Peacock and Roku Finally Make a Deal. What Took So Long?

By Scott Porch @scottporch
Published Sep. 20, 2020, 10:15 a.m. ET

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The big players in entertainment and tech are taking their time refocusing the entire $61 billion U.S. TV business from cable to streaming, but things are finally beginning to fall into place.

NBCUniversal’s Peacock, which has been largely unavailable on major TV platforms since its July 15 launch, announced a deal Friday evening with Roku that will make the service available on more than 40 percent of U.S. connected TVs in the next few weeks.

As households shift with alarming speed from cable to streaming — more than 2 million U.S. households ditched traditional bundled TV service last quarter — big media companies like Disney, ViacomCBS, AT&T’s WarnerMedia and Comcast’s NBCUniversal are spending billions of dollars launching and investing in their own flagship streamers.

NBCUniversal and parent company Comcast see Peacock as a big part of their future. Comcast’s broadband business is profitable and growing, and Peacock is already very popular on Comcast’s own Xfinity X1 and Xfinity Flex platforms. Over time, Comcast hopes Peacock will become a dual-threat — an engagement tool for its broadband and cable subscribers and a streamer with best-in-class content that’s free and ad-supported for all households.

Roku gives Peacock 43 million more potential households for:

With large footprints in broadcast, cable and now streaming, NBCUniversal will be able to reach viewers wherever they are and wherever they’re going. The upcoming Joe Exotic series starring Kate McKinnon will air across NBC, USA and Peacock, which will maximize the availability for viewers and ad sales for NBCUniversal.

Peacock soft-launched in April for Comcast’s Xfinity X1 and Xfinity Flex devices and launched in July on iOS and Android mobile platforms, Apple and Android TV devices, and Vizio and LG connected TVs. Roku and Amazon Fire TV account for more than 70% of U.S. connected TVs, though, which left Peacock almost invisible outside of Comcast households and Cox households that use a version of the Xfinity X1 box.

Although Netflix, Hulu, CBS All Access, Disney+, Starz and other streamers that charge a monthly subscription fee and free, ad-supported streamers like Tubi, Pluto TV and Crackle all have carriage across the major TV platforms, NBCUniversal’s Peacock and WarnerMedia’s HBO Max have had a tougher go of it.

The stakes for Peacock and HBO Max — two new streamers that are critical to their companies’ futures — plus the hybridized revenue streams of premium and ad-supported content have put additional pressure on NBCUniversal and WarnerMedia to get these deals right from the outset. According to The Streamable’s Jason Gurwin, Roku wanted: (1) for NBCUniversal to supply content for Roku’s ad-supported Roku Channel, (2) ad inventory across Peacock and the TV Everywhere apps for NBC, Bravo, E!, etc., and (3) integration of Roku’s ad technology into those apps.

Roku and NBCUniversal did not disclose terms, but NBCUniversal had a big incentive to get a deal done. With an estimated 78% of U.S. households now subscribing to one or more streaming services, no major streamer wants to be on the sidelines while those households settle into their streaming habits.

Peacock still lacks carriage deals with Amazon Fire TV and Samsung. HBO Max, which launched in May and plans to add an ad-supported tier in 2021, lacks carriage deals with Amazon Fire TV and Roku. The new agreement between Peacock and Roku may help establish bargaining terms for deals to come.

Scott Porch writes about the TV business for Decider. He is a contributing writer for The Daily Beast and a podcast producer for Starburns Audio. You can follow him on Twitter @ScottPorch.