Report: NBCU Considers Making Peacock Free To All

Comcast’s NBCUniversal may make its ad-supported streaming service free for everyone, rather than free only for traditional cable TV and Comcast broadband customers, as originally planned, according to CNBC sources.

The model might also include tiers that offer added content or other benefits for Comcast and pay-TV customers, said the sources.

NBCU declined to comment on the report.

The current plan, which calls for non pay-TV subscribers to pay $12 per month, was designed to provide maximum support for traditional cable TV.

That’s because Comcast has the most to lose among all the big legacy media companies if streaming replaces cable as the dominant television delivery platform, CNBC has noted.

Comcast yields about $6 per month in affiliate revenue from NBCU cable networks, per SNL Kagan estimates, plus some monthly revenue from regional sports networks.



NBCU has estimated that it can generate about $5 in ad revenue per user for Peacock, but it will need to maximize reach and viewership to bolster ad revenue.

NBCU said it would limit the per-hour ad load to three to five minutes, and under the plan in which Peacock would be free only to the nation’s millions of pay-TV subscribers, expected to be able to reach 30 million to 40 million users.

And now that competing new entrants in the streaming wars have revealed more specifics about their services and strategies, it’s clear that they’re aiming to overcome the potential reach limitations of their subscription fee-driven models with free offers open to significant numbers of consumers.

Last week, AT&T announced that in addition to its 10 million existing HBO subscribers, its premium wireless and top-tier broadband customers will also receive HBO Max at no charge. All others will pay $14.99 for HBO Max.

Disney+, which has a low monthly fee of $6.99 as a stand-alone ($5.83 with a year’s commitment) and will also be available in a $12.99 bundle with Hulu and ESPN+, is now being offered free to Verizon wireless subscribers.

And just-launched Apple TV+, priced even lower at $4.99 per month, will be free for a year to those who buy new iPhones or other Apple devices.

Peacock’s 15,000 hours of content will include new shows from the likes of SNL’s Lorne Michaels and Mike Schur (“The Good Place”), in addition to about 1,500 hours of NBC TV shows, including back episodes of favorites like “Cheers,” “Parks and Recreation” and (as of 2021) “The Office.” But Disney and HBO Max have more robust libraries and are spending huge sums on content development.

NBCUniversal CEO Steve Burke has privately expressed skepticism about spending billions to develop programming “for streaming services specifically designed to cannibalize the cable bundle,” according to CNBC.

Original programming costs are skyrocketing due to the intensified streaming competition, and a number of analysts have pointed out that these levels can’t be sustained indefinitely.

While Comcast’s overall revenues rose in the third quarter thanks to gains in high-speed internet subscribers, video (cable/communications) revenue declined, putting that segment down 0.7% year-to-date.

Net video subscriber losses doubled versus the third quarter of 2018 to 222,000, from 95,000.

NBCU revenue declined across cable, broadcast and filmed entertainment, although that was to some extent due to a comparison with last year’s strong, FIFA World Cup-driven ad revenue.

NBCU has been restructuring to position Peacock for the streaming wars. Last week, it merged its U.S. and international operations. Earlier last month, it reorganized its Cable Entertainment Lifestyle Networks and announced the closure of its mobile gaming division.

Matt Strauss — who had overseen Comcast’s Xfinity, which has something of an aggregator model, allowing users to opt to access competitors Netflix and Amazon Prime Video through its interface — was chosen to become Peacock’s new leader, replacing Bonnie Hammer, now head of NBCU’s U.S. and international content studios.

1 comment about "Report: NBCU Considers Making Peacock Free To All".
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  1. Craig Mcdaniel from Sweepstakes Today LLC, November 4, 2019 at 8:56 p.m.

    The only thing I have watched on NBC in the past 5 years has been #NFL Football. There probelm is content. Now #NBC wants to charge for contents I don't like for free?  I don't think so. 

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