Why Peacock is making a huge bet on YouTube

There’s been a whole lot of organizational and structural change at NBCUniversal since the last time Matt Strauss joined Decoder. First, Comcast spun most of the cable channels off into something called Versant, and Matt became the chairman of the entire NBCU Media Group. Next year, Comcast is splitting off NBCU into an entirely separate company. That's a lot to have going on all at once — and Matt's the guy who has to make sure broadcast, Peacock, and every other platform keeps making you watch. Read the full interview transcript on The Verge. Links: Comcast plans major layoffs as it preps for NBCU spinoff | Variety YouTube Premium will include Peacock starting next year | The Verge Pipes dream: Why Comcast gave up on NBCU | Decoder Langley, Strauss unveil new executive structures at NBCU | Variety NBCU’s streaming chief isn’t worried about you cancelling cable | Decoder Subscribe to The Verge to access the ad-free version of Decoder! Credits: Decoder is a production of The Verge and part of the Vox Media Podcast Network. Decoder is produced by Greg Ott, Kate Cox, and Nick Statt. The show is editors by Ursa Wright and Xander Adams. Our editorial director is Kevin McShane. The Decoder music is by Breakmaster Cylinder. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  Kate holds the key to every brand asset your business has ever made. She's the only person who knows the difference between teal turquoise and the correct company blue. But she's going on vacation. Luckily, before the company falls into design disarray, you realize you can put Kate into Canva. Save every color font and logo to a brand kit everyone can access. And Kate can vacation happily in the knowledge that no one will ever use Comic Sans. What will you Canva today?

• 0:30Speaker 01

  Support for the show comes from CrowdStrike. It's not a huge stretch to say that AI is the next major computing platform. Every platform shift changes the way we build software, and it changes security, too. CrowdStrike is defining cybersecurity in the AI era with AI Detection and Response, or AIDR, a solution for seeing, monitoring, and securing AI across the enterprise. Learn more about how leading companies are turning to CrowdStrike to secure AI and secure their business at crowdstrike.com/decoder.

• 1:05Speaker 02

  Company spending is complex. Managing it should be simple. Amex Corporate connects cards, expenses, and payments to streamline the way you work. Built to simplify, designed to scale. This is Amex Corporate. Get started at go.amex/ammexcorporate. Terms apply.

• 1:29Nilay Patel?

  Hello and welcome to Decoder. I'm Eli Patel, editor in chief of The Verge, and Decoder is my show about big ideas and other problems. Today, I'm talking to Matt Strauss, who is now chairman of the NBC Universal Media Group. Matt was first on the show about two years ago, and a lot has changed at NBCU since then, including his title. First, Comcast spun off most of the NBCU cable channels into something called Versant, that's CNBC and MSNBC Now, plus some others. That's when Matt's role changed from heading up Peacock, plus some other streaming services, to heading up the whole thing, across all of NBCU's distribution, including broadcast and cable. Now Comcast is in the process of spinning off NBCU entirely, which will be the first time NBC has been independent in essentially forever. That's a lot to have going on all at once. And meanwhile, it's only just this year that Peacock became a profitable business at all,

• 2:14Nilay Patel?

  and it's still pretty far away from being anything like the juggernaut of Netflix. But if you've been paying attention to the entertainment industry recently, you'll know that Netflix is going through it. Its numbers are down, and it's brought in new people to lead content in order to try to recapture the audience. You'll hear Matt say that he's always been betting on this moment, when streamers started to rebundle into something that looked like cable, and audiences turned to live events like sports more often. You're gonna hear him talk about sports a lot, actually. Sports held up the cable industry for years, they held up broadcasts, and now they're the thing that can make streaming a winner for NBC. This conversation was a fun one. I always enjoy talking to Matt, and he's clearly very confident about where NBCU is headed. Two things before we start. One, we used to always disclose that NBCU was an investor in The Verge's parent company, but that's no longer true. That stake now belongs to Versant.

• 2:59Nilay Patel?

  Two, you're gonna 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 Paramount and Warner Brothers. 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.

• 3:32Nilay Patel?

  Matt Strauss, you are the chairman of the NBC Universal Media Group. Welcome back to Decoder.

• 3:37Speaker 04

  Thank you so much, Eli. It's great to be back.

• 3:39Nilay Patel?

  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, you and I are speaking, what, minutes after Anthropic File that's S1, and all of humanity is gonna 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 the last time you were on the show. Last time you were on the show, you were the head of direct-to-consumer, which you were the head of Peacock, basically, and the other apps inside the family. Now you're the chairman of NBC Universal Media Group.

• 4:11Speaker 04

  Yes.

• 4:12Nilay Patel?

  What's the new job? What does that mean?

• 4:14Speaker 04

  Well, so NBC Media Group is really, it's 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. And I think 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 that we had truly worked better together. You know, NBC really has been like a megaphone. It's been incredibly strategic in how we've been able to grow Peacock, just given the reach of NBC, which is a bit ironic, because I think so many people believed that broadcasting

• 4:56Speaker 04

  was a bit of a relic of the past in this digital world, but it's actually proven to be the opposite, that as things have gotten more fragmented, having a broadcast network is actually a superpower, because we're continuing to see ratings growth, and that has been really helpful as we've been building up Peacock. But Peacock actually also was finding new audiences, cord cutters, or people who maybe didn't even grow up watching NBC or some of our cable networks. And so Peacock's also been really strategic in how we've been able to reach and drive people back to NBC and Bravo. And so that flywheel, I think, is where we recognized that we need to start operating differently.

• 5:38Speaker 04

  And I've been a huge advocate of really what I like to call centers of excellence in how I like to structure the business, which is platform first, you know, content first, I'm sorry, platform second. You know, how do we get maximum reach, maximum engagement? And that really required us thinking differently about how we were running the business. And so, you know, we essentially, instead of having a programming group within broadcast and a programming group within streaming, we just collapsed the business. And so now you've got one programming team, one marketing team, one product and technology team, one decision sciences and research team, one, obviously, one advertising team,

• 6:19Speaker 04

  and they're all incentivized around just how do we continue to grow the portfolio, again, get that maximum reach, maximum engagement, continue to drive top-line revenue. And I think that that structure has really, something that we put in place about 18 months ago, I think that is contributing to a lot of the success that we're seeing now. And so like, even if you look at 2026, you know, 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 and the Milan Cortina Olympics and the NBA All-Star Game. You know, in 17 days, we reached over 225 million viewers.

• 7:03Speaker 04

  This summer, you know, 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 Five Star Weekend, which was our number one scripted drama. And now, you know, we led ourselves into the fall, where we've had, you know, Sunday Night Football, which has been the number one show for 15 consecutive years. We had a great kickoff, you know, 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. And so it does feel like we're firing on all cylinders and how we're trying to really

• 7:47Speaker 04

  operate in this, you know, again, in this kind of content first, platform second mantra. But what's also really important, just to kind of go one level deeper, is a big part of this strategy is how do we move audiences across platforms? And so, for example, when I mentioned, you know, that Love Island was the number one streaming show of the summer, you know, 40% of those Love Island viewers also tuned in to watch the World Cup. And so migrating viewers back and forth across the portfolio is a critical part to how we see ourselves continuing to grow. But to do that, to effectuate that, you need to structure yourself in a way where people are incentivized along those, along that vision. And I think that, you know, it's still, you know, we're still kind of evolving as an

• 8:32Speaker 04

  organization, but I'm really proud of some of the milestones and accomplishments that we've made as a team. And I love my job. I feel like I've got the best job in the industry at the moment.

• 8:42Nilay Patel?

  Yeah. It is a tumultuous time in Hollywood, and you seem like one of the happiest people in the industry, right at the second. That's, that is very notable. You're Decoder Pro. You brought up structure. I'm dying to ask you about the Decision Sciences Group. That's the other question to ask everybody. But let me just back out for one second. You're describing quite a lot of freedom in rethinking how something like NBCU would work. And you mentioned the Versant spin, so that's CNBC and MSNBC Now, and a bunch of channels went that way. I'm on their networks all the time. I would describe the folks at Versant as feeling more free, right? They're like, they're disconnected from the battleship that was Comcast and NBCU. They can go try whatever they want to try. They're energized by it in some ways.

• 9:25Nilay Patel?

  Then Comcast looked at NBCU and said, okay, we're going to spin off NBCU as well. And we're going to be the cable business and NBCU will be an 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.

• 9:41Speaker 04

  Uh, yep, I started in 2004 at Comcast.

• 9:44Nilay Patel?

  So just tell me about that process of, all right, we spun off CNBC and MSNBC and Versant. Now we're looking at this company. We ought to spin off NBCU as well. And just tell me about how that came out. What was that moment like? Did you all sit in a boardroom? Did it, did it come down from on high? How did that happen?

• 10:03Speaker 04

  Well, um, you know, that, that decision really was a decision that was made by Brian Roberts and Mike Kavanaugh. And so candidly, I was not in the room uh, when that, when that decision was made. But I think if you were to ask people at NBC Universal, it makes strategic sense.

• 10:20Nilay Patel?

  Do you feel that same sense of freedom?

• 10:22Speaker 04

  I, you know what? I, I think that there's an energy about, you know, people, when they show up here, they feel very passionate about what they do. They believe in our strategy. They believe in our portfolio. You know, when you look at NBC Universal more broadly, like before I was describing the media group, but the media group is one piece of the broader company. You have Universal Film and Television, which has obviously been having an unbelievable summer. You know, with The Odyssey, with uh, Obsession. Um, you've got Universal Theme Parks and Experiences. And you know, we opened up Epic Universe last year. We announced we're going to open up a theme park in the UK. We have Sky, you know, which um, was part of the company, but it was more squarely sat within Comcast Cable.

• 11:06Speaker 04

  And now that's going to migrate over to the new NBC Universal as part of this restructure. And then you have these media assets, which I just, you know, spoke about earlier. And so you've got this unbelievable portfolio. And 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 have more clarity around where we want to make capital allocations and decisions. And you know, there's a few areas that, you know, really play to our strengths as an organization. You know, one of them is about, you know, live sports, live events. I think that that's always been part of NBC Universal that, you know, we're really known for.

• 11:46Speaker 04

  If you just look at the sports portfolio that we have, we've got, you know, NFL, NBA, MLB, Big Ten, Premier League. We've got, you know, the Olympics with the IOC. You know, you've got this unbelievable portfolio of sports content. And you know, that's a strategic asset, you know, 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. And we've demonstrated across almost every single sport that in 2026, we can actually continue to grow ratings, reach new audiences, which again, is something that's becoming more and more complicated.

• 12:24Nilay Patel?

  But can I ask you about that? Cause you also run Peacock, which is obviously a paid streamer and you can access sports on Peacock. When you say grow ratings on broadcast, are more people putting up antennas to watch sports over the air?

• 12:36Speaker 04

  No, what I, what I mean, uh, by the way, there are about 20% of TV households in this country do uh, still use over the air antennas.

• 12:45Nilay Patel?

  Uh, we have lots of listeners are going to tell you that's the best picture quality you can get.

• 12:48Speaker 04

  Yeah, it, and um, it is, it is an amazing picture quality, especially if you live in the right uh, look angle where you could pick up the signal. What, what I mean is it comes back to that, what I said earlier about managing as a portfolio. And so we don't think of it as broadcast sitting next to a streaming business. We really position ourselves as we are a digital first company, trying to get that maximum reach. And so when we look at the ratings, we're combining what you would think of as more of the traditional ratings for linear television with streaming. And all of our digital platforms, you know, whether that's a DVR, whether that's TV everywhere, we aggregated into one platform.

• 13:26Speaker 04

  And so when you look at it through that lens, which is just audience, we've actually demonstrated that across almost every sport, NFL, NBA, MLB, the total viewers that we are reaching now, in some cases are the highest they've been in decades. Even the Super Bowl, which we had earlier this year on NBC, which reached about 137 million viewers at its peak. And that's across, again, all of our platforms. That Super Bowl was the highest rated live event in NBC's 100 year anniversary, which is this year. Which is again, it's kind of counterintuitive. But what we're showing is that when we start operating as one, we can reach new audiences, we can aggregate them.

• 14:11Speaker 04

  And we are demonstrating that not just across sports, even something um, like the Thanksgiving Day Parade. You know, which has been an institution on NBC also for 99 years. This past Thanksgiving Day Parade was the highest rated parade we have had in the company's history. And so there's a renaissance happening around live, which, you know, in a world of instant gratification, on demand, you know, watch what you want, when you want. The fact that you're now seeing this shift of more and more, you know, viewers wanting, you know, that collective consciousness of, of social viewing. You know, things that still matter in today's society, that actually plays to our strengths. And we're seeing that manifest itself in higher ratings.

• 14:55Speaker 04

  But it's also, as I mentioned, a big part of our strategy. It was a big part of Peacock's strategy, uh, which was a bit of an anomaly, you know, when we launched Peacock six years ago. But it's also a huge foundation of what I think NBC does well, which is we create these big tent pole events. And you know, we're able to, you know, shine a light on them and, you know, get huge audiences that are continuing to show up, even in a world of, you know, fragmentation and cord cutting.

• 15:22Nilay Patel?

  It's interesting that you're, you, you've described it as content first, platform second. And then you're describing your approach to ratings as agnostic to distribution, right? You're just sort of combining everything and saying, this is the number of people we reached.

• 15:35Speaker 04

  Yeah, well, like take something like the, the Milan Cortina Olympics. Um, and so this is an interesting example. You know, if you were to look at that, at that Winter Olympics, we had 3,200 hours roughly of content. And there's no way we can make all of that available on one network. There's just, you know, there's just no way to daypart 3,200 hours. And so, you know, this is something that, similar to what we did in the Paris Olympics, if you remember, we made the decision to make every event available live. Now, when you make it all available live, you know, we put it all on Peacock. And this was a very controversial decision because the question is, has always historically been, if people tune in to watch this live during the day on Peacock, are they going to tune in to watch NBC primetime?

• 16:20Speaker 04

  And are we going to cannibalize our ratings or are we going to grow the ratings? And this is where we really tested this strategy, which is, well, if we're truly indifferent, then what, what should happen is that we should be able to expand the funnel during the day, get more people into the Olympics and really try to create an experience that, you know, we're very proud of. You know, we really do believe whether it was the gold zone or whether it was multi-view, 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 in primetime because there's a, a, a difference between what NBC does and what Peacock does. NBC was more about storytelling.

• 17:02Speaker 04

  It was more about, well, what, let's talk about what happened that today, but what about the, the backstory of the athletes? Or how's Mike Tirico, you know, going to kind of, you know, address, you know, his perspective on things? And when you back out and say, okay, well, when you combine these two things together, of putting all the content on Peacock and then having the primetime show, you know, this Winter Olympics, you know, was the, you know, it was about a 96% higher rating. It was about like a 20, 25 million viewers were tuning in to watch the Olympics, Milan Cortina Olympics, which is about 96 to 97% higher than Beijing. On the digital side, it was double the digital minutes of every other Winter Olympics combined. And we also doubled the advertising revenue.

• 17:46Speaker 04

  And so, you know, it's a little bit of, you've got to be willing to, you know, break some glass. And it starts with, and this is, you know, 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. And the only reason I'm using the Olympics as an example is because if you were to look in the past, you know, this was a real pain point where we didn't make everything available on streaming. Or, you know, it was confusing for some viewers to figure out how to navigate all of the choices. And 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.

• 18:31Speaker 04

  And if you can drive that maximum reach and engagement, that's also going to be where you're going to get the best monetization.

• 18:37Nilay Patel?

  The Verge team in particular was addicted to Gold Zone, which was the whip around coverage of every, every medal event. Uh, 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. And I could stretch this all the way back to saying, I know what broadcast TV looks like. Because the medium of broadcast TV has fundamentally shaped the content that gets made there. And 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, okay, 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 to use.

• 19:22Nilay Patel?

  And that's going to increase viewership. But the, 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.

• 19:43Speaker 04

  It is very real. It's a really, it's a really insightful question. Um, so i- i- the tension is real, but actually I don't view it as tension. I actually view it as an opportunity. Because you've got different audiences in some cases, like 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. It's, it, there's some overlap, but it's actually not as much as you would think. And so that actually speaks to this broader strategy, which is, well, how do we reach? If we reach all these different viewers, but they're on different platforms, how do we start kind of bringing this together into one? Now, there's multiple ways to effectuate that kind of a strategy. Like one is you start sharing content and window content differently across platforms.

• 20:28Speaker 04

  So for example, you know, we have a show on Peacock called The Paper. Um, which was, which is Greg Daniels created it, who also created The Office. And it's a really great comedy and it's an original. And if you were to look at how streaming services typically make originals available, they're exclusive. Like you, you, you premiere it on your platform, your streaming platform, and it stays on that platform forever. Typically. Well, what we're starting to experiment with is, well, what if we premiere the paper on Peacock, but then six months later, we then introduce it on to NBC? Now you're bringing a show that was created for streaming, you're making it available on NBC to a new audience, but then you also have this added message, which is if you

• 21:11Speaker 04

  want to watch next week's episode now, go get Peacock. And now all of a sudden NBC is not only reaching new audiences, but it's becoming a sales channel for how we can then drive people back and sign up for Peacock.

• 21:22Nilay Patel?

  Do you give that to Greg Daniels? This is the thing that I, the feedback loop of a YouTuber is so blunt. As I've made like a handful of Instagram reels in my life and 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 like immediate. It's, that's not even how my brain works. And 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, you can go watch the next episode right away on Peacock.

• 21:56Speaker 04

  Yeah. So, um, well, Donna Langley, who oversees all of the entertainment programming, she would be the one calling Greg Daniels and giving, and giving him that feedback. I, but, but here would be maybe a different way to answer that question. Um, I don't think that, you know, we're necessarily, you know, trying to change the, the, the framework of how some of the shows are being created on NBC or on Peacock, because there's still something about premium content and how that's being created that I think resonates with a lot of, a lot of people. But here's what we're thinking differently, which is, um, okay, take a show like SNL, uh, which we, you know, it's, which we had the 50 year anniversary for SNL, uh, a couple of years ago, which is unbelievable what Lorne Michaels

• 22:41Speaker 04

  has created. You still have SNL that's on 1130 PM Eastern Time. 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 because of TikTok or Reels that they're watching on their phone, they're likely holding it vertically, they're likely using their forefinger or their thumb to navigate. You know, they're watching a show like SNL on, on YouTube in some cases as well. 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? And so now you can go to Peacock and you can watch content in a vertical video format.

• 23:23Speaker 04

  That may not be for you, but it might be for somebody else where they want to swipe, you know, sketch to sketch to sketch, because that's how they enjoy it. Or let me take, give you another example, which is sports. You know, I mentioned earlier how, you know, we tried to introduce new features around sports because it's such a passionate fandom and you can't change the way somebody watches, you know, an NBA game. Like if people want to watch an NBA game in the way that it's being produced, but, you know, the lines are getting blurred around what's a live event and what's a video game? You know, especially if you grew up playing, you know, NBA 2K. And so we now introduce something

• 24:03Speaker 04

  called Performance View, which is on Peacock. So you can watch the NBA game, or you can enable Performance View. If you enable Performance View, an overlay comes 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, we're calculating the probability of somebody making a shot, we're using graphical overlays to show the trajectory of the ball, where, you know, we're putting the names over the players' heads, just so it's a little bit easier, so you can kind of follow what's going on. And you're not changing the core production, you're enhancing it. The enhancement of it, you know, whether it's something like Performance View, whether it's something like I'm describing with SNL, whether it's, again, rethinking the windowing

• 24:48Speaker 04

  of the content. I think it's all of these types of, of tactics and features that are allowing us to kind of 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.

• 25:13Speaker 00

  You've been asked to run the company's social channels, but company content plays by its own set of rules. It needs a logo in the first three seconds, but it can't feel like an ad. It needs subtitles, except when it doesn't. It needs to run at two times speed and deliver a complex message, simply, of course, within nine by 16. Thankfully, your company has Canva, so you can easily edit your video and every version of it. What will you Canva today?

• 25:43Speaker 05

  Support for the show comes from Engine. When 1.6 trillion dollars moves through travel every year, it's a shock to remember that most of it still runs on tech from the eighties. I mean, work travel works fine, but it certainly isn't all that intelligent. That's why businesses and travelers book directly through Engine. Engine closes the gap between wanting to be somewhere and actually being there. Developers, expense tools, and AI agents all plug into Engine's API. And as AI spreads, Engine only becomes more valuable. Every AI agent that wants to book travel needs real supply, real pricing, and real payments. That's why Engine was built to go far. With 40,000 businesses relying

• 26:26Speaker 05

  on Engine and growing fast, they're powering travel for the masses with partnerships like Navan and Tampa Bay Buccaneers. Strong hotel partnerships, proprietary supply, real time rate shopping, and payment rails. That's the kind of foundation that takes years to build. Eight years in Engine's case, and it can't be bought. The future of business travel runs on Engine. Visit engine.com/decoder.

• 26:53Speaker 06

  Black Friday is around the corner. Your biggest chance to grow sales this year, don't wait. With Realize, Tubula's advertising platform for businesses, you can reach people engaging with your competitors across premium websites with 600 million daily active users. And as an exclusive offer for podcast listeners, new customers get $700 credit back. Just search Realize Podcast on Google or use the promo code PODCAST26. Ready to get started? Take advantage of this offer while it lasts. Terms apply.

• 27:36Nilay Patel?

  One, one thing I always think about in terms of distribution is every distribution channel, the monetization is more or less lucrative. So I can make a 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 Virg subscription or the Decoder book or whatever it is in the future. And that's the creator economy, right? It's, it's a 10 million little ad agencies and 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 and there's that monetization model. Then there's, I don't know, 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,

• 28:21Nilay Patel?

  but it has to be that some make more money than others and some attract more new audience than others. And you're, you're trying to bring people from the biggest audience to the most revenue.

• 28:32Speaker 04

  Yeah. And so this is really, I want to give a lot of credit to our ad sales team, you know, Mark Marshall, who oversees ad sales, because several years ago, we recognized that, you know, if you really want to have this kind of a strategy and vision, like I said about, you know, content first, platform second, you need to become almost agnostic around where the, the consumption is happening. And so we made the decision that we, we actually sell as one portfolio. And so when you're buying advertising, we are combining the audiences across broadcast, cable, streaming, digital. And that's how we sell it and go to market. And that's actually been the way that we've been doing this now for several

• 29:15Nilay Patel?

  years. Is advertising the number one line of revenue here? Because on cable, when you were part of Comcast, I'm sure the rates were not as high as you, we could get now that you're split, but Comcast just paid you carriage fees.

• 29:27Speaker 04

  Yeah, so we are, we are a dual revenue stream business. Advertising is, is very much a material part of the overall revenue stream, not just of NBC and cable, but of Peacock. And again, if you remember, you know, this was a big part of our strategy when we launched Peacock six years ago, because, you know, the, the, the streaming market specifically was very focused on ad-free binge viewing, scripted dramas, grow subscribers at any cost. You know, that was the future. And we zigged while the rest of the market zagged. We believed the white space was actually going to look more like broadcast television. And so instead of trying to build a standalone streaming business, from the beginning,

• 30:11Speaker 04

  we always saw Peacock as an extension of the broadcast business. And if you look at it through that lens, that has influenced all of our programming decisions around live events and sports, around why we wanted to have movies and scripted, but also unscripted and news, because the belief was that streaming was going to look a lot more like television. And, and, and if the viewership moved to streaming, well, then why wouldn't the advertisers move to streaming? And so 80% 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 that we made six years ago. The platform that we built for Peacock was designed for live.

• 30:56Speaker 04

  And so when you see something like an exclusive NFL playoff game, or the Olympics, or the NBA tip-off, like, you know, the reason why our platform scales and why you're probably not talking about pixelation, or buffering, or, or long latency, or, or, or high app crashes, is because we spent years doing nothing but just wanting to harden the platform, because we believed that we needed to build a platform for scale for live. And so all of this kind of compounded itself, to your question, around whether you're watching something on NBC or Peacock, we sell it as one. And that has allowed us to go to market in a way that really does allow us to, I think,

• 31:40Speaker 04

  punch above our weight when it comes to the advertising and the monetization. And, you know, it's a critical part to our strategy. If you were to, I think about 30% of our advertising revenue came from sports and streaming six years ago. Now it's probably closer to 60% of our, of our advertising revenue is, is coming from streaming and from, and from sports. And so all of that gets aggregated as part of this broader portfolio approach.

• 32:09Nilay Patel?

  Yeah, I'm curious about the, the sports piece of it, in particularly NFL. The NFL just keeps getting more expensive. That, that's the business they're in. They're going to keep charging you more money for rights. All the other sports, I think they 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, right? Where the NFL would say, we're going to cost a lot of money. We're going to go out to broadcast networks. And then the broadcast networks are going to turn around to their distributors and say, well, if you want the NFL games, you got to pay what they cost plus our margin. And then my price all the way at the bottom at the consumer end would go up. My cable bill would go up. And I think everyone understands that that is the thing that happened for years and years and years. That is unbundled, right? You are describing the unbundling of that entire business model.

• 32:53Nilay Patel?

  But the price of NFL rights, for example, keeps going up. And a lot of analysts I talked 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. And NBCU standing alone, outside of the Comcast revenue that would, 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 their own streaming platforms and run them in 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.

• 33:36Nilay Patel?

  How do you manage that without making the price of Peacock skyrocket?

• 33:40Speaker 04

  Well, I, I think that, you know, if you look at our strategy, you know, again, we're, 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, as I mentioned, is we're not looking to just make the content available on streaming or on broadcast. It's, it's both. And that allows us to grow reach, which is a good thing for the leagues. And I think that all that has to be taken into consideration when they're looking at how they want to go to market with their rights. For the NFL, I mean, we've got a very long history with the NFL. You know, they're a, a, a strong partner of ours. You know, Sunday Night Football has been number one on NBC for 15 consecutive years.

• 34:23Speaker 04

  But we also entered into an 11-year arrangement with the NBA. And as I mentioned, I think they've been very happy with the relationship. We've been happy with the first, the first year of the NBA relationship, because it grew, it grew audience for us. It allowed us to kind of manage how we're thinking about, you know, having a weekly cadence of premium sports on Sundays with the NFL, NBA, and now MLB. It's allowed us to grow more advertising. And so when the flywheel works, it allows us to partner with, with the leagues in, I think, creative ways. You know, and so, you know, everything has to be taken into evaluation, you know, when you're, when you're looking at this, whether it's sports or whether it's entertainment programming. But I, I think of it like a mutual fund.

• 35:08Speaker 04

  You know, 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? Sometimes you have content, and the, and the answer to that question could change depending on where you are in the life cycle of your business. And so you might have certain content that's a loss leader, but it's adding value elsewhere in the portfolio. And so that's generally how we're evaluating when we're, when we're, you know, going into a, a rights negotiation. Like, I'll give you another example of this. And so when we were launching Peacock, we, we entered into a relationship with the WWE. And the WWE, we thought, would be a really great addition to Peacock for a few reasons.

• 35:52Speaker 04

  One was I wanted to have something that was on every month. And they've got their premium live events, which they do every month. And so that would create a cadence, which we thought was critical in streaming, which is how do you get somebody to open up your app? How do you build habituation? And so the WWE, we thought, could do that with premium live events. They also had a huge catalog of, of WWE programming, which gave us more tonnage. And we also were able to look at the addressable market for the WWE, estimate what percent we thought we could penetrate. And then we know the CLV of a customer. And so then you can calculate what's the return on the investment when you're going to go after a certain rights package.

• 36:32Nilay Patel?

  So, I'm sorry, what's the CLV for the listener?

• 36:34Speaker 04

  Like, what's the lifetime value? Which you're really looking at, what's the ARPU multiplied by the number of months that, that you retain a customer before they would churn? And so that's generally like the formula that you would look at. And so the, the reason I'm kind of laying it out this way is you're making decisions that are longer term. Like, you're, you're thinking about how does this fit into a broader, a broader portfolio view? And the case of the WWE, it was actually, I think, a real win-win. 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, to sample and experience the WWE.

• 37:15Speaker 04

  But then, when that deal came up for renewal, you know, the, the rates, the, the license fees went up pretty dramatically. And they ended up going to another streaming service. But we were actually okay with that, because what we had really focused on was how do we take those WWE viewers and habituate them? And what we found was WWE fans, they really like Fast and the Furious. They really like Yellowstone. They really like, they like other stuff, right?

• 37:48Nilay Patel?

  I'm sorry, did you need to open the spreadsheet and figure that out? Or did you just intuit that one?

• 37:53Speaker 04

  Well, we, we have assumptions, but you know, you have to test, you have to test these hypotheses. And so the elegance of this strategy for us was that, you know, what you're really calculating is that, okay, well, if I don't renew this content, how many subscribers can I retain? And we were able to retain the majority of those subscribers. And 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. And then we took the money that we were, you know, utilizing to license those, the, the premium live events, and we reallocated it into other parts of the portfolio. And so that's the mindset and how we are approaching these deals.

• 38:37Speaker 04

  And so, you know, if the economics make sense, they make sense. If the economics don't make sense, then, you know, we, we look to then, how do we reallocate that investment into other parts of the portfolio, where we try to find, you know, a, a comparable or better return? And so it's a, it's a, it's an evolving, like, living, breathing strategy and approach in how we go to market when we're looking at any type of content, whether it's sports or entertainment.

• 39:03Nilay Patel?

  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 to 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, the bet on live, you built the 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?

• 39:27Speaker 04

  Well, the Decision Sciences team, it's interesting. When I, when I came to NBC, there was a research department. And the research department, you know, did what I think a lot of media companies, you know, would focus on, which is, you know, they're looking at the ratings, and they're looking at the demographics, and more of a very 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 NBCU, which is more, no, I need to better understand what drives acquisition, what drives engagement, what drives frequency, what are the, what, 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?

• 40:12Speaker 04

  These are very different skills. And so when I talked about early on having centers of excellence, at one point, there were two different groups, one doing research, 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. And so one group might say, hey, this is doing really well, because we grew the audience. And then the other group would say, no, it missed its mark on the paid subscriber additions, and it's not, you know, generating the right return. And so the solution was to bring them together as one team. And it's managed by Will Gonzalez, who has done an unbelievable job.

• 40:56Speaker 04

  And kind of now managing this as one holistic decision sciences and research team. I think when we were building Peacock, you know, maybe we were at a grade school level of sophistication, if I'm, you know, 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, and forecast across multiple different KPIs is just unbelievable. And so when we sit in a green light meeting and Donna Langley really oversees all the green lighting for entertainment, but we partner together across all of these decisions, you know, we are looking at multiple variables, you know, again, whether it's what do we think this

• 41:38Speaker 04

  is going to do from paid subs, from advertising, what's the brand benefit? What do we think? What is the cohort for this content and other content that we think this cohort may watch on the platform? What do we think that this does to the, to the frequency or the habituation? There's multiple KPIs that we're evaluating when we're green lighting a show and, and it also comes back to who are the audiences we're trying to reach. And one of the things that we've been able to really do is to, you know, we're not trying to cast a broad net and be all things to all people. Like we're not a flea market. We're trying to be very purposeful around how do we super serve the fandoms and the

• 42:20Speaker 04

  franchises that we think play to our strengths. And so a lot of the decisioning is around, how do we grow those audiences? And the decision sciences and research team, I wouldn't say that they are the decision maker, but they are providing us the information to make better informed decisions. You know, there's still an art to the science. And so you don't, in my opinion, want to swing the pendulum so far that you're just using data to make predictions. I think that there's a real skill that's, that, that is around, how do you also like, understand the creative process? But then how do we utilize something like decision sciences and research to make better strategic bets? And I think that that's

• 43:03Speaker 04

  something that, you know, we, you're not going to get it right every time. But I think that we've done a pretty good job, in my opinion, in how we've been able to build out our portfolio and predicting where we thought the market was going to go. Like we, we predicted, you know, that we thought the market was going to move towards bundling. You know, I talked about that in 2019, where I said, this great unbundling of cord cutting is likely going to give rise to a great rebundling of streaming. And there was a lot of data that I saw that drove, drew me to that conclusion. And so, you know, when we were building Peacock, I was not building Peacock to win a streaming war. I was building

• 43:45Speaker 04

  Peacock for growth after a streaming war. Where do we see them? Where do we think the market was going to be? And if you look at where we are now, where you've got the market that shifted more towards wholesale bundling, you've got this shift more 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, you know, content, whether it's unscripted content or, or various day parted content. I would argue that a lot of what streaming looks like today is replicating the broadcast network, a broad household demographic where there's something for everyone in the home that is dual revenue stream and that the

• 44:26Speaker 04

  market is moving towards bundling. The more you get, the better the price, which is exactly how the cable industry was built. And so everything old is new again. And I think this is like back to the future, but we designed ourselves in a way betting that we thought that that's where the market would go. But equally important, we believe that that would at least play to our strengths. And that's what would work for us at NBC Universal.

• 44:50Nilay Patel?

  So how do you make decisions? What's your framework?

• 44:53Speaker 04

  Well, my framework is really looking at kind of the hallmarks I mentioned earlier, which is, is this going to, how do we drive reach, engagement and monetization? Those are like some of the, the most critical components. I think that when I project out over the next several years, if there's a streaming war, so to speak, I don't think, I don't think the streaming war is going to be around subscribers or reach. It's going to be about engagement. It's going to be about how do you grow share of time? How do you grow share of time when there's only 24 hours in a day? The average consumer spends five to six hours

• 45:33Speaker 04

  a day consuming media slash 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. And as more people are spending time, whether it's on social media, on user generated content, on gaming, on podcasting, what are the things that we need to do to continue to grow share of time? Because I know the value of one extra hour per user per month. So a lot of my decisioning is around, how do we grow that share of time? Because that's where everything that hangs off of the monetization and the retention and ultimately how I see ourselves continue to grow as a portfolio.

• 46:23Speaker 07

  You're either all in on this model, or maybe you're building with another. You're either speed, or is it security? You're either custom, or are you ready to use? Or you're AWS AI. With hundreds of models, ready to use agents, speed and security built in, you don't have to pick a side. You can have them all. How will AI revolutionize your business? AWS AI is how.

• 46:54Speaker 05

  Support for this show comes from Outshift by Cisco, which is Cisco's incubation engine for frontier technology. Imagine a company where every department can talk, but none can work together. Decisions stall, people spend all day chasing updates, mistakes slip through the cracks. That's the challenge facing multi-agent AI today. The fact is, when AI agents work in isolation, more AI doesn't mean better AI. And if agents can't work together, you're just scaling the confusion. Outshift by Cisco is here to help. Outshift by Cisco knows communication doesn't equal collaboration. And in the age of AI, that difference changes everything. Outshift by Cisco is building the internet of cognition, an open source foundation for building multi-agent systems. Agents share context, memory and

• 47:38Speaker 05

  guardrails to get excellent results from design all the way to production. So instead of simply passing messages, agents can build on each other's work and move towards shared goals. Read the paper, experience the demo and grab the code from outshift.com. That's O U T S H I F T dot com.

• 48:01Speaker 01

  Support for the show comes from CrowdStrike. AI is already fundamentally changing how companies build products and run their businesses. If you listen to the show, you probably already know this. But while AI drives innovation, every new model and agent also creates new cybersecurity vulnerabilities. That's why CrowdStrike built AI Detection and Response, or AIDR. AIDR helps organizations discover where AI is being used, monitors AI activity at runtime, and helps teams detect, investigate, and respond to threats involving AI systems. As companies adopt AI, security has to be built in from the start. More than 70% of

• 48:43Speaker 01

  the Fortune 100 trust CrowdStrike to protect their businesses. Now CrowdStrike is helping secure the AI era. You can learn more about AI Detection and Response at crowdstrike.com/decoder.

• 49:07Nilay Patel?

  So I was looking at our past conversation just before I 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 let's call it a blue company. And you can guess who they are. I can just tell you who they are. But 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, 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. And 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?

• 49:50Speaker 04

  Well, I think the Red Company, in my opinion, is an incredible company. I think they've done an unbelievable job.

• 49:58Nilay Patel?

  This hypothetical company is doing such a good job.

• 50:00Speaker 04

  I have a, well, I think that, I think that every company goes through changes. But I, I don't think that I would lose sight of what they've built. And you've got 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 the Red Company, you know, I think that they are poised for continued growth. And, but that, but that to me doesn't mean that there's a winner take all. Like, it's, it's kind of like broadcast, like when there were, you know, there wasn't one broadcast company. You know, there were four broadcast companies. There wasn't one cable network. There, there are dozens of cable networks. And so I don't think somebody else has to lose for us to win as a company.

• 50:44Speaker 04

  And so let me give you an example of what I mean about how I think of growing share of time. And, and the way I would think of it, you know, Neelai, is don't think of us as a streaming platform. Streaming to me is too limiting. Think of it as an entertainment platform. And, and, and on this entertainment platform, you've got tens of thousands of hours of premium video content. And you can watch what you want, when you want it. And there's also, again, all this great live programming as well. But what we do, in my opinion, with this premium content is partly fueling the share of time that's happening off of my platform. So like, take an example like a show Love Island.

• 51:26Nilay Patel?

  Wait, so is, uh, let me actually ask you about the Love Island. I'm, I'm only interrupting you because we only have a few minutes left. Is it a win for you when the Clippers clip Love Island on the TikTok?

• 51:36Speaker 04

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

• 51:52Nilay Patel?

  Does the Love Island marketing team clip their own show on the TikTok? This is one of my, my beliefs. This happens a lot.

• 51:57Speaker 04

  We do. And so we, we, we make our content available on almost every platform. Because again, you've got to go where the audiences are. You can't, I think, be so, um, I don't know, like, you, you, you can't go in with an 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. And so let me use Love Island just as an example to build on, on the point that you're making. Which is, that was the number one show for the summer. Um, 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.

• 52:41Speaker 04

  You know, Love Island was also an interesting show because a very high portion consumed that on mobile devices, which might seem obvious. But in a world where you can watch on, you know, on a 60, 70, 80 inch television, you know, you still have people who are very comfortable consuming that content on just mobile only devices. And so what happens? Somebody watched that show and it was on six days a week. And then 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. And we try to get you into, you should watch, you know, uh, Real Housewives. But that's not what a lot of these viewers wanted. What they wanted at the end of the show was they wanted to talk about what just happened.

• 53:25Speaker 04

  So they leave the streaming platform and then they go to social media or they'll look for a podcast or they'll even play a game. You know, if you could play a game, the number one app, by the way, over the summer, was the Love Island app. It was not ChatGPT. It was not, it was not Claude. It was the Love Island app for several weeks of the summer that speaks to what I'm describing around these fandoms. And so we are creating this demand. But then I would argue, we're not doing a good enough job superserving them. And then we are fueling this dark matter engagement, that's what I would call it, on these other platforms. And so this is what's leading us to say, okay. Well, what if we put the clips on Peacock and we offer it in a vertical video format?

• 54:10Speaker 04

  What if we create a podcast for Love Island? What if we create gaming? But it's not any game. These are games that are derivatives of the fandoms and the 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 or TikTok or, or, or Reels or other, or other platforms. I would just argue that the opportunity is that the best place for our content, our franchises, our IP, should be on our platforms. But then to do that, you have to expand the aperture of what you deliver

• 54:52Speaker 04

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

• 55:15Nilay Patel?

  That YouTube deal looks like the rebundling you're talking about, right? Peacock will be available to YouTube Premium subscribers. Uh, I have YouTube TV. I imagine that will somehow connect to the dots. YouTube is fascinating because they have the user generated content platform and then they have TV. Those things are starting to compete with each other, right? I look at the viewership charts and classic YouTube, user generated YouTube skyrocketing, just eating up everyone's time all day long. Everyone has to be there. YouTube TV, 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 Neil Moyn, and he can 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?

• 55:57Speaker 04

  From my point of view, it's not one or the other, it's both. You know, and again, it comes back to what I said about they're not exactly the same audiences. Like, there's some overlap, but somebody who's subscribing to YouTube TV is not necessarily the same person who is subscribing to YouTube Premium or, or consuming content on YouTube main. And I agree with you that when you look at this through the lens of share of time. I mean, YouTube has done an unbelievable job creating a platform and a business model that is allowing them to continue to, to grow. And I don't see anything that would indicate that that's going to slow down. And so when you look at it from my point of view,

• 56:39Speaker 04

  so much of our content and IP lives on YouTube in some form. You know, whether it's SNL or whether it's Love Island or whether it's clips from The Traitors or, or any, or any of our NBC shows. But those viewers don't necessarily subscribe to Peacock. They don't necessarily watch NBC or Bravo. And so I think that was the opportunity. That was the unlock. Which is, how actually can we transform ourselves in a way to reimagine what it could look like to partner with YouTube? And, you know, I, I would say that one of the things when I was talking earlier about this great rebundling,

• 57:19Speaker 04

  which we, which, you know, we talked about and, and somewhat predicted, you know, seven years ago, was that the one thing that held the bundle together in cable television, in my opinion, for many years was sports. And what you don't want to do is you don't want to do a bundle deal without getting the right underlying wholesale economics. Because what will happen is you could take a very high ARPU direct to consumer subscriber and end up cannibalizing them for a low wholesale bundled subscriber. And so 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 incremental also on the revenue side?

• 58:04Speaker 04

  I think 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 of it, you know, there's going to be a bundle that we're going to launch next year with the ad-supported tier of Peacock with the, with, with a tier of YouTube Premium. And 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, people who do not necessarily have Peacock today. And so it's going to grow Peacock while it's going to add more value to YouTube Premium. My prediction is if you and I have a conversation a year from now,

• 58:44Speaker 04

  that Peacock will be one of the top distributed streaming services in the United States.

• 58:50Nilay Patel?

  Do you care that you don't own your last mile customer that way? This was a big reason everyone went to streaming is they were selling their content to Netflix and they realized Netflix owned the customer. And we all got to stand up our own streaming, uh, 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?

• 59:10Speaker 04

  I think that, um, I think that you, when you say own the customer, really what you're talking about is how do I have the ability to personalize the experience in a way that I could super serve an individual, both with content and with advertising, and that's ultimately going to create the monetization engine that we need. I think when I was describing, you know, the value of Peacock and the fact that 80% of our subs are on the ad platform, and we typically charge premium CPMs, is because we have this ability to super serve our fandoms and franchises, and we have the data to do it. I think that our relationship with YouTube that we announced this summer

• 59:55Speaker 04

  is going to allow us to have a much deeper integration with YouTube on the data side, as well as the integration with Freewheel. And so we're at a point where we're almost indifferent again about where does somebody consume the content.

• 1:00:09Nilay Patel?

  Freewheel, by the way, is your programmatic advertising business.

• 1:00:11Speaker 04

  Yes. And so that was a critical part to this unlock with YouTube, because we can create a bundle which is going to drive incremental subscribers and value. To your point, YouTube TV is the fastest growing pay TV distributor. I think, I think the pay TV ecosystem has been declining at like a 6% to 7% CAGR. YouTube TV over the past five years has grown at like a 26% to 27% CAGR. You know, they've got 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.

• 1:00:55Speaker 04

  And then what we were just describing around having a much deeper integration on the data, on the analytics and on the targeting, is going to allow us to monetize our inventory. And so it's all of these pieces where, you know, we think this is an example of, you know, how we're trying to think differently, how we're trying to be innovative, like 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, you know, that I'm describing. But I think it's precisely because we are independent and looking to be more flexible. I think that that actually becomes a calling card for how we can work with other companies in a way that is really transformative.

• 1:01:36Nilay Patel?

  Let me ask you, I think the red company got hypothetically got turned upside down because they relied on data too much for their programming. And now they're going to change a bunch of programming executives and we'll see where they go. Blue company, hypothetical blue company led by the hypothetical son of a billionaire is out in the market. They've made a big content acquisition. And he's saying, oh, we're going to invest in technology and we'll compete with Northern California and we'll compete with any of the platforms based on our technology bet. That to me seems like an old story and like a story where I know the ending, which is trying to run it TikTok's technology without the content is just going to get you backwards. How would you, if you were running the blue company, how would you think about technology in that way?

• 1:02:19Speaker 04

  Well, let me, I'm going to answer the question based on how I'm running our company.

• 1:02:25Nilay Patel?

  No, no, why not? But the blue company is new. Anything could happen with the blue company.

• 1:02:28Speaker 04

  Well, I, well, I think my answer though is it would not change depending on where I sat within, within this industry. Which is, you know, I believe that we need to be an open ecosystem. You know, that you've got to go where the viewers are. And that's what led us to do a lot of strategic decisions. You know, whether it's the deal that I just described with YouTube. We've done channel deals for the ad free tier of Peacock with Amazon and with Roku. We've done bundling deals. We've done a bundle deal with Apple. We've done a bundle deal with Walmart. You know, you're trying to give consumers choice. And everything I've done in my career has always been around a North Star

• 1:03:10Speaker 04

  of give, you know, consumers choice, what they want, when they want, where they want. And that to me has been the mantra in how we're trying to build our company. Now, all of that being said, I still also am a huge believer in the product and the technology and the experience. When I talked earlier about the Olympics, you may be able to watch the Olympics on another platform through NBC or through Peacock, but I truly believe the best experience was on Peacock.

• 1:03:36Nilay Patel?

  Are you allowed to say that on other people's networks? Can you, can you go on to, on the Amazon channels and say, if you, this is great. But if you want the first, like get out of this app and open Peacock. Do they let you say that?

• 1:03:47Speaker 04

  Well, I wouldn't say it that way though. What I, what I would do is first of all, I'm, I think too, when somebody subscribes to Peacock, they should be able to access our service regardless of the platform. And so in that respect, we do cross authentication. Meaning you could, you know that. And so you can, you know, you can subscribe and watch on Peacock or you can 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, you know, example. Like I think that the, the consumers vote based on where they ultimately decide to engage. And so, you know, if you want to, you know, get access to some of these cool features that I'm describing, or if you want to play a game that we created,

• 1:04:32Speaker 04

  or if you want to listen to a podcast, or I'll give you another example, which is we're testing out a membership program. Because we shouldn't think of, of viewers as subscribers. We should think of them as members, right? And so 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, you know, special access when you go to Universal theme parks. You know, maybe you get discounts from some of our advertising partners like Domino's. And so how do we start to add more value? But maybe that membership is only available when you're on our platform.

• 1:05:14Speaker 04

  And so I think of it more as give consumers the choice, but at the same time, we are investing in product and technology and on experiences that are really meant to be delivered upon the, the, the platform that, that we have created. And we've got an unbelievable team, in my opinion, that has created a best in class, scalable platform that not only powers Peacock, but it's the same platform that we also use to power Sky's Now Television. It's the same platform that we've also distributed in dozens of countries around the world. And we've got a world-class team that I think is really, when it comes to the, especially these major 10 pull events,

• 1:05:55Speaker 04

  is really trying to transform and 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 our franchises.

• 1:06:05Nilay Patel?

  I want to end by, by asking maybe the most important question of all. We, we're talking a lot about internet distributed businesses and consumers signing up for services and being able to churn and quit. And there's a lot of free market dynamics there, which I think are very powerful and very important. And that means you get to program whatever you want to program. And you have chosen live and sports. And importantly, you mentioned news at the top of this conversation. That NBC News is part of this portfolio. NBC News is also distributed over broadcast. It's distributed over the air. And the Trump administration in particular, SEC Chairman Brendan Carr, has expressed a lot of desire to pressure broadcast networks because you use the public spectrum and in particular news networks. And he's, you know, he's withheld the broadcast licenses for ABC stations, for example.

• 1:06:50Nilay Patel?

  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, the government gets to tell you what to say in an increasingly uncomfortable way.

• 1:07:06Speaker 04

  Yeah, well, look, I think I give a lot of credit to Cesar Conde and the news organization, NBC News organization, you know, who are big believers in freedom of speech, freedom of the press. I think when it comes to, and I think they're doing a fantastic job. I think when it comes to distribution of our content, especially our news programming, you know, I think that's an example where it's available everywhere. I mean, we truly make it available not only on Peacock and NBC and over the air, but through fast, you know, NBC News Now.

• 1:07:40Nilay Patel?

  Have you made this argument to the administration? Because I've met a lot of FCC chairman over the years. And what, until Brendan Carr showed up, the argument they would make is 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 and years. This, this is nonsense. The other version of that is everyone's on TikTok and we have to, the industry has to contend with that in some way. And we should get more people internet access because that will actually even the playing field. Now we've come to, well, you have to use the spectrum in the public interest. And it is, it is different and the government should impose some speech pressure, which I, again, I think is inappropriate.

• 1:08:24Nilay Patel?

  But that is the new argument. And 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.

• 1:08:34Speaker 04

  You know, I've not had those direct conversations myself. Obviously, we have a, a, a government affairs team that works very closely with regulators in DC. But I think what you're saying around, you know, if you were, there's probably no better time to be alive than right now when it comes to being able to access content through multiple modalities. You know, whether it's over the air broadcast, whether it's on social media platforms, whether it's free. If you were to look at Peacock, not only do we distribute NBC News, we distribute all of our own stations as well on Peacock, where I could be watching in New York, the LA news, local news, or I could be watching the Philadelphia local news.

• 1:09:17Speaker 04

  There's no shortage of ways that we are really, I think, 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 that's going to change. I think we're going to continue to advocate for freedom of speech, freedom of the press. And I think our news organization has been doing an unbelievable job in the product and the service that they're doing for the public.

• 1:09:41Nilay Patel?

  Matt, to me, that is for a lot of reasons. You can tell that's an important topic for me. What's next for NBC Media Group? What's next for Peacock? What should people be looking for?

• 1:09:51Speaker 04

  Well, I think what's next for NBC Media Group, as we talked about, is we're gonna, you know, this time next year, we're likely going to be a separate company as part of the new NBC.

• 1:10:00Nilay Patel?

  You gotta come back. There's a bunch of questions where I knew I wasn't getting answers because the deal isn't closed yet. When that closes, you gotta come back because I have a million questions.

• 1:10:08Speaker 04

  I will, I will definitely come back. I'm really looking forward to it. I mean, I think the other piece, as you know, is we had our Q3 earnings last week. You know, 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. But I'm really proud to share that Peacock was profitable in Q3 for the second consecutive quarter. You know, we had $261 million of EBITDA. You know, 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. And it's kind of good proof that there's not one way to go to market.

• 1:10:49Speaker 04

  There's not one strategy or approach. You gotta play your hand and do your strengths and you're going to see us continue to do that at NBC Universal.

• 1:10:56Nilay Patel?

  There's something very, we didn't even talk about what AI might do to the cost structure of video. When you come back, we're gonna get into it. Matt, thank you so much for being on Decoder.

• 1:11:05Speaker 04

  Thank you so much.

• 1:11:07Nilay Patel?

  Thank you for listening to Decoder. To get new episodes every Monday and Thursday, subscribe to our YouTube channel at DecoderPod and find us on TikTok and Instagram under at DecoderPod for more fun stuff we put out almost every day. If you enjoyed this episode, please send a link to it to someone you think you might like it. It really helps us grow the show. You can also subscribe wherever you get your podcasts. Decoder is production of The Verge and part of the Boxing Podcast Network. The show's producers are Greg Ott, Kate Cox, Nick Statt. This episode was edited by Xander Adams. Our editorial director is Kevin McShane. The Decoder music is by Breakmaster Cylinder. We'll see you next time.

• 1:11:40Speaker 00

  Kate holds the key to every brand asset your business has ever made. She's the only person who knows the difference between teal, turquoise, and the correct company blue. But she's going on vacation. Luckily, before the company falls into design disarray, you realize you can put Kate into Canva. Save every color, font, and logo to a brand kit everyone can access. And Kate can vacation happily in the knowledge that no one will ever use Comic Sans. What will you canva today?

• 1:12:11Speaker 06

  Support for today's episode comes from Delta, official airline of the National Women's Soccer League. Traveling is basically magic. It creates opportunities, it fosters understanding, it expands horizons, it connects people and communities to each other and to their own potential. Those are the values that drive Delta. With up to 5,500 daily Delta and Delta Connection flights to more than 300 destinations on six continents, Delta is committed to helping you explore your world. Whatever gives you the travel bug, Delta is here to help you get there. Visit delta.com for more info. Delta, wherever the journey takes you.

• 1:12:56Speaker 00

  As wish lists grow, you know where to go. Head to Ulta Beauty. We have gifts they'll love from brands like Tato One and Rare Beauty by Selena Gomez. Shop beauty faves to give or keep from Shark Beauty, Sol de Janeiro, and more. Not sure what they want? You can't go wrong with Balmain, Clinique, or Redken. And don't forget to put yourself on the list. Book a salon moment or add a little more sparkle to your season. Shop holiday in store or at Ulta.com. Ulta Beauty, the