Peacock, NBCUniversal’s big streaming bet on the future of television, will officially debut nationally on July 15, and, in an effort to build out a primarily ad-supported business for it and parent company, Comcast, the streaming service’s lowest tier will be entirely free.
NBCUniversal unveiled details about the service—including Peacock’s brand sponsors and ad formats—during an investor day presentation at its 30 Rock headquarters in New York.
The free tier, which Peacock and NBCUniversal Digital Enterprises chairman Matt Strauss said will serve as a “robust front porch” to the service, will offer up 7,500 hours of movies, current-season programming, certain classics and a curated collection of daily content and digital channels. Another tier, Peacock Premium, adds NBCUniversal originals and a larger catalogue of programming (15,000 hours) will cost $4.99 a month and will be included free in Xfinity video and broadband and Cox broadband customers’ subscriptions. For an additional $5 a month, customers can receive an ad-free version of the offering.
“There is no question some consumers will pay for and value a premium ad-free subscription service … but increasingly, streamers want alternatives and are looking to access premium content with ads in exchange for a lower cost,” Strauss said. “This represents a growing white space opportunity in the growing streaming market and the place where we plan to squarely focus Peacock.”
The national launch date is right before the 2020 Summer Olympics in Tokyo, but the full version of Peacock will come onto the market months after NBCUniversal’s previously announced April debut and even after the launch of HBO Max, another streaming service being readied by AT&T-owned WarnerMedia. An early version of Peacock Premium will roll out to Xfinity Flex and X1 customers on April 15, Strauss said, and the company will add new content and features in the months leading up to its national debut.
The app, which the company demoed Thursday, is designed to help NBCUniversal find a foothold in ad-supported streaming television, which executives say is largely untapped. Steve Burke, chairman of NBCUniversal, said ad-supported has been a “proven business model” for decades but that it just hasn’t translated well to digital. Broadcasters are not in control of advertising on platforms like YouTube and Facebook where clips of their programming often end up.
“No one is focused on primarily ad-supported premium content, and in effect, it’s a white space,” Burke said. “In some ways, we’re creating the equivalent of a 21st century broadcast business delivered on the internet.”
Each hour of viewing on Peacock will include now more than five minutes of ads, a substantial drop from the average 12 minutes of advertising common on linear television. Peacock’s ad-supported version will feature digital ad experiences like binge ads, pause ads, shoppable ads and prime pods, along with solo ad units where marketers sponsor entire episodes, explore ads that prompt viewers to sign up for promotions and special offers, and on-command ads that leverage voice technology, said Linda Yaccarino, NBCUniversal’s chairman of advertising and partnerships. NBCUniversal has already signed “hundreds of millions” in ad sales commitments from a slate of launch partners including Apartments.com, Eli Lilly, State Farm, Target and Unilever.
Peacock aims to attract between 30 million and 35 million domestic customers by the end of 2024, Strauss said, with an average revenue per user of between $6 and $7, primarily from advertising revenue. In all, the company hopes to generate about $2.5 billion in revenue by 2024, which would allow the service to break even.
The company is looking to use its best-performing programming and its biggest stars to bolster the platform’s usage. To that end, full episodes of The Tonight Show Starring Jimmy Fallon and Late Night With Seth Meyers, clips of which generally perform particularly well across platforms like YouTube and Facebook, will be available on Peacock at 8 p.m. Eastern, hours before their late-night linear debuts, Fallon announced Thursday.
Peacock Premium, which will cost $4.99 a month for non-Xfinity or Cox customers, will offer thousands more hours of content, including a number of original series in the works. Comedian Kevin Hart’s Laugh Out Loud Network has signed a multiyear deal to produce a short-form comedy series and a Peacock stand-up special, said Bonnie Hammer, the chairman of NBCUniversal content studios.
Creators Mindy Kaling, Sam Esmail, Tina Fey and Rashida Jones are also working on original series for the service. Peacock originals include an adaptation of the science fiction novel Brave New World and has reboots of beloved series like Battlestar Galactica and Punky Brewster.
And it’s not just originals. NBCUniversal hopes the service attracts viewers looking for live content, too. The Peacock app will immediately begin playing television upon the app’s launch, which Strauss said serves to differentiate the platform from other streaming services that do not autoplay programming.
The platform will also offer a steady stream of content 24 hours a day through various channels designed to appeal to viewers just looking to turn on television and scroll through whatever’s playing then instead of searching for a show to watch. Those offerings will include live news programming, including a global news network from NBC News and Sky that will stream on the service, and three daily live programs focused on the 2020 Olympics.
Following the Olympics, the platform will launch a channel centered on Team USA and its preparations for 2022 and will also offer Paralympic programming and other sports like Premiere League soccer matches.
Peacock will also include a robust catalogue of library content, including The Office, which was Netflix’s most-watched show last year, and NBCUniversal comedies like 30 Rock and Parks and Recreation. The platform will be the exclusive streaming home of all of Dick Wolf’s shows, including the Law and Order, Law and Order: Special Victims Unit and Chicago Fire, Strauss said. The Peacock app will ultimately include all of Universal’s film catalog.
Peacock represents an ambitious swing for NBCUniversal, which has for years licensed its content to other streaming services like Hulu and Netflix and focused on linear television. NBCUniversal is slowly pulling back its content to bring it back into the family, and Burke said it remains to be seen whether it will pull its entire content from Hulu, which NBCUniversal could do under the terms of its exit from Hulu, in two years.
The broadcast giant, though, still has a huge portion of its business tied up in traditional linear television. At the Consumer Electronics Show last week, NBCUniversal announced it would unify its linear and digital ad inventory with a “one platform offering” across its entire portfolio, and the company has been trying to find ways to make linear television opportunities more measurable and attractive with features like shoppable ads and various addressable TV initiatives.
Burke said the industry was in the “very early innings” of a new era, and said that the ad-supported focus would give the company a leg up with a slate of high-quality premium digital inventory that will appeal to marketers.
“We like the idea of zigging when others zag,” Burke said. “We think Peacock is a good idea for our viewers and a great business opportunity for us.”