NBCU's Peacock to Stream Free Tier, 2 Premium Tiers

Peacock, the new streaming service from Comcast-owned NBCUniversal, will launch with Comcast X1 and Flex customers on April 15 and then nationally on July 15. Peacock will feature two paid subscription tiers along with a free, ad-based version of the service.

With more than 15,000 hours of content, the ad-supported premium subscription Peacock tier will sell for $4.99 per month. For $9.99 per month, you can get an ad-free version. Those tiers will include access to live sports, content in 4K and High Dynamic Range (HDR), and early access to NBC's evening franchise shows. For example, Peacock premium subs will get to see The Tonight Show Starring Jimmy Fallon at 8:00 p.m. ET each weeknight vs. its regular TV airing time of 11:35 p.m. ET.

NBCU's Steve Burke said Peacock will enable the programmer to better monetize TV series and other shows that are streamed and fall outside  traditional TV distribution.
NBCU's Steve Burke said Peacock will enable the programmer to better monetize TV series and other shows that are streamed and fall outside traditional TV distribution.

The completely ad-fueled version of the service, called Peacock Free, will offer 7,500 hours of content, including next-day streams from current seasons of NBC shows and a mix of curated libraries such as "Family Movie Night" and "SNL Vault."

Pay-TV connections
While Peacock will be available as a standalone streaming service, the new offering will also take advantage of NBCU's pay-TV distribution partnerships. Early on, Comcast's pay-TV customers and broadband-only Flex customers will get the premium, ad-supported version of Peacock Premium for no added cost, and $5 per month for the ad-free tier. That same deal will be offered to Cox Communications' pay-TV subs on Cox's new Contour platform (based on an X1 syndication deal with Comcast).

Comcast also has plans to offer Peacock to pay-TV subs at UK-based Sky, which Comcast acquired in the fall of 2018. Sky's Now TV technology will power the Peacock platform.

Speaking at an investor event held at NBCU's 30 Rock headquarters in New York, NBCU chairman Steve Burke, who is retiring later this year, said the multi-faceted approach with Peacock would help the programmer better monetize its content across not just linear TV, but also streaming.

"The challenge is this massive audience is not well monetized," Burke said. "We're leaving money on the table."

Peacock, Burke added, is being built to be the "equivalent of a 21st-century broadcast business delivered on the Internet."

Matt Strauss, chairman of Peacock and NBCUniversal Digital Enterprises, said the new streaming service aims to eliminate three pain points -- programming fragmentation, endless scrolling and subscription fatigue.

On the programming end, Peacock will deliver both live and on-demand content in categories such as movies, kids, drama and comedy, which represents about half of TV viewing, but also reality shows, sports, news, and late-night shows. Peacock will also take a page from Spotify by creating dozens of dedicated, personalized digital "channels," Strauss said.

Peacock aims to help subscription fatigue with its free, ad-based offering, he said, noting that the service's ad-supported tiers will carry an ad-load of about five minutes per hour, versus up to 20 minutes for a traditional TV show.

Noting that 600 engineers are working on Peacock, Strauss said Peacock would be offered on mobile, web, smart TV platforms and "major" connected TV devices, alongside the "deep integration" on Comcast X1 and Flex boxes with voice navigation capabilities.

Matt Strauss demonstrated the Peacock app for Comcast's Xfinity Flex streaming service for broadband-only customers.
Matt Strauss demonstrated the Peacock app for Comcast's Xfinity Flex streaming service for broadband-only customers.

The app itself will spool up a live TV feed when it's opened, "just like TV," and present a home page with three primary selections -- channels, trending and browse -- Strauss said.

In between the corporate messaging, Jimmy Fallon injected some humor into NBCU's investor presentation:

Joining the streaming crowd
Peacock is entering the streaming fray alongside a recent wave of other OTT-delivered subscription services launched or on the way from other major studios, programmers, and media companies. That set of competitors includes Disney (Disney+), Apple (Apple TV+), WarnerMedia (HBO Max) and Quibi, a service that will focus on premium-level short-form entertainment and news content.

They are all joining a crowded market of general entertainment subscription services that also includes Netflix, Hulu and Amazon Prime will be fighting over wallet share. Though so-called "subscription fatigue" is a challenge faced by all, the good news is that consumers have been tacking on more and more SVoD services.

According to TiVo's latest "Video Trends Report," the average number of SVoD services taken per respondent in 2019 was 6.9, well up from the four that the survey found three years prior. TiVo, which based its Q4 2019 study on responses from 6,145 adults in the US and Canada, also found that OTT viewing has almost closed the gap on live TV.

(Source: TiVo, 'Video Trends Report 2019')
(Source: TiVo, "Video Trends Report 2019")

FreeWheel, the Comcast-owned online ad-tech company, also got into the action today with a new study of its own focused on how advertising and ad addressability (targeting) is altering the TV landscape. It found that the "optimism scores" (the percentage increase in spending minus percentage decrease) for ad spending via OTT and connected TV platforms rose to 59 in 2019, versus 37 in 2018. Linear TV, meanwhile, saw its optimism score drop to (-8) in 2019, compared to an already low score of 5 in 2018.

Though Peacock intends to use advertising to achieve profitability faster than via a subscription-only model, it won't be cheap to get off the ground. Comcast CTO and EVP Mike Cavanagh noted late last year that the company would spend about $2 billion in the first two years for Peacock to be profitable by year five.

Update: To expand on that business plan, Strauss said Peacock forecasts having 30 million to 35 million domestic accounts by the end of 2024 and break even. At that time, Peacock also expects to drive $6 to $7 of monthly ARPU and bring in annual revenues of $2.5 billion.

Strauss noted that the Peacock will be driven by a set of revenue inputs -- active accounts (customers that stream Peacock each month), engagement (hours of content watched per account) and the revenue per user.

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— Jeff Baumgartner, Senior Editor, Light Reading

AndrewD 1/17/2020 | 3:05:41 PM
Re: Canadian plans for Peacock? Thanks Jeff. I think the challenge for Peacock (and CBS All Access) is that it's harder to stand out for households that still have traditional TV. Netflix, Prime Video and Disney+ can easily show that they have unique content that you can't get anywhere else. But that's not as easy for Peacock and CBS All Access in homes that have one or more NBC and CBS stations through their traditional TV feed (or free over OTA).
Jeff Baumgartner 1/17/2020 | 12:13:19 PM
Re: More Peacock Yep, that is going to be a major pain point of all of this...dealing with the fragmentation of services and shows and series people want to watch. While some of the pay-TV guys want to become super-aggregators that can bring all of that together, that fits into a bundled world that some like and others don't. And other people want to put together their own bundles and put in the work that you don't care to.  Then TiVo is trying to be an aggregator too but it's still a bit different and doesn't cover all the bases.  None of this is perfect, for sure. 

But when it's summed up I agree that this will eventually evolve into something that once again looks like the pay-TV bundle but with these new streaming servcies as the studios try to claw things back and try to make a go of it. But all the direct-to-consumer stuff will be there for people who want to go that route, though they'll likely pay more when all is said and done. 

Edit: one thing i'd add is that I think we'll see a sizable number of cable channels go away...probably not a bad thing. 

Enjoy your muttering and swearing! JB 

Mitch Wagner 1/17/2020 | 11:13:17 AM
Re: More Peacock Time is also a cost. Figuring out which OTT option based on pricing and overall programming lineup to buy takes time, which consumers don't want to spend. 

Consumers will do what they've always done with cable: Look at available programs and decide what to buy based on what they want to watch, cost, and availability. Like Star Wars? You better get Disney+. Star Trek? The CBS option is for you. Amazon Prime, Hulu and Netflix are aggregators, with deep back catalogs and some recent programming, though it's unclear how long that will last -- and those guys have original programming too ("The Crown," "Expanse," etc.) 

Also, Disney+ is the family-friendly brand. Apple is a little more adult, but still nothing you'll freak out about if you walk in on the 6-year-old with it on. 

Arguably the streaming landscape is evolving to replicate cable, with all its broad diversity of options and confusion for consumers. Streaming is availabe on-demand without having to buy an expensive DVR -- which is a plus -- but the user interface is different on every brand, which leaves the consumer muttering to him or herself and swearing when all they want to do is toggle the $&^#*R#@ captioning on and off to read what that guy said.
Jeff Baumgartner 1/17/2020 | 10:14:15 AM
Re: More Peacock Yes, it's unclear how this will resonate and if NBCU will hit its finanical and subscriber targets, but Peacock will have some built in audience with the initial pay-TV tie-ins, which will give the ad side of its business some scale out of the gate. 

And while I understand there's skepticism, the genie's out of the bottle -- all the major studios and programmers are pushing ahead with streaming products that are either standalone OTT or will be availalbe through the usual suspects of pay-TV distributors. There's really no turning back now that I can see. 

I think what will happen is the migration away from the old pay-TV model that's been about bulked up by channel lineups with channels  that people don't want or don't watch to slimmed down channel lineups of those traditional cable and local broadcast channels paired with niche digital/streaming channels that don't cost much to carry along with these various SVoDs.. 

This will leave options for consumers to do their own bundling if they choose to and provide a path for a rebundling of the pay-TV universe. But I also don't believe that these new schemes will necessarily make things less expensive for consumers. The cost to produce and license premium content is what it is.  JB 
Jeff Baumgartner 1/17/2020 | 10:04:58 AM
Re: Canadian plans for Peacock? Hi Andrew -

Thanks for reading. So, they did not announce any specific plans to offer Peacock in Canada either as a standalone OTT or through pay-TV partnerships. My guess is that, from a pay-TV bundling perspective, Rogers, Videotron and Shaw are probable candidates in Canada given they are all X1 syndication partners and are likely in line to offer a Flex-like streaming product for broadband-only customers as well. 

But I'd also guess that launches of Peacock as a standalone OTT or with pay-TV partners in Canada and in other regions is complicated by digital rights NBCU posesses in those areas and what existing distribution relationships they have already in countries such as Canada for digital access to NBCU shows and movies. So I think it's just a matter of time, but I don't know how much time it will take. In the meantime, I'd expect Comcast-owned Sky to be the first international service provider to get Peacock. JB 
jamestinker 1/17/2020 | 2:18:46 AM
NBC NBC Universal played up its tactics for live sports, mainly the Summer Olympics, which begin in Tokyo on July 24 and will feature together abundant live attention of events and behind-the-scenes action of athletes. I am a professional academic writer with over twelve years of providing assignment services experience in the United Kingdom.
Mitch Wagner 1/16/2020 | 8:44:53 PM
Re: More Peacock I'm skeptical about most of these OTT services, even the ones backed by big names like NBCU. Perhaps especially those -- big companies don't innovate well. 

And yet this one just might work. It's convenient, it's got shows people like, it's relatively inexpensive, so I can see consumers saying, "Sure, why not?" 
AndrewD 1/16/2020 | 7:37:31 PM
Canadian plans for Peacock? Hi Jeff - Great article, as always! Are there any Canadian plans for Peacock? Will it also launch with Comcast's Canadian X1 syndication partners in April?

I suspect the answer is 'unknown', judging by your follow up post to this article.
Jeff Baumgartner 1/16/2020 | 6:53:29 PM
More Peacock A few more details came out just ahead of and during the Q&A part of the presentation:

US Pay-TV Distribution:
Charter came up in in the conversation as a potential distributor, but NBCU was also asked if this new service would be coming to more cable ops as well as satellite TV and telco TV operators.

"We have a lot of [carriage] deals up next year" for NBCU, Burke said.

Strauss shrugged off concerns that Peacock will put more pressure on Comcast's MVPD business. He said there's still a segment that wants the bundle, though it's declining, but others are Internet-only customers who watch video differently. "We think we can be in both places," Strauss said.

International Distribution:
Strauss said the plan is to take Peacock out of the US over time, but didn't say when or how that global rollout would take place – though Sky is expected to be the first to do it.

Burke also addressed NBCU's partnership with Hulu. When NBCU exited its equity position with Hulu it arranged to get some NBCU content (the newer stuff) back right away with an opportunity in 2 years to take all of NBCU's content off of Hulu (including library content) if it chooses to. But he said it's too early to say how that will shake out.

As for content windowing, movies will continue to go to HBO after the theatrical window, but Peacock will get the following TV window. "We are taking back the FX window," Burke said.

But NBCU will continue to license content to SVoD players. "We'll have a lot on Peacock," Burke said ."But not everything this company makes is going on Peacock."

Linda Yaccarino, chair of Advertising and Partnerships at Comcast, said Peacock will explore 'shoppable TV' and use pause ads, and outlined three specific other ad-related categories:

-Solo ads: A brand is the "hero" of an episode with a single ad.
-Explore ads: The use of contextual data to align an advertiser/sponsor with relevant programming, and enable them to send offers to a viewer's smartphone.
-On command ads: Will take advantage of X1/Flex's voice platform to engage with Peacock advertising.


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