NEW YORK (Reuters) – Comcast Corp-owned NBCUniversal’s new Peacock service will offer free and $5-per-month options that include advertising to try to win customers for its belated entry into the streaming video wars, the company announced on Thursday.
Customers who want to avoid all advertising can pay $10 per month, NBCUniversal said in a statement released as it opened a presentation to investors at its historic 30 Rockefeller Plaza headquarters in New York.
The cost for the ad-free service will drop to $5 per month for customers of Comcast or Cox Communications, the statement said.
Peacock – Comcast’s effort to capture viewers abandoning cable TV, and named after NBC’s longtime logo – will debut for Comcast customers on April 15.
Actor and writer Tina Fey, who is creating an original comedy series for Peacock, appeared onstage to highlight the breadth of programming to be available, from the entire catalogue of series such as “Cheers,” “30 Rock,” “The Office” and “Saturday Night Live” to classic movies from “Jaws” to “Jurassic Park.”
The service will launch nationwide on July 15, the company said. It expects to reach 30 million to 35 million active accounts by 2024.
“For consumers, we think this is the right offering at the right time,” said NBCUniversal Chairman Steve Burke, who is planning to retire this year. “We believe affordability will be critical as more subscription sources are launched, leading to bigger customer bills.”
Peacock will be one of the last entries in the crowded streaming landscape, dominated by Netflix Inc and including Walt Disney Co’s Disney+, Apple Inc’s Apple TV+, Amazon.com Inc’s Amazon Prime Video, Hulu (controlled by Disney), and ViacomCBS Inc’s CBS All Access. In May, AT&T Inc’s WarnerMedia will launch its new streaming service, HBO Max.
Unlike the majority of those services, which make money from subscription revenue, Comcast will earn revenue from commercials that stream with its programming.
Peacock will include 10 types of advertising formats, such as so-called shoppable ads that let viewers purchase products, but will limit the amount of ads to no more than 5 minutes per hour. Other networks have upwards of 12 minutes of advertising per hour of TV.
Among the new ad formats, brands can buy an exclusive sponsorship that will limit ads to just one commercial during an episode.
State Farm, Target Corp and Unilever PLC are among the early advertisers to the service, which will bring in “hundreds of millions” in initial advertising revenue, NBCUniversal said in a statement.
Peacock will also feature “binge ads,” where a viewer watches three episodes of a show and a sponsor can make the fourth episode ad-free.
NBCUniversal hopes to lure advertisers through the vast amounts of data it can use to target ads to viewers based on their interests, including data from Comcast’s cable TV set-top boxes.
Peacock Free will be offered nationwide and include more than 7,500 hours of programming including classic NBC series and news and sports including the Olympics.
Peacock Premium, which will cost $5 per month and include ads, will feature more than 15,000 hours of content including Peacock originals, early access to NBC’s late-night talk shows and more sports. It will be free to Comcast and Cox subscribers, which currently number more than 24 million, NBCUniversal said. Those customers can pay $5 a month to access the ad-free option.
Of the existing streaming services, only Hulu is ad-supported, although an ad-supported version of HBO Max is expected in 2021.
Peacock’s competition ranges from $5 per-month Apple TV Plus and Disney’s $7 per-month service. The standard Netflix plan costs $13 per month.
Comcast is investing $2 billion in Peacock throughout 2020 and 2021, and will break even by year five, according to Comcast Chief Financial Officer Mike Cavanagh. Netflix, by contrast, earmarked $19 billion in cash for content in 2019.
Peacock will include original content such as “Dr. Death” featuring Alec Baldwin, shows licensed from other studios such as “Married With Children,” and complete seasons of shows from NBC’s library, including “Friday Night Lights,” “Frasier” and next year, “The Office.”
Reporting by Helen Coster and Sheila Dang in New York; Additional reporting by Lisa Richwine in Culver City, Calif.; Editing by Peter Henderson and Matthew Lewis