While the ongoing streaming wars — and their price points — play out, NBCU’s Peacock is considering a savvy marketing move.
Comcast’s NBCU is mulling an ad-supported version of its upcoming streaming service that would be free to everyone, sources tell CNBC. This would be a first for the upcoming on-demand video services from the major U.S. players.
Hulu previously had an ad-supported free tier, but has since replaced it with $5.99 ad-supported and $10.99 ad-free tiers.
And while Peacock may eventually come with tiers, the free lure is a powerful one.
As an AVOD (advertising video on demand), Peacock has a built-in revenue source, which makes it less dependent on subscriptions. An ad-free version, which carries a charge, would also be available.
Most of Peacock’s streaming rivals, including HBO Max and Disney+, won’t offer a free tier, but have reached deals to offer a discount when bundled with your wireless plan.
The Peacock streaming service debuts in April with more than 15,000 hours of programming, including NBC powerhouses “The Office,” which arrives in 2021, and “Parks and Recreation.” In addition, Mike Schur, the creator of “The Good Place,” and Lorne Michaels of “Saturday Night Live” fame will contribute new shows.
Peacock will air between three and five minutes of ads per every hour of programming, according to NBCUniversal CEO Steve Burke. The company estimates earning $5 per month from every user on the service from advertising, he said.
Insiders believe Burke’s free-for-all strategy is bottom-line economics, reports CNBC. He is reluctant to spend billion on original fare for streamers that are designed to cannibalize cable.