Why Peacock is making a huge bet on YouTube

Today, I’m talking with Matt Strauss, who is now chairman of the NBCUniversal Media Group. This is Matt’s second time joining me on the show, and there’s been a whole lot of organizational and structural change at NBCU since the last time he and I spoke just two years ago — pure

Today, I’m talking with Matt Strauss, who is now chairman of the NBCUniversal Media Group. This is Matt’s second time joining me on the show, and there’s been a whole lot of organizational and structural change at NBCU since the last time he and I spoke just two years ago — pure Decoder bait. First, about a month after Matt was on the show, Comcast spun off most of the NBCU cable channels into something called Versant.

That’s when Matt’s title changed from heading up just the direct-to-consumer offering — meaning Peacock, plus some other streaming services — to heading up the whole thing, across all distribution. And now, Comcast is spinning off the NBCU business entirely into a whole new standalone company. Verge subscribers, don’t forget you get exclusive access to ad-free Decoder wherever you get your podcasts.

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That’s a lot to have going on all at once! And meanwhile, it’s only just this year that Peacock became an actual profitable business at all — and it’s still pretty far away from being anything like the juggernaut that Netflix is. But what NBCU has, and what Peacock has, that the rest of the streaming industry is still trying to wrap its head around, is live sports.

Sports are huge. They held up the cable industry for years, they held up broadcast, and now they’re the big thing that could make streaming a winner for NBC. One thing before we start: You’ll hear me ask Matt about the red company and the blue company.

That’s just my way of getting Matt to talk about Netflix and Skydance, the company that now owns both Paramount and Warner Bros. Discovery. I think he did a good job playing along.

Before we get going, do me a favor and subscribe to Decoder on YouTube, where we put out new episodes every Monday and Thursday. Okay: Matt Strauss, chairman of the NBCU Media Group. Here we go.

This interview has been lightly edited for length and clarity. Matt Strauss, you are the chairman of the NBCUniversal Media Group. Welcome back to Decoder .

Thank you so much, Nilay. It’s great to be back. I am very excited to talk to you.

There’s a lot going on in the media. It is a tumultuous time in Hollywood. I have to tell the audience that you and I are speaking minutes after Anthropic filed its S-1 , and all of humanity is going to be turned into AI.

Who knows what entertainment we’ll be watching in the future? There’s a lot going on. Let’s start at the very beginning of this.

You have a new job since last time you were on the show. Last time, you were the head of Direct-to-Consumer — you were basically the head of Peacock and the other apps inside the family. Now you’re the chairman of NBCUniversal Media Group.

What’s the new job? What does that mean? NBCUniversal Media Group is comprised of certain services within NBC.

It’s the broadcast network, it’s Bravo, it’s Peacock, it’s NBC Sports. We also have NBC News and Telemundo. One of the things that we recognized, especially when we spun off some of our cable assets last year into Versant, was that the assets we had truly worked better together.

NBC has been like a megaphone. Given the reach of NBC, it’s been incredibly strategic in growing Peacock, which is a bit ironic because I think so many people believed that broadcasting was a bit of a relic of the past in this digital world, but it’s actually proven to be the opposite. As things have gotten more fragmented, having a broadcast network is actually a superpower because we’re continuing to see ratings growth.

That has been really helpful as we’ve been building out Peacock. But actually, Peacock was also finding new audiences, like cord cutters or people who maybe didn’t grow up watching NBC or some of our cable networks. So, Peacock’s also been really strategic in reaching and driving people back to NBC and Bravo.

So, I think that flywheel is where we recognized that we needed to start operating differently. I’ve been a huge advocate of what I like to call “centers of excellence” in how I like to structure the business, which is, content first and platform second. How do we get maximum reach, maximum engagement?

That really required us thinking differently about how we were running the business. Essentially, instead of having a programming group within broadcast and a programming group within streaming, we just collapsed the business. Now you’ve got one programming team, one marketing team, one product and technology team, one decision sciences and research team, and one advertising team.

They’re all incentivized around continuing to grow the portfolio, get that maximum reach, maximum engagement, and drive top-line revenue. I think that structure, which we put in place about 18 months ago, is contributing to a lot of the success that we’re seeing now. Even if you look at 2026, NBC is the number one network in total viewers.

We had an unbelievable early part of the year with “Legendary February,” which you might remember. That’s when we had the Super Bowl, the Milan Cortina Olympics, and the NBA All-Star Game. In 17 days, we reached over 225 million viewers.

This summer, we had Love Island , which was the number one show of the summer for streaming. You had the World Cup, which was the number one Spanish-language sporting event in US history on Telemundo and Peacock. We had a show called The Five-Star Weekend , which was our number one scripted drama.

Now, we’ve led ourselves into the fall, where we have Sunday Night Football, which has been the number one show for 15 consecutive years. We had a great kickoff with over 25 million viewers. We just had the NBA tip-off last week with the Knicks and the Sixers, which is the number one rated tip-off in NBA history.

So, it does feel like we’re firing on all cylinders in how we’re trying to operate with this, again, content-first-platform-second mantra. But just to go one level deeper, a big part of this strategy is figuring out how do we move audiences across platforms. For example, when I mentioned that Love Island was the number one streaming show of the summer, 40 percent of those Love Island viewers also tuned in to watch the World Cup.

So, migrating viewers back and forth across the portfolio is a critical part of how we see ourselves continuing to grow. But to effectuate that, you need to structure yourself in a way where people are incentivized along that vision. We’re still evolving as an organization, but I’m really proud of some of the milestones and accomplishments that we’ve made as a team.

I love my job. I feel like I’ve got the best job in the industry at the moment. It is a tumultuous time in Hollywood, and you seem like one of the happiest people in the industry right at the second.

That is very notable. You’re a Decoder pro, you brought up structure. I’m dying to ask you about the Decision Sciences Group.

That’s the other question I ask everybody. But let me just back out for one second. You’re describing quite a lot of freedom in rethinking how something like NBCUniversal would work.

You mentioned the Versant spin, so CNBC, MS Now, and a bunch of channels went that way. I’m on its networks all the time. I would describe the folks at Versant as feeling more free.

They’re disconnected from the battleship that was Comcast and NBCUniversal. They can go try whatever they want to try. They’re energized by it in some ways.

Then, Comcast looked at NBCUniversal and said, “We’re going to spin off that off as well. We’re going to be the cable business and NBCUniversal will be the entertainment business, and now you’re in charge of that.” You’re like a 20-year Comcast veteran. I think you got your start doing cable boxes.

Yep. I started in 2004 at Comcast. Just tell me about that process.

We spun off CNBC and MS Now into Versant. Now we’re looking at this company. We ought to spin off NBCUniversal as well.

Just tell me about how that came about. What was that moment like? Did you all sit in a boardroom?

Did it come down from on high? How did that happen? Well, that decision really was made by Brian Roberts and Mike Cavanagh.

Candidly, I was not in the room when that decision was made, but I think if you were to ask people at NBCUniversal, it makes strategic sense. Do you feel that same sense of freedom? You know what?

I think that there’s an energy. When people show up here, they feel very passionate about what they do. They believe in our strategy, they believe in our portfolio.

Look at NBCUniversal more broadly. Before, I was describing the Media Group, but that is one piece of the broader company. You have Universal Pictures and Universal Television, which have obviously been having an unbelievable summer with The Odyssey and Obsession .

You’ve got Universal’s theme parks and experiences. We opened up Epic Universe last year. We opened up a kids theme park in Texas.

We announced we’re going to open up a theme park in the UK . We have Sky, which was part of the company but more squarely sat within Comcast Cable. Now that’s going to migrate over to the new NBCUniversal as part of this restructure.

Then, you have these media assets, which I spoke about earlier. So, you’ve got this unbelievable portfolio. I think that people here really believe in our growth and that if we’re a separate company, it’s going to allow us to move faster.

It’s going to let us have more clarity around where we want to make capital allocations and decisions. There are a few areas that really play to our strengths as an organization. One of them is live sports and live events.

That’s always been a part of NBCUniversal that we’re really known for. If you just look at the sports portfolio that we have, Nilay, we’ve got NFL, NBA, MLB, the Big Ten Conference, the Premier League. We’ve got the Olympics with the IOC.

You’ve got this unbelievable portfolio of sports content, and that’s a strategic asset when we’re partnering with the leagues because we believe in broadcast. We believe in broad reach. We’re not trying to put everything exclusively on a streaming platform.

In 2026, we’ve demonstrated across almost every single sport that we can actually continue to grow ratings and reach new audiences, which is something that’s becoming more and more complicated. Can I ask about that? Because you also run Peacock, which is a paid streamer where you can access sports.

When you say grow ratings on broadcast, are more people putting up antennas to watch sports over the air? No. What I mean… By the way, about 20 percent of TV households in this country do still use over-the-air antennas as— Oh, we have lots of listeners who are going to tell you that’s the best picture quality you can get.

Yeah. It is amazing picture quality, especially if you live in the right look angle where you could pick up the signal. It comes back to what I said earlier about managing as a portfolio.

We don’t think of it as a broadcast business sitting next to a streaming business. We really position ourselves as a digital-first company trying to get that maximum reach. When we look at the ratings, we’re combining what you would think of as more traditional ratings for linear television with streaming and all of our digital platforms.

Whether that’s DVR or TV Everywhere, we aggregate it into one platform. When you look at it through that lens, which is just audience, we’ve actually demonstrated that across almost every sport — NFL, NBA, or MLB — the total viewers that we are reaching now are, in some cases, the highest they’ve been in decades. Even the Super Bowl, which we had earlier this year on NBC, reached about 137 million viewers at its peak, and that’s across all of our platforms.

That Super Bowl was the highest-rated live event in NBC’s 100-year anniversary, which is this year. It’s kind of counterintuitive, but what we’re showing is that when we start operating as one, we can reach new audiences and we can aggregate them. We are demonstrating that not just across sports.

There’s even something like the Thanksgiving Day Parade, which has been an institution on NBC for 99 years. This past Thanksgiving Day Parade was the highest-rated parade we have had in the company’s history. So, there’s a renaissance happening around live.

In a world of instant gratification, on demand, and watching what you want when you want, the fact that you’re now seeing more and more viewers wanting the collective consciousness of social viewing, things that still matter in today’s society, that actually plays to our strengths. And we’re seeing that manifest itself with higher ratings. But as I mentioned, it’s also a big part of our strategy.

It was a big part of our Peacock strategy, which was a bit of an anomaly when we launched Peacock six years ago. It’s also a huge part of what I think NBC does well, which is that we create these big tentpole events and we’re able to shine a light on them and get huge audiences that are continuing to show up, even in a world of fragmentation and cord-cutting. It’s interesting that you’ve described it as content first and platform second, and then you’re describing your approach to ratings as agnostic to distribution.

You’re just sort of combining everything and saying, “This is the number of people we reached.” Well, take something like the Milan Cortina Olympics. This is an interesting example. If you were to look at that Winter Olympics, we had roughly 3,200 hours of content.

There’s no way we can make all of that available on one network. There’s no way to daypart 3,200 hours. If you remember what we did with the Paris Olympics, we made the decision to make every event available live.

When you make it all available live, we put it all on Peacock. This was a very controversial decision because the question has always historically been that if people tune in to watch this live during the day on Peacock, are they going to tune in to watch NBC primetime? Are we going to cannibalize our ratings or are we going to grow the ratings?

This is where we really tested this strategy. If we’re truly indifferent, then what should happen is that we should be able to expand the funnel during the day, get more people into the Olympics, and try to create an experience that we’re very proud of. We really do believe, whether it was the Gold Zone or Multiview, that we were able to surprise and delight viewers and make it really easy to navigate and find all of the choices on Peacock.

But then what happened was that people were tuning in to watch NBC during primetime because there’s a difference between what NBC does and what Peacock does. NBC was more about storytelling. It was more about, “Let’s talk about what happened today.

What about the backstory of the athletes? How’s Mike Tirico going to address his perspective on things?” When you combine these two things together — putting all the content on Peacock and then having the primetime show — this Winter Olympics had about a 96 percent higher rating. About 25 million viewers were tuning in to watch the Milan Cortina Olympics, which was about 96 or 97 percent higher than Beijing.

On the digital side, it was double the digital minutes of every other Winter Olympics combined. We also doubled the advertising revenue. You’ve got to be willing to break some glass.

This is going to seem so obvious, but it starts with the consumer. It starts with, “How do we approach the consumer and give them the best experience?” And if you build it, they will come. The only reason I’m using the Olympics as an example is because if you were to look at the past, this was a real pain point where we didn’t make everything available on streaming or it was confusing for some viewers to figure out how to navigate all of the choices.

We really, as an organization, decided to put our shoulder behind this, and I think the results ultimately speak for themselves. But again, it ladders back up to this vision of really starting to manage as one portfolio. If you can drive that maximum reach and engagement, that’s also going to be where you’ll get the best monetization.

The Verge team in particular was addicted to Gold Zone , which was the whip-around coverage of every medal event. It was very fun. Let me ask you about this.

A big Decoder trope is that your distribution fundamentally affects what you make, right? That the medium is essentially the message, and I know what a YouTuber makes because they’re on YouTube, and I know what a TikToker makes because they’re on TikTok. I could stretch this all the way back and say I know what broadcast TV looks like because the medium of broadcast TV has fundamentally shaped the content that gets made there.

I know what cable shows on Bravo look like, and they’re not the same thing and they haven’t been for a while. You’re describing, “We’re going to bring programming in, we’re going to centralize that, we’re going to be agnostic to distribution — or indifferent I think is the word you used — and that’s going to increase viewership.” But the pressure of the different distributions is still there, right? Running the broadcast network over the air is still different and reaches different people than distributing on YouTube TV, than running Peacock as a paid platform unto itself.

How do you manage that tension? Because it is real. Yeah, it is very real.

It’s a really insightful question. The tension is real, but actually, I don’t view it as tension. I view it as an opportunity because you’ve got different audiences.

If it’s a Venn diagram and you look at who’s the audience on broadcast versus the audience on cable versus the audience on streaming, there’s some overlap, but it’s not as much as you would think. That actually speaks to this broader strategy, which is, “How do we reach?” If we reach all these different viewers but they’re on different platforms, how do we start bringing this together into one? Now there’s multiple ways to effectuate that kind of a strategy.

One is you start sharing content and window content differently across platforms. For example, we have a show on Peacock called The Paper . Greg Daniels created it, who also created The Office .

It’s a really great comedy and it’s an original. If you were to look at how streaming services typically make originals available, they’re exclusive. You premiere it on your streaming platform, and it typically stays on that platform forever.

What we’re starting to experiment with is, well, what if we premiere The Paper on Peacock but then introduce it onto NBC six months later? Now you’re bringing a show that was created for streaming and making it available on NBC to a new audience. You also have this added message, which is that if you want to watch next week’s episode now, go get Peacock.

All of a sudden, NBC is not only reaching new audiences but it’s also becoming a sales channel for driving people back to sign up for Peacock. Do you give that to Greg Daniels? The feedback loop of a YouTuber is so blunt.

I’ve made a handful of Instagram Reels in my life. I literally open and look at the retention chart and think, “Oh, I should put another hook in there in the middle to keep my viewers,” and it’s immediate. That’s not even how my brain works.

It’s immediate that the data makes you think this way. If you say to Greg Daniels, “Hey, make sure episode two of The Office ends on a cliffhanger so that I can advertise watching the next episode right away on Peacock. Well, Donna Langley, who oversees all of the entertainment programming, would be the one calling Greg Daniels and giving him that feedback.

But here would be a different way to answer that question. I don’t think we’re necessarily trying to change the framework of how some of the shows are being created on NBC or Peacock. There’s still something about premium content and how that’s being created that I think resonates with a lot of people.

But here’s what we’re thinking differently. Take a show like Saturday Night Live. We had the 50-year anniversary for SNL a couple of years ago, and it’s unbelievable what Lorne Michaels has created.

You still have SNL that’s on at 11:30PM ET, but what if we now take that content and we format it for vertical video on Peacock? We know that there’s a whole cohort of people that are watching on their phone, holding it vertically, and likely using their forefinger or their thumb to navigate because of TikTok or Reels. They’re watching a show like SNL on YouTube in some cases as well.

Instead of trying to recreate or tell viewers how to watch the content, why don’t we just take that content and reformat it in a way that’s more akin to them? So now, you can go to Peacock and you can watch content in a vertical video format. That may not be for you, but it might be for somebody else who wants to swipe from sketch to sketch because that’s how they enjoy it.

Let me give you another example, which is sports. I mentioned earlier about how we tried to introduce new features around sports because it’s such a passionate fandom. You can’t change the way somebody watches an NBA game.

People want to watch an NBA game in the way that it was produced, but the lines are getting blurred around what’s a live event and what’s a video game, especially if you grew up playing NBA 2K . We’ve introduced something called Performance View , which is on Peacock. You could watch the NBA game or you can enable Performance View.

If you enable Performance View, an overlay comes down on top of the game, and now it looks like a video game where we’re pulling in real-time sports data from sports radar, calculating the probability of somebody making a shot, using graphical overlays to show the trajectory of the ball, or putting the names over the player’s heads just so it’s a little bit easier to follow what’s going on. You’re not changing the core production, you’re enhancing it. The enhancement of all these types of tactics and features — whether it’s through something like Performance View, something like I’m describing with SNL , or it’s rethinking the windowing of the content — is allowing us to reach new viewers but also allow them to consume the content on their terms.

And the way you watch may be different than the way I watch, and we’re just trying to give viewers different choices to enhance their experience. One thing I always think about in terms of distribution is that every distribution channel is more or less valuable. The monetization is more or less lucrative.

I can make 1 million Instagram Reels today and they will make me $0. But more people will see my face, and then maybe I will sell them a The Verge subscription, the Decoder book, or whatever it is in the future. That’s the creator economy, right?

It’s 10 million little ad agencies. Instagram doesn’t pay for the content, and they all have to monetize it some other way. Then there’s, I don’t know, Peacock or Netflix where I pay a subscription fee and the content is there, so there’s that monetization model.

There’s the movies. You can go and pay to watch one movie one time and that’s going to be very lucrative for Christopher Nolan — maybe nobody else, but it’s very lucrative for Christopher Nolan. Which one is most valuable for you?

You’re describing everything, but some have to make more money than others and some attract more new audiences than others. You’re trying to bring people from the biggest audience to the most revenue. I want to give a lot of credit to our ad sales team and Mark Marshall, who oversees ad sales.

Several years ago we recognized that if you really want to have this kind of a strategy and vision (like I said, content first, platform second), you need to become almost agnostic around where the consumption is happening. We made the decision to actually sell as one portfolio. When you’re buying advertising, we are combining the audiences across broadcast, cable, streaming, and digital, and that’s how we sell it and go to market.

That’s actually been the way that we’ve been doing this now for several years. Is advertising the number one line of revenue here? Because on cable, when you were part of Comcast where I’m sure the rates were not as high as you could get now that you’re split, Comcast just paid you carriage fees.

We are a dual-revenue stream business. Advertising is very much a material part of the overall revenue stream, not just of NBC and cable but of Peacock. If you remember, this was a big part of our strategy when we launched Peacock six years ago because the streaming market was very focused on ad-free, binge viewing, scripted dramas, and growing subscribers at any cost.

That was the future. We zigged while the rest of the market zagged. We believed the white space was actually going to look more like broadcast television.

From the beginning, we saw Peacock as an extension of the broadcast business instead of trying to build a standalone streaming business. If you look at it through that lens, that has influenced all of our programming decisions around live events and sports, and around why we wanted to have movies and scripted but also unscripted and news. The belief was that streaming was going to look a lot more like television.

If the viewership moved to streaming, why wouldn’t the advertisers move to streaming? Eighty percent of the subscribers on Peacock are on our ad tier, which is a higher mix of advertising subs than I think almost any other streaming service, but that’s because of decisions we made six years ago. The platform that we built for Peacock was designed for live.

When you see something like an exclusive NFL playoff game, the Olympics, or the NBA tip-off, the reason why our platform scales and why you’re probably not talking about pixelation, buffering, long latency, or high app crashes is because we spent years doing nothing but wanting to harden the platform because we believed that we needed to build a live platform for scale. To your question, all of this kind of compounded itself. Whether you’re watching something on NBC or Peacock, we sell it as one.

That has allowed us to go to market in a way that I think really does allow us to punch above our weight when it comes to advertising and monetization. It’s a critical part of our strategy. I think about 30 percent of our advertising revenue six years ago came from sports and streaming.

Now it’s probably closer to 60 percent of our advertising revenue is coming from streaming and sports. So, all of that gets aggregated as part of this broader portfolio approach. I’m curious about the sports piece of it, the NFL in particular.

The NFL just keeps getting more expensive . That’s the business it’s in. It’s going to keep charging you more money for rights.

I think all the other sports would like to keep getting more expensive. They maybe don’t have the leverage the NFL seems to have. That made sense in a world of carriage fees.

The NFL would say, “We’re going to cost a lot of money. We’re going to go out to broadcast networks.” Then, the broadcast networks are going to turn around to their distributors and say, “Well, if you want the NFL games, you’ve got to pay what they cost plus our margin.” Then, my price all the way at the bottom at the consumer end would go up, and my cable bill would go up. I think everyone understands that is the thing that happened for years and years.

That is unbundled, right? You are describing the unbundling of that entire business model. But the price of NFL rights, for example, keeps going up.

A lot of analysts I talk to are basically saying, “Look, at some point Amazon and Apple are the only companies that are going to have enough money to buy the NFL package.” NBCUniversal — standing alone outside the Comcast revenue that would keep it afloat — is going to have to raise rates to some extraordinarily high level just to compete with the big tech giants that own the own streaming platforms and run them at a loss. That is very challenging mathematics, right? If your business is based on live, you’ve got to stand up live events that people definitely want to watch.

Sports is at the top of that list. The sports leagues know that, and they’re going to keep coming at you with higher and higher demands. How do you manage that without making Peacock’s price skyrocket?

If you look at our strategy (we’re looking at this across our entire portfolio and our entire ecosystem), I think one of the benefits that we bring to the table with the leagues is that we’re not looking to make the content available on just streaming or broadcast. It’s both. That allows us to grow reach, which is a good thing for the leagues.

I think all of that has to be taken into consideration when they’re looking at how they want to go to market with their rights. I mean, we have a very long history with the NFL. It’s a strong partner of ours.

Sunday Night Football has been number one on NBC for 15 consecutive years, but we also entered into an 11-year arrangement with the NBA. As I mentioned, I think it’s been very happy with the relationship. We’ve been happy with the first year of the NBA relationship because it grew audience for us.

It allowed us to manage how we’re thinking about having a weekly cadence of premium sports on Sundays with the NFL, the NBA, and now the MLB. It’s allowed us to grow more advertising. When the flywheel works, it allows us to partner with the leagues in creative ways.

Everything has to be evaluated when you’re looking at this, whether it’s sports or entertainment programming. But I think of it like a mutual fund. What’s the content that’s going to drive acquisition?

What’s the content that’s going to drive engagement? What’s the content that’s going to drive frequency? The answer to that question could change depending on where you are in the life cycle of your business.

You might have certain content that’s a loss leader, but it’s adding value elsewhere in the portfolio. That’s generally how we’re evaluating when we’re going into a rights negotiation. I’ll give you another example of this.

When we were launching Peacock, we entered into a relationship with the WWE. We thought that the WWE would be a really great addition to Peacock for a few reasons. I wanted to have something that was on every month.

It’s got their premium live events, which it does every month. That would create a cadence, which we thought was critical in streaming. How do you get somebody to open up your app?

How do you build habituation? We thought the WWE could do that with premium live events. It also had a huge catalog of WWE programming, which gave us more tonnage.

We were also able to look at the addressable market for the WWE and estimate what percent we thought we could penetrate. Then we know the CLV of a customer, so you can calculate the return on the investment when you’re going to go after a certain rights package. For the listener, what’s the CLV?

The consumer lifetime value. What’s the Average Revenue Per Unit (ARPU), multiplied by the number of months that you retain a customer before they would churn. That’s generally the formula that you would look at.

The reason I’m kind of laying it out this way is that if you’re making decisions that are longer term, you’re thinking about how does this fit into a broader portfolio view. In the case of the WWE, it was actually a real win-win because we acquired subscribers through the WWE. I think the WWE was happy with it because we were also able to bring in new viewers to sample and experience it.

But when that deal came up for renewal, tthe license fees went up pretty dramatically, and it ended up going to another streaming service. We were actually okay with that because what we really focused on was how to take those WWE viewers and habituate them. What we found was that WWE fans really like The Fast and the Furious .

They really like Yellowstone . They like other stuff. [Laughs] I’m sorry, did you need to open the spreadsheet and figure that out or did you just intuit that one?

[Laughs] Well, we have assumptions, but you have to test these hypotheses. The elegance of this strategy for us was that what we were really calculating, well, if I don’t renew this content, how many subscribers can I retain? We were able to retain the majority of those subscribers.

We ended up licensing a much smaller package of WWE programming. We were able to retain those subscribers because we had habituated them into other content. Then, we took the money that we were utilizing to license the premium live events, and we reallocated it into other parts of the portfolio.

That’s the mindset for how we are approaching these deals. If the economics make sense, they make sense. If the economics don’t make sense, then we look to how we reallocate that investment into other parts of the portfolio and try to find a comparable or better return.

It’s an evolving, living, breathing strategy and approach for how we go to market when we’re looking at any type of content, whether it’s sports or entertainment. You’ve brought me to the other Decoder question. I think you’ve talked a lot about structure already.

The other question I ask everybody is how they make decisions. You oversee a group called the Decision Sciences Group. You are describing a lot of decisions that take time to pay off, right?

This is a strategy you set ages ago when you bet on live. You built a platform around it. You’re saying the flywheel is spinning now.

How do you make decisions? What’s your framework, and how does that decision sciences group play into it? It’s interesting.

When I came to NBC, there was a research department, which did what I think a lot of media companies would focus on. They would look at the ratings and the demographics and take more of a traditional approach to how they’re measuring performance. That, to me, is different than the muscle that I think we needed to build inside of NBCUniversal, which was, “No, I need to better understand what drives acquisition, what drives engagement, what drives frequency, what drives retention or what causes someone to churn.

What’s the propensity for somebody to upgrade? What’s the propensity for someone to downgrade?” These are very different skills. When I talked about early on having centers of excellence, at one point there were two different groups: one doing research and one doing decision sciences.

I would go into meetings, and they would have two different conclusions around how certain things were performing because they were evaluating them differently. One group might say, “Hey, this is doing really well because we grew the audience.” Then, the other group would say, “No, it missed its mark on the paid subscriber additions, and it’s not generating the right return.” The solution was to bring them together as one team. It’s managed by Will Gonzalez, who has done an unbelievable job in managing this as one holistic decision sciences and research team.

When we were building Peacock, we were maybe at a grade school level of sophistication, if I’m being a little cagey about it. I think we’re now at a graduate school level. The sophistication of this team and their ability to predict and forecast across multiple different KPIs is just unbelievable.

Donna Langley really oversees all the greenlighting for entertainment, but when we partner together across all of these decisions, we are looking at multiple variables, whether it’s paid subs, advertising, or what is the brand benefit. What is the cohort for this content and what other content do we think this cohort may watch on the platform? What do we think that this does to the frequency or the habituation?

There are multiple KPIs that we’re evaluating when we’re greenlighting a show. It also comes back to who are the audiences we’re trying to reach. One of the things that we’ve been able to do is… We’re not trying to cast a broad net and be all things to all people.

We’re not a flea market. We’re trying to be very purposeful around how we super-serve the fandoms and the franchises that we think play to our strengths. A lot of the decision-making is around how do we grow those audiences?

I wouldn’t say that the decision sciences and research teams are the decision-maker, but they are providing us the information to make better informed decisions. There’s still an art to the science, and so in my opinion, you don’t want to swing the pendulum so far that you’re just using data to make predictions. I think that there’s a real skill around understanding the creative process, but then how do we utilize something like decision sciences and research to make better strategic bets?

That’s something you’re not going to get right every time, but we’ve done a pretty good job, in my opinion, in building out our portfolio and predicting where we thought the market was going to go. We predicted that the market was going to move towards bundling. I talked about that in 2019, where I said this great unbundling of cord-cutting is likely going to give rise to a great re-bundling of streaming.

I saw a lot of data that drew me to that conclusion. When we were building Peacock, I was not building Peacock to win a streaming war. I was building Peacock for growth after a streaming war.

Where do we think the market was going to be? If you look at where we are now, where you’ve got the market that’s shifted more towards wholesale bundling and towards advertising where almost every streaming service is now ad-supported with a tier. You’ve got this real focus now on live events and driving content, whether it’s unscripted content or various dayparted content.

I would argue that a lot of what streaming looks like today is replicating a broadcast network: There’s a broad household demographic where there’s something for everyone in the home with a dual-revenue stream. That market is moving towards bundling — the more you get, the better the price — which is exactly how the cable industry was built. Everything old is new again.

I think this is back to the future, but we designed ourselves in a way where we bet that’s where the market would go. Equally important, we believed that would at least play to our strengths, and that’s what would work for us at NBCUniversal. How do you make decisions?

What’s your framework? Well, my framework involves looking at the hallmarks I mentioned earlier: How do we drive reach, engagement, and monetization? Those are some of the most critical components.

When I project out over the next several years, if there’s a streaming war, so to speak, I don’t think it’s going to be around subscribers or reach. It’s going to be about engagement. It’s going to be about how to grow share of time.

How do you grow share of time when there’s only 24 hours in a day and the average consumer spends five to six hours a day consuming media / video? That number’s been pretty consistent over the past decade. How we consume that media is obviously very different, especially based on where you are demographically.

As more people are spending time on social media, user-generated content, gaming, podcasting, what are the things that we need to do to continue to grow share of time? I know the value of one extra hour per user per month, so a lot of my decisioning is around how to grow that share of time. That’s where everything hangs off of the monetization, the retention, and, ultimately, how I see ourselves continuing to grow as a portfolio.

I was looking at our past conversation just before we started, and you are an all-star champion of not talking about your competitors. So, I’m just going to say there’s a red company and a blue company. You can guess who they are.

I can just tell you who they are. There’s a red company and there’s a new blue company that just consolidated. They’re hypothetical.

The red company is going through some tumult . They were built on the idea, “We want one extra minute of your time.” They were built for the attention economy. They would famously say things like, “Our only competition is sleep.” They’ve added things like video games and podcasts, and it doesn’t seem to be working for them.

If you ran the red company, what would you do? Well, in my opinion, the red company is an incredible company. I think they’ve done an unbelievable job — This hypothetical company is doing such a good job!

Well, every company goes through changes, but I don’t think I would lose sight of what they’ve built. You have some incredibly smart people in that company, and I would not bet against them. I think that if anybody could figure out how to continue growing share of time, I think it’s the red company, I think that they are poised for continued growth.

But to me, that doesn’t mean that there’s a winner that takes it all. It’s kind of like broadcast. There wasn’t one broadcast company, there were four broadcast companies.

There wasn’t one cable network, there were dozens of cable networks. I don’t think somebody else has to lose for us to win as a company. Let me give you an example of what I mean when I think of growing share of time.

The way I would think of it, Nilay, is that you shouldn’t think of us as a streaming platform. To me, streaming is too limiting. Think of it as an entertainment platform.

On this entertainment platform, you’ve got tens of thousands of hours of premium video content. You could watch what you want when you want it, and there’s also all this great live programming. But what we do, in my opinion, with this premium content is partially fuel the share of time that’s happening off of my platform.

Take for example a show like Love Island — Wait, let me actually ask you about Love Island. I’m only interrupting you because we’ve only got a few minutes left. Is it a win for you when the clippers clip Love Island onto TikTok?

It’s a win for me in the sense that you’re growing more share of audience. You’re opening up the sales funnel. If somebody sees that clip, they may have a higher propensity to tune in and watch it on Peacock, so that would be the benefit.

Does the Love Island marketing team clip its own show on to TikTok? One of my beliefs is that this happens a lot. We do.

We make our content available on almost every platform because, again, you’ve got to go where the audiences are. You can’t go in with the assumption that you’re going to be a closed ecosystem and everything has to happen on your platform. I think you’ve got to go where the viewers are, but in my opinion, our platform should be the best place to experience the content.

Let me use Love Island just as an example to build on the point that you’re making. hat was the number one show for the summer. It was a bit of a phenomenon.

It’s a good reminder that must-see TV still exists. Appointment TV still exists even with younger demographics. Love Island was also an interesting show because a very high portion of the audience consumed that on mobile devices.

That might seem obvious, but in a world where you can watch on an 80-inch television, you still have people who are very comfortable consuming that content on mobile-only devices. So what happens? Somebody watched that show, and it was on six days a week.

When the show is over, what we do and what every streaming service does is we say, “Oh, you like this show? You should watch another show. You should watch The Real Housewives .” But that’s not what a lot of these viewers wanted.

What they wanted at the end of the show was to talk about what just happened. So, they leave the streaming platform and go to social media, they’ll look for a podcast, or they’ll even play a game if they could. By the way, the number one app over the summer was the Love Island app.

It was not ChatGPT. It was not Claude. It was the Love Island app for several weeks over the summer.

That speaks to what I’m describing around these fandoms. We are creating this demand, but I would argue we’re not doing a good enough job super-serving them. Then, we are fueling this what I would call “dark matter engagement” on these other platforms.

This is what’s leading us to say, “What if we put the clips on Peacock and we offer it in a vertical video format? What if we create a podcast for Love Island ? What if we create gaming?” But it’s not any game.

These games are derivatives of the fandoms and content that we have on our platform. Can we better super-serve those fans and then grow our share of time? I think that’s the opportunity.

That’s the ambition. It doesn’t mean that we’re not going to work with YouTube, TikTok, Reels, or other platforms. I would argue that the best place for our content, franchises, IP should be on our platforms.

But to do that, you have to expand the aperture of what you deliver as a platform, which is why I think streaming is too limiting. You should really think of it more as an entertainment platform designed to maximize share of time and retention. I think the partnership we announced with YouTube this summer is going to be an example of how we see ourselves continuing to drive more of that audience and engagement across our platform but also working very closely with YouTube.

That YouTube deal looks like the rebundling you’re talking about, right? Peacock will be available to YouTube Premium subscribers. I have YouTube TV.

I imagine that will somehow connect the dots. YouTube is fascinating because it has the user-generated content platform and TV. Those things are starting to compete with each other, right?

I look at the viewership charts, and classic, user-generated YouTube is skyrocketing, just eating up everyone’s time all day long. Everyone has to be there. I’m assuming the economics of YouTube TV look like cable for you.

They have to be far more lucrative. When you go into a room with [YouTube CEO] Neil Mohan and say, “Well, there’s the platform that’s very lucrative and there’s a platform I have to be on,” how do you reconcile the economics of the two? From my point of view, it’s not one or the other.

It’s both. It comes back to what I said about how they’re not exactly the same audiences. There’s some overlap, but somebody who is subscribing to YouTube TV is not necessarily the same person who is subscribing to YouTube Premium or consuming content on main YouTube.

I agree with you that when you look at this through the share of time lens, YouTube has done an unbelievable job creating a platform and business model that allows it to continue to grow. I don’t see anything that would indicate that’s going to slow down. When you look at it from my point of view, so much of our content and IP lives on YouTube in some form, whether it’s SNL or Love Island , whether it’s clips from The Traitors or any of our NBC shows.

But those viewers don’t necessarily subscribe to Peacock. They don’t necessarily watch NBC or Bravo. So, I think that was the opportunity.

That was the unlock. How actually can we transform ourselves to reimagine what it could look like to partner with YouTube? One of the things that I was talking about earlier with this great rebundling — which we talked about and somewhat predicted seven years ago — was that the one thing that held the bundle together in cable television for many years was sports.

What you don’t want to do is a bundle deal without getting the right underlying wholesale economics. What will happen is that you could take a very high ARPU, direct-to-consumer subscriber and end up cannibalizing them for a low, wholesale bundled subscriber. What you’re really looking for is incrementality.

Is this going to drive incremental subscribers, and can I get the right wholesale economics where this is also incremental on the revenue side? What’s interesting about YouTube is that I think it’s a win-win. It’s a win-win because there’s multiple components to this deal.

One aspect is that there’s going to be a bundle launched next year with the ad-supported tier of Peacock and a tier of YouTube Premium. Now, you’re going to get access to all of the benefits of YouTube Premium with the ad-supported version of Peacock. We believe that these are mostly incremental subscribers, or people who do not necessarily have Peacock today.

So, it’s going to grow Peacock while adding more value to YouTube Premium. My prediction is that if you and I have a conversation a year from now, Peacock will be one of the top distributed streaming services in the United States. Do you care that you don’t own your last-mile customer that way?

This was a big reason everyone went to streaming. They were selling their content to Netflix, and they realized Netflix owned the customer. Now we’ve all got to stand up our own streaming services because we want to own the customer and the cable bundle is falling apart.

Do you care now that as you rebundle, YouTube will own the customer in some important way? I think that when you say “own the customer,” really what you’re talking about is, “How do I get the ability to personalize the experience so that I could super-serve an individual both with content and with advertising? What’s ultimately going to create the monetization engine that we need?” I was describing the value of Peacock and the fact that 80 percent of our subs are on the ad platform and that we typically charge premium CPMs (cost per mille) because we have this ability to super-serve our fandoms and franchises, and we have the data to do it.

I think that the relationship with YouTube that we announced this summer is going to allow us to have a much deeper integration with YouTube on the data side as well as the integration with FreeWheel. So, we’re at a point where we’re almost indifferent again about where somebody consumes the content— FreeWheel is your programmatic advertising business. Yes.

That was a critical part to this unlock with YouTube because we can create a bundle that is going to drive incremental subscribers and value. To your point, YouTube TV is the fastest-growing pay TV distributor. I think the pay TV ecosystem has been declining at a 6-7 percent CAGR.

Over the past five years, YouTube TV has grown at a 26-27 percent CAGR. It has over 10 million subscribers and are likely going to be the number one pay TV distributor in the next couple of years. We extended our linear portfolio agreement with YouTube TV, which is going to provide us stability and growth on that part of our portfolio as well.

What we were just describing around having a much deeper integration with the data, analytics, and targeting is going to allow us to monetize our inventory. It’s all of these pieces. We think this is an example of how we’re trying to think differently, or how we’re trying to be innovative and identify strategic partners.

I don’t know if the red company or the blue company would be in a position to do the kind of deal that I’m describing, but it’s precisely because we are independent and looking to be more flexible. I think that actually becomes a calling card for how we could work with other companies in a way that is really transformative. Let me ask you, I think the red company hypothetically got turned upside down because it relied on data too much for the programming and now it’s going to change a bunch of programming executives, so we’ll see where it goes.

The hypothetical blue company led by the hypothetical son of a billionaire is out in the market. It made a big content acquisition. He’s saying, “Oh, we’re going to invest in technology and we’ll compete with Northern California.

We’ll compete with any of the platforms based on our technology bet.” To me, that seems like an old story where I know the ending . Trying to run at TikTok’s technology without the content is just going to get you backwards. If you were running the blue company, how would you think about technology in that way?

Well, I’m going to answer the question based on how I’m running our company. The blue company’s new. Anything could happen with the blue company.

I think my answer, though, would not change depending on where I sat within this industry. I believe that we need to be an open ecosystem, that you’ve got to go where the viewers are. That’s what led us to make a lot of strategic decisions, whether it’s the deal that I just described with YouTube, or the channel deals for the ad-free tier of Peacock with Amazon and Roku.

We’ve done bundling deals. We’ve done a bundle deal with Apple. We’ve done a bundle deal with Walmart.

You’re trying to give consumers choices. Everything I’ve done in my career has always been around the north star of giving consumers choice: what they want, when they want, where they want. That, to me, has been the mantra for how we’re trying to build our company.

All of that being said, I am still also a huge believer in the product, the technology, and the experience. You may be able to watch the Olympics on another platform through NBC or Peacock, but I truly believe the best experience was on Peacock. Are you allowed to say that on other people’s networks?

Can you go on to Amazon channels and say, “This is great, but if you want the first class, get out of this app and open Peacock?” Do they let you say that? Well, I wouldn’t say it that way, though. First of all, I think when somebody subscribes to Peacock, they should be able to access our service regardless of the platform.

In that respect, we do cross-authentication — meaning you can subscribe and watch on Peacock, or you could subscribe and access our service through channels. I’m not here to tell the consumer what the best experience is. I think that we lead by example.

The consumers vote based on where they ultimately decide to engage. If you want to get access to some of these cool features that I’m describing, if you want to play a game that we created, or if you want to listen to a podcast, or… I’ll give you another example. We’re testing our membership program because we shouldn’t think of viewers as subscribers, we should think of them as members.

What are the other values that you can get as part of being a member? Well, maybe some of those values could be based on your tenure or your level of engagement. Maybe you get discounts to NBC merchandise.

Maybe you get special access when you go to Universal theme parks. Maybe you get discounts from some of our advertising partners, like Domino’s. How do we start to add more value?

But maybe that membership is only available when you’re on our platform. I think of it more as needing to give consumers the choice. At the same time, we are investing in product and technology and on experiences that are really meant to be delivered upon the platform that we have created.

We’ve got an unbelievable team, in my opinion, that has created a best-in-class, scalable platform that not only powers Peacock, but also powers Sky’s Now TV. It’s the same platform that we’ve also distributed to dozens of countries around the world. We’ve got a world-class team that is really trying to transform, surprise, and delight viewers in a way that I’m not sure other platforms are going to be able to do around our content and franchises, especially when it comes to especially these major tentpole events.

I want to end by asking maybe the most important question of all. We’re talking a lot about internet-distributed businesses and consumers signing up for services and being able to churn and quit. There are a lot of free market dynamics there, which I think are very powerful and very important.

That means you get to program whatever you want to program. You have chosen live in sports and, importantly, you mentioned news at the top of this conversation. NBC News is part of this portfolio.

NBC News is also distributed over broadcast. It’s distributed over the air. The Trump administration and FCC Chairman Brendan Carr, in particular, has expressed a lot of desire to pressure broadcast networks because you use the public spectrum, particularly news networks.

He’s withheld the broadcast licenses for ABC stations, for example. He has threatened the other broadcast networks. There’s a lot of pressure on NBC News.

How are you handling that? Are you pushing back? Because that is the one place where you’re not allowed to just do whatever you want, right?

The government gets to tell you what to say in an increasingly uncomfortable way. Yeah. Look, I think I give a lot of credit to [NBCUniversal News Group Chairman] Cesar Conde and the NBC News organization who are big believers in freedom of speech and freedom of the press.

I think they’re doing a fantastic job. When it comes to distribution of our content, especially our news programming, I think that’s an example where it’s available everywhere. I mean, we truly make it available not only on Peacock, NBC, and over the air, but through Fast TV, NBC News Now— Have you made this argument to the administration?

Because I’ve met a lot of FCC chairmen over the years, and until Carr showed up, the argument they would make is that we have to get away from overthinking broadcast because the audience is everywhere, and they don’t actually make a distinction between broadcast television and cable. That was a Republican talking point for years and years. This is nonsense.

The other version is that everyone’s on TikTok and the industry has to contend with that in some way. We should get more people internet access because that will actually even the playing field. Now we’ve come to, “You have to use the spectrum in the public interest.” It is different and the government should impose some speech pressure — which again, I think is inappropriate — but that is a new argument.

I’m wondering if you have said to the administration, “Look, the consumer doesn’t make this distinction and we as a company aren’t making this distinction.” Well, I’ve not had those direct conversations myself. Obviously, we have a government affairs team that works very closely with regulators in DC. There’s probably no better time to be alive than right now when it comes to being able to access content through multiple modalities, whether it’s over-the-air broadcast, social media platforms, or free.

If you were to look at Peacock, not only do we distribute NBC News, we distribute all of our own stations as well. I could be watching the Los Angeles local news in New York or I could be watching the Philadelphia local news. There’s no shortage of ways that we are supporting the public good in giving them multiple ways and choices in how they want to consume and access their news programming, and I don’t think that’s going to change.

I think we’re going to continue to advocate for freedom of speech and freedom of the press. I think our news organization has been doing an unbelievable job in the product and the service that they’re doing for the public. Yeah.

Matt, you can tell that’s an important topic for me for a lot of reasons. What’s next for NBCUniversal Media Group? What’s next for Peacock?

What should people be looking for? I think what’s next for NBCUniversal Media Group is, as we talked about, we will likely be a separate company as part of the new NBC this time next year. You’ve got to come back.

There’s a bunch of questions where I knew I wasn’t going to get answers because the deal isn’t closed yet. When that closes, you’ve got to come back because I have a million questions. I will definitely come back.

I’m really looking forward to it. I think the other piece, as you know, is that we had our Q3 earnings last week. We talked a lot about Peacock and how we had a very different strategy with Peacock from the others when we launched our service six years ago.

I’m really proud to share that Peacock was profitable in Q3 for the second consecutive quarter. We had $261 million of EBITDA. That’s $470 million better year-over-year.

I think the team has done an unbelievable job, and I feel really good about our momentum and continuing to grow. It’s good proof that there’s not one way to go to market. There’s not one strategy or approach.

You’ve got to play your hand and to your strengths, and you’re going to see us continue to do that at NBCUniversal. Yeah. We didn’t even talk about what AI might do to the cost structure of video.

When you come back, we’re going to get into it. Matt, thank you so much for being on Decoder . Thank you so much.

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