October 25, 2019
Seeking to avoid confusion among consumers facing a barrage of new high-profile subscription streaming video services entering the market next month, NBC Universal plans to focus its branded Peacock service around ad-supported content.
Speaking on the Oct. 24 Comcast fiscal call, Stephen Burke, CEO of NBC Universal, said Peacock would attempt to assuage Xfinity subscribers considering ditching the traditional cable bundle for over-the-top video.
“I think the most important thing to think about as you’re thinking about Peacock and its role inside NBCU and broader Comcast, is we’re not doing the same strategy that Netflix and people chasing Netflix have adopted,” Burke said.
Comcast, long a defender of linear TV, has slowly adopted Netflix, YouTube and other OTT behemoths into the Xfinity ecosystem in an effort to mollify subs and keep their discretionary home entertainment spending within the pay-TV market.
“Consumers are still trying to figure this [OTT video] out. Do I cut the cord or not? We’re in the middle of a transition phase from pay-TV model to streaming model,” Rick Kowalski, senior manager of business intelligence at the Consumer Technology Association, told NBC News. “The platforms are still trying to figure out which content and what’s the most comprehensive package they can offer, based on what their vision is. But I think we’re still in a very transitional phase.”
As a result, Burke said Peacock — which will be offered to Xfinity subs as well as the general market — would largely revolve around ad-supported content so as not to add to the monthly cable bill.
“We think that … [is going to] cut the investment pretty substantially, because I think we’re going to get to cruising altitude much more quickly than a subscription service,” he said.
Peacock will target Comcast’s 55 million video subs with a tentative April launch aimed at segueing into NBCU’s 2020 Summer Olympics coverage in Tokyo.
“It’s a very, very interesting time as everybody tries to figure out what their strategy is, and we’re very optimistic,” Burke said.
Peacock will be bundled with Xfinity Flex, Comcast Cable’s Internet-only streaming service affording direct access to OTT services, including Netflix.
“It’s a great opportunity for Flex to be able to give a lot of great NBC programming, shows like ‘The Office,’ to people at no additional charge to a broadband sub or a cable sub,” Burke said.
The executive said that, with the arrival of Apple TV+, Disney+ and HBO Max, there will be a period of “very, very aggressive” marketing and promotion surrounding the new platforms and SVOD in particular.
“At some point, there’ll be an inevitable slowing down and shakeout, and the market will get a little bit more rational,”Burke said. “But I think it’s a moment in time, and consumers are making their choices of apps and viewing habits, and you want to be aggressive to get in there and make sure that your service is one of the consumers’ handful of favorite services.”