The Philadelphia Inquirer reports that unlike many of its rivals, Comcast will offer free and cheaper streaming products supported by advertisements. During an investor presentation Thursday, held in Studio 8H of 30 Rock featuring Tina Fey, Jimmy Fallon, and Seth Meyers, the company said it will make a limited version of Peacock free to anyone, while a premium version will cost $4.99 a month. In addition, the Philadelphia company is bundling Peacock Premium to 24 million Comcast and Cox customers for free. Consumers can pay an extra $5 to watch Peacock without ads.
Comcast Xfinity customers will get early access to Peacock on April 15, with the service set to launch nationwide July 15.
Comcast said it expects to reach about 35 million active accounts by 2024. By then, the company estimates Peacock to generate $2.5 billion in revenue.
By making Peacock free for cable customers, Comcast could quickly add tens of millions of users to the service while convincing cord-cutters to stick with Xfinity by bundling broadband with content. The cable and media giant has been losing hundreds of thousands of TV customers quarter after quarter.
“We have one of the most enviable collections of media brands and the strongest ad sales track record in the business,” Steve Burke, chairman of NBCUniversal, said in a statement. “Capitalizing on these key strengths, we are taking a unique approach to streaming that brings value to customers, advertisers and shareholders.”
Comcast enters the streaming wars with a somewhat limited content arsenal. The company boasts of 15,000 hours of movies and shows from the NBCUniversal library on the premium Peacock, from the Friday Night Lights TV series to the Fast & Furious film franchise. Peacock will also carry new originals, including Battlestar Galactica and Saved by the Bell reboots. And it will feature live news, sports, and access to The Tonight Show Starring Jimmy Fallon and Late Night with Seth Meyers hours before they air on TV.
By comparison, rival Disney has Star Wars and Marvel superheroes at its disposal, while AT&T will combine premium HBO shows with Warner Bros. content such as Friends, one of the biggest streaming hits of all time, when it launches HBO Max in May.
Peacock Premium’s ad-supported tier is cheaper than Netflix ($12.99 for high definition) and Amazon Prime Video ($8.99), neither of which sells ads. Hulu charges $5.99 for its ad-supported service and $11.99 for ad-free streaming.
Newer entrants charge or will bill anywhere from $4.99 a month (Apple TV+) to $14.99 (HBO Max) for their libraries of on-demand movies and shows. Disney+ costs customers $6.99. None of them shows ads.
Peacock will run about five minutes worth of ads per hour of video, Comcast executives said. The company expects to earn roughly $5 a month from each user from ads, using improved data collection and targeting capabilities. In unveiling Peacock on Thursday, NBC announced that the streaming service will launch with State Farm and Target, among others, as initial sponsors, bringing in hundreds of millions of advertising revenue.
Connected TV ad spending is expected to double to $14 billion by 2023, from nearly $7 billion last year, according to the market research firm eMarketer. That’s still a fraction of the $70 billion spent on traditional TV advertising in 2019. But the TV ad pie has been steadily shrinking. It’s expected to drop to more than $68 billion in 2023. Meanwhile, digital ad spending should grow from $34 billion last year to $59 billion in 2023, eMarketer predicts
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