Philadelphia-based cable giant Comcast Corp. on Thursday plunged into the crowded streaming market with a low-cost service called Peacock that will carry live news, sports and late-night programming from NBC along with such favorites as “The Office.”
Peacock, which will roll out nationwide July 15, will be available in three tiers: $9.99 a month without commercials, $4.99 a month with ads, and a more limited version that will be free to Comcast and Cox cable customers.
It’s one of four major streaming services that will launch in less than a year, underscoring how rapidly streaming is changing the television business.
The service will draw from a library of more than 10,000 hours of current and classic series, from “The Office” to executive producer Dick Wolf’s “Law & Order” and Chicago-based procedural dramas. Peacock also is making NBC’s late-night offerings “The Tonight Show Starring Jimmy Fallon” and “Late Night With Seth Meyers” available for streaming 3½ hours before they air on television on the East Coast.
Peacock also will carry Olympics programming — including live event coverage and the opening and closing ceremonies of the 2020 Summer Games in Tokyo before they air on TV in prime time. Premier League soccer matches not available on television and hours of Ryder Cup golf coverage will also be offered.
The live sports, news and timely late-night shows are expected to differentiate Peacock from streaming giant Netflix, Walt Disney Co.’s Disney+ and the upcoming HBO Max from WarnerMedia, which will largely depend on scripted series and films.
From NBC News, Peacock will stream “NBC Nightly News With Lester Holt,” and NBC News Now, an online channel aimed at younger viewers. It will also carry NBC/Sky Global News, a new international channel with the London-based pay TV service Sky, which Comcast acquired in late 2018.
Comcast presented Peacock to investors and media gathered at Studio 8H — home of its sketch comedy franchise “Saturday Night Live” — on Thursday at NBCUniversal’s headquarters at Rockefeller Center in Manhattan.
“We think this is the right offering at the right time,” NBCUniversal Chairman Steve Burke said, opening the presentation.
The move is Comcast’s second major business initiative in two years. In 2018, Comcast spent nearly $40 billion to buy Sky, which provides television service to more than 20 million homes in five European countries, including Britain and Germany.
The company aims to commit $2 billion over the next two years to program development and marketing for Peacock, well under the budgets for Apple, which recently launched Apple TV+; Amazon’s streaming service Amazon Prime Video or Netflix.
Peacock will be available first to the 24 million subscribers of Comcast’s Xfinity broadband internet service starting April 15 at no extra cost. Cox Communications will also make the service available to its subscribers.
Comcast is projecting that Peacock will have between 30 million and 35 million active accounts by 2024 and has said it expects the service to break even in five years. The service is launching domestically, but will eventually expand to territories outside the U.S., according to Matt Strauss, chairman of Peacock and NBCUniversal Digital Enterprises.
Peacock will start at $4.99, giving subscribers early access to late-night shows and full seasons of original series exclusively available on Peacock.
The $9.99-per-month pricing on the premium, ad-free service comes in above the $6.99 for Disney+, which analysts have praised for being a consumer bargain. It’s also under the monthly fee for HBO Max ($14.99). Netflix offers a range of pricing from $8.99 to $15.99 a month.
A free ad-supported version — Peacock Free — will provide users with access to first-year NBC series the day after they air on the network. Classic series, sports, news and feature films from the Universal Studios library will also be included. Selected original Peacock shows — such as a new series from “30 Rock” creator Tina Fey — will be in the lineup as well.
Comcast’s decision to go with ad-supported versions is a bet that there will be significant demand for online video advertising as the size of the audience for traditional TV continues to erode. Annual ad revenue for TV has stayed in the range of $70 billion annually in recent years even though viewing has declined steadily as streaming has become the preferred way to watch sitcoms and dramas.
Linda Yaccarino, chairman of NBCUniversal Advertising and Partnerships, stressed the opportunity for advertisers to reach online viewers with content from the company’s networks.
Ad-supported versions of Peacock will carry five minutes of commercials or less per hour, well under half the amount for shows on cable and broadcast networks. There will also be a “frequency cap” so that viewers don’t see the same ad repeatedly. Additionally, Peacock will offer “solo ads” in which an entire episode will be supported with a single commercial. There will also be “on command” ads using voice activation technology.
Eli Lilly and Company, State Farm, Target and Unilever are among the first major advertisers to sign on for Peacock.
Cable and satellite cord-cutting has also contributed to a decline in ratings for NBCUniversal-owned cable outlets, including USA, Syfy and E!, leading to lower advertising sales. Such channels are received in fewer homes than they were just five years ago, decreasing the revenue that comes from affiliate fees.
Nonetheless, Comcast’s most profitable business is selling broadband internet service to more than 25 million consumers, and those connections have become more valuable. To underscore that point, Comcast has offered Netflix as part of its cable bundle since 2018.
Residents in Los Angeles, New York and Dallas don’t have access to Comcast. However, the move to streaming will allow customers in L.A., New York and beyond to sign up for Peacock, allowing Comcast to form relationships with millions of new customers.
Comcast’s investor day also gave Wall Street a glimpse of NBCUniversal’s newly minted chief executive, Jeff Shell. In December, Burke announced that he would step down next summer after running the company for nearly a decade. Burke now is chairman of NBCUniversal until August, when he will officially retire at the age of 62.
Shell, who became the CEO earlier this month, has been a Comcast executive for 15 years. The Los Angeles native became chairman of the Universal film studio in 2013.
“This is going to be a very successful product and a key area of growth for NBCUniversal going forward,” Shell said.