Peacock, NBCUniversal’s biggest 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 NBCUniversal and its parent company, Comcast, the company’s lowest tier will be entirely free.
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 15,000 hours of movies, current-season programming, certain classics and a curated collection of daily content and digital channels. Another tier that includes NBCUniversal originals and a larger catalogue of programming will cost $4.99 a month and will be included free in Xfinity video and broadband and Cox broadband customers’ subscriptions.
“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 at an investor day presentation at NBCUniversal’s 30 Rockefeller Plaza in New York. “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 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 roll out 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 feature five minutes or fewer 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 head of ad sales. 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, The Tonight Show Starring Jimmy Fallon, 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 the show airs on linear at 11:35 p.m., Fallon announced Thursday.