Report: NBCUniversal Will Seek Primetime TV Rates for Streaming

In what will likely be one of the fiercest haggles in the recent history of TV, Varierty reports NBCU will seek primetime TV rates for ads that run on its Peacock streaming-video service.

NBCU has invested heavily in Peacock, believes it gives advertisers the broad reach they need and has worked to make sure commercials on the service stand out, says Laura Molen, president of advertising sales and partnerships, noting Peacock runs only five minutes of ads per hour and features a host of special commercial formats. “We are committed to building this space for marketers and keeping consumer engagement around their ads,” she tells Variety. “Our pricing is going to reflect this.”

Other media companies are expected to do the same, in a bid to maintain pricing integrity as viewers migrate to new technology that makes delivering the big audiences advertisers demand a more difficult task. The strategy is likely to surface more openly as the industry heads into its annual “upfront” season, when U.S. TV networks try to sell the bulk of their ad inventory for their next cycle of programming.

The media companies have reason to press their sponsors. Ad spending on streaming services that allow commercials is expected to surge, while the growth of ad spending on some of the nation’s best-known TV outlets is seen narrowing. Earlier this month, Steve Tomsic, chief financial officer of Fox Corporation, told investors the company over time expects “the advertising revenue we earn on [streaming outlet] Tubi will exceed the advertising revenue we generate on the [Fox] broadcast entertainment network. Walt Disney Co. said in a filing earlier this month with the U.S. Securities and Exchange Commission that ad sales at Hulu, ABC.com and other direct-to-consumer businesses rose 47% to $882 million last quarter, not far from the $984 million that came to ABC, which notched a gain of 5%.

NBCU and others could face pushback. One media buying executive suggested advertisers are ready to pull money out of top-priced linear TV and deploy it in places that range from broadband and streaming to Spanish-language TV and local television. 

That dynamic, this buyer says, will prod the networks to make pricing concessions to keep volume. “The traditional broadcast demand is going to be down, and I think it’s going to be down a lot more than the sellers are anticipating,” this buyer says.