How Comcast Can Use Universal Pictures to Pump Up Peacock

How Comcast Can Use Universal Pictures
Cheyne Gateley/VIP

When the horror-comedy film “Freaky” debuts in theaters this Friday, it will be the first of a notable string of experiments in release strategy from Universal Pictures, which already made a bold move in April by bypassing theaters entirely for “Trolls World Tour.”

Both are smart risks, but parent company Comcast should also consider something even bolder.

While most competing studios have slowly retreated from the U.S. theaters that have managed to stay open amid a pandemic that doesn’t seem to be close to lifting, Universal has done the opposite. From Halloween through February 2021, the studio will have released 10 films attempting to find viewers via a new hybrid release window resulting from an unprecedented deal the studio struck with AMC Theaters in July. That pact shrunk the window of exclusivity AMC had on Universal movies from the traditional 75-to-90-day window to just 17 days.

So when “Freaky,” for instance, hits the 17-day mark, the movie will remain in theaters but Universal also has the option to begin offering it to stream for as much as $19.99 per home. While you’re not going to see the biggest blockbusters on Universal’s roster, like “F9” or “Minions: The Rise of Gru,” anytime soon as they hide from the pandemic well into the 2021 calendar, the pending releases aren’t entirely negligible titles. “The Croods: A New Age,” the sequel to the kid-friendly animated franchise, comes later this month, followed on Christmas Day by what may be Universal’s best bid for Oscar glory ⁠— the Tom Hanks vehicle “News of the World.”

Universal’s Focus Features arm has already begun to deploy the hybrid release model over the past two weeks with a pair of titles, “Come Play” and “Let Him Go,” that scored No. 1 openings at the box office. Of course, that’s a fairly modest achievement when these movies face virtually no competition and a release that nets $5 million domestically over an opening weekend is deemed successful.

Still, the hybrid release model makes sense for Universal. From a distribution perspective, the downstream revenue opportunity in home entertainment and the Pay 1 window is a safe bet.  From a marketing perspective, it means a studio can consolidate what was otherwise two separate marketing campaigns for theaters and home entertainment. In addition, its deal with AMC helps give a pulse to a struggling exhibition business that might otherwise face extinction.

Not that Universal is acting out of pure selflessness here: The more theaters it can save, the better blockbusters like “F9” can do in the U.S. once the cloud COVID-19 has cast over the exhibition business dissipates.

Moreover, if successful, Universal could very well end up trailblazing the path forward for the U.S. business away from an antiquated windowing scheme. That’s going to take time and experimentation to figure out because there are a lot of different ways this release strategy could work and it’s highly unlikely there will be a one-size-fits-all solution for movies of different genres. It’s also worth noting that Universal can opt to take one of its titles direct later than the 17-day mark or even not at all. It’s a choice they have the flexibility to make beyond the first two weekends, when movies typically make the majority of their money.

But does Universal really need so many different movies to test out the viability of the hybrid release model? Surely it can spare a few of those to put on its corporate sibling, Peacock and see how they move the needle for a streaming service that can really use the help.

Compared with other streaming services, Peacock clearly needs more buzzy original programming that can help the service gain market traction in the crucial early going when it’s trying to find its legs. Comcast should steal a page from Disney’s playbook for Disney+, which has benefited greatly from that company’s willingness to grant it high-profile titles like “Hamilton” and Pixar’s upcoming “Soul.”

Here’s what passes for original movies on Peacock: “Psych 2: Lassie Come Home,” a sequel of sorts to a not-quite-landmark USA Network series.

As I’ve written before, the problem with PVOD is that movies of equal quality are rolling out at the same time on streaming platforms as part of the same monthly fee instead of as a separate transaction. Charging $20 for, say, “Croods” at the same time Disney+ subscribers aren’t required to pay extra for “Soul” means the “Croods” value proposition suffers by comparison.

In its quarterly earnings report last month, Comcast touted 22 million signups for Peacock, which sounds like a nice number for a streaming service that fully launched in July but isn’t even a true subscriber count like what Disney+ or Netflix offer. If Comcast wants to take Peacock to the next level, Universal needs to be leveraged.