency exec.

Nonetheless, NBCUniversal could use the linear channels on Peacock to seize on advertisers’ insatiable appetite at the moment for connected TV inventory, which will likely only grow heading into the service’s launch in April and the annual upfront negotiations that officially kick off a month later. “All [ad] buyers want more connected TV inventory right now,” said an agency exec.