Apple showed up to the streaming wars with Jennifer Aniston and Reese Witherspoon. Disney arrived with Baby Yoda and the Avengers. HBO Max is bringing Friends.
Now its Comcasts turn. And the cable and TV giant thinks it can get a leg up on its rivals by offering something very different: Free video, plus ads.
Thats not exactly how Comcasts NBCUniversal group is going to position its new Peacock service, which it will unveil Thursday and roll out in April: Like rival services, Peacock will boast a mix of old TV movies and TV shows, including The Office, and some new stuff, including a Battlestar Galactica reboot. It may also offer bells and whistles, like sneak peeks of Jimmy Fallons Tonight Show, a new NBC news service, and a big dose of the 2020 Olympics.
But the underlying strategy behind Peacock is different than its competitors, which are looking to (eventually) sell subscriptions to ad-free streaming services, just like Netflix. Instead, Comcast executives are hoping to lure viewers with free, or essentially free, video, and make money by showing them ads. Like YouTube, or Facebook. (Comcast is an investor in Vox Media.)
Peacock is expected to offer several tiers of service, including one without any ads at all, for a reported $10 a month. But its main emphasis will be serving up ads alongside videos, to the widest possible audience.
That means that it will likely offer a completely free version to US residents when it launches, as well as one that has more content, and perhaps less ads, for $5 a month. But that paid version should also be free to Comcasts 20 million pay TV subscribers. Comcast would like to strike deals with other pay TV providers to make Peacock available to their customers, too.
Comcast ended up with this strategy for several reasons. For starters, it thinks free is a good differentiator to the other services, which will eventually expect to generate real revenue from customers (for now, many of the services will be offering some kind of free sampling; Disney Plus, for instance, is free to many Verizon wireless customers; if you buy a new Apple gadget you can get a year of Apple TV for free). Comcast is also losing access to Hulu, the place where NBCUniversal used to put its old TV shows (along with ads), because Disney took control of that service when it bought much of Fox last year.
And for several years, Comcast executives have been grousing about the money theyre not getting when they put their stuff on YouTube and Facebook. They have been telling anyone in earshot that they could make much more if they sold their own ads, for their own stuff, on their own service.
Now they get to try.
Our work shows us that consumer demand is there. With all the pay-for-[subscription video] services that are proliferating together with traditional video, 80% of folks would be looking for something that has a reasonable amount of ads, Comcast CFO Michael Cavanagh told investors last December, previewing the Peacock pitch. Were excited about what this can mean for advertisers.
Free has certainly been an effective pitch on the internet. And while tens of millions of internet users are used to getting ad-free stuff from the likes of Netflix and Spotify, many more people are still used to seeing ads in at least some of their entertainment.
And Peacock will be able to show people plenty of stuff that people have liked in the past: TV shows like Parks and Recreation, and Friday Night Lights, and movies like Meet the Parents, and the Fast and Furious series. As Netflix executives can tell you, running old TV shows and movies youve heard of before is not a bad way to launch a new streaming service.
But Peacock may not have a flagship show or buzzy concept to show off to prospective viewers, especially at first. The Office, its most popular old show, wont be on the service at launch it will be on Netflix through the end of 2020. The Tokyo Olympics, which sources say will be a big part of Peacocks pitch, wont start until the end of July. Its also unclear how much of that event Comcast will want to feature on Peacock instead of NBC and its cable networks, where they are likely to play for bigger audiences.
Which means Peacock may have to hope it can attract viewers with new, or sort of new, stuff.
On Thursday, Comcast will also unveil an international news service created by NBC News and the news division of Sky, the satellite TV company Comcast bought in 2018. If Comcast puts real resources behind the service in the past, digital versions of broadcast and cable news operations have been built with minor league budgets, and performed accordingly and lets Peacock viewers watch it, it might have a chance.
And, puzzlingly, there is buzz that Comcast will try to give Peacock viewers an early glimpse of the Tonight Show. Jimmy Fallon and company usually tape that show at 5 pm Eastern time, but it doesnt air on NBC until 11:35. Offering Peacock viewers the chance to see bits of the show in advance sounds plausible, though not much different than what networks already do to promote their shows.
Much more daring would be a move to put the entire show online for Peacock viewers (or at least ones who pay for cable TV subscriptions), because that would cause havoc with the local affiliates and cable operators who pay big fees to NBC, and are already worried that streaming is cutting into their business.
It would also be head-scratching, since the Tonight Show is not Game of Thrones: Even if you like to watch it, you probably dont need to see it a few hours before anyone else.
NBC declined to comment on its plans for the Tonight Show, as well as the rest of the Peacock launch.