Comcast’s Peacock streaming service, launching this spring, hopes to lure cord-cutters with old-school concept

NEW YORK — Comcast’s streaming service will try to lure cord-cutters with exclusive access to new originals, the Olympics, and hit movies and shows. But when Peacock takes flight this spring, the streaming service will also have…commercials.

Unlike many of its rivals, Comcast will offer free and cheaper streaming products supported by advertisements. During an investor presentation Thursday, held in Studio 8H of 30 Rock featuring Tina Fey, Jimmy Fallon, and Seth Meyers, the company said it will make a limited version of Peacock free to anyone, while a premium version will cost $4.99 per month. In addition, the Philadelphia company is bundling Peacock Premium to 24 million Comcast and Cox customers for free. Consumers can pay an extra $5 to watch Peacock without ads.

Comcast Xfinity customers will get early access to Peacock on April 15, with the service set to launch nationwide July 15.

Comcast said it expects to reach about 35 million active accounts by 2024. By then, the company estimates Peacock to generate $2.5 billion in revenue.

Comcast’s streaming strategy is quite different from others in the increasingly crowded streaming market. Rather than seek more revenue from consumers through higher subscription fees, Comcast hopes to lure viewers with cheap or free content and show them ads, much like Hulu, YouTube, or Roku. The move could help Comcast-owned NBCUniversal recoup advertising dollars that it has lost to digital and internet-connected TV competitors, according to industry analysts. It could also reflect that Comcast doesn’t have as strong of a content library at launch as competitors, analysts said.

By making Peacock free for cable customers, Comcast could quickly add tens of millions of users to the service while convincing cord-cutters to stick with Xfinity by bundling broadband with content. The cable and media giant has been losing hundreds of thousands of TV customers quarter after quarter.

“We have one of the most enviable collections of media brands and the strongest ad sales track record in the business,” Steve Burke, chairman of NBCUniversal, said in a statement. “Capitalizing on these key strengths, we are taking a unique approach to streaming that brings value to customers, advertisers and shareholders.”

Comcast enters the streaming wars with a somewhat limited content arsenal. The company boasts of 15,000 hours of movies and shows from the NBCUniversal library on the premium Peacock, from the Friday Night Lights TV series to the Fast & Furious film franchise. Peacock will also carry new originals, including Battlestar Galactica and Saved by the Bell reboots. And it will feature live news, sports, and early access to The Tonight Show Starring Jimmy Fallon and Late Night with Seth Meyers.

But it won’t have exclusive rights to hit comedies Parks & Recreation and The Office until October and January 2021, respectively. The Summer Olympics in Tokyo, which Comcast will use to promote Peacock, starts in July.

By comparison, rival Disney has Star Wars and Marvel superheroes at its disposal, while AT&T will combine premium HBO shows with Warner Bros. content such as Friends, one of the biggest streaming hits of all time, when it launches HBO Max in May.

“They don’t really have popular originals or exclusive content on the platform at launch,” Bloomberg analyst Geetha Ranganathan said earlier this week of Peacock. “When you don’t really have a huge competitive edge, I think it makes sense to go in for a lower-priced option. That is something that could spur much greater adoption across the board.”

Peacock Premium’s ad-supported tier is cheaper than Netflix ($12.99 for high definition) and Amazon Prime Video ($8.99), neither of which sells ads. Hulu charges $5.99 for its ad-supported service and $11.99 for ad-free streaming.

Newer entrants charge or will bill anywhere from $4.99 per month (Apple TV+) to $14.99 (HBO Max) for their libraries of on-demand movies and shows. Disney+ costs customers $6.99. None of them show ads.

Peacock will run about five minutes worth of ads per hour of video, Comcast executives said. The company expects to earn roughly $5 per month from each user from ads, using improved data collection and targeting capabilities. In unveiling Peacock on Thursday, NBC announced the streaming service will launch with State Farm and Target, among others, as initial sponsors, bringing in hundreds of millions of advertising revenue.