NBCUniversal says it will launch an ad-supported streaming service in Q1 2020 that is free for pay-TV subscribers; source: non-subscribers could pay ~$12/month
totally different than what the rest of the industry is doing. It will be free for pay-TV users and about $12 for cord-cutters. Lots of stuff here: http://www.cnbc.com/... Alex Sherman / @sherman4949 : NBC feels like it can get about $5/person/month in ad revenue with this service and can scale it to tens of millions of people quickly. That's the preferred strategy over starting from zero and charging $10/month to everyone. http://twitter.com/... Alex Sherman / @sherman4949 : Streaming World: Netflix: Subscription, long form Quibi: Subscription, short form YouTube: Free ad-supported, short form NBC's idea: Free ad-supported (for many), long form http://www.cnbc.com/... Modest Proposal / @modestproposal1 : So basically Comcast is launching TV Everywhere but for NBCU only because they own the rights http://www.cnbc.com/... http://twitter.com/... Rakesh Agrawal / @rakeshlobster : The challenge with NBC, CBS launching their own services is that people like me (and many millennials) don't know what shows are on what networks. They don't have the affinity that a Disney does. I know I like The Good Place. I have no idea what network that's on. Scott Porch / @scottporch : I'd say the odds are very high that Friends and Big Bang will be on the Warner SVOD, The Office will be on the NBCU SVOD, and none will be on other SVODs by the end of 2020. Rakesh Agrawal / @rakeshlobster : This is what I've been saying for a decade about “unbundling.” By the add the items you want a la carte, you get to a total that is higher than the bundle price the MVPD charges. I'm not paying for NBC and CBS All Access and HBO and whatever else people come up with. https://twitter.com/... @cnbc : NBC is banking on a free streaming service to counter-balance Netflix, Disney and Amazon http://www.cnbc.com/... Morgan Brennan / @morganlbrennan : A case study to watch: $CMCSA 's NBCUniversal (CNBC's parent co) enters the increasingly crowded streaming service space - but w. a different biz model http://twitter.com/... Peter Kafka / @pkafka : $12 a month for people who want to watch old NBCUniversal shows, movies but don't have a cable subscription. http://www.cnbc.com/... http://twitter.com/... Peter Kafka / @pkafka : Presumably Disney will have bought out NBC's stake in Hulu by then. Q: what happens to the valuable NBC content - first and foremost The Office - currently on Netflix? http://www.recode.net/... http://twitter.com/... See also Mediagazer
Context & Ripple Effects
NBCUniversal is entering streaming from the opposite end of the market than Netflix, Disney and Amazon: rather than charging everyone a subscription fee, it gives the ad-supported service away to pay-TV subscribers and charges cord-cutters roughly $12/month, betting on about $5 per person per month in ad revenue at tens of millions of users. The move doubles as a defensive play for Comcast's cable bundle, which gets a new reason not to be cancelled.
The bet has already been repriced once: by late 2019 NBCU was reportedly considering making the service free for everyone with an ad-free paid tier, and Comcast later committed $2B through 2021 against a 30M-35M user target — evidence the original pay-TV-gated structure was under pressure almost immediately.
First-order effects
- Pay-TV subscribers get the service at no extra cost, turning it into a churn-retention tool for Comcast's video business, while cord-cutters face a ~$12/month price point positioned against Netflix-style subscriptions.
- NBCUniversal's revenue model shifts from per-subscriber fees to advertising yield — its own math assumes ~$5/user/month in ads, which only works if scale reaches tens of millions quickly.
Second-order effects
- Rivals built on pure subscriptions are forced to hedge: Netflix's later announcement of cheaper ad-supported plans follows the same logic NBCU started from, validating the hybrid model.
- Advertisers gain a scaled premium-video alternative outside YouTube, pressuring CPMs and giving brands reach against Netflix and Disney inventory they previously couldn't buy.
Third-order effects
- The industry splits structurally between subscription-first and ad-supported-first services, and the data suggests the latter struggles to convert: internal figures later showed only 11.3M US households regularly watching Peacock, with just 20% of its 14M MAUs paying — pushing NBCU toward bundling talks with ViacomCBS.
- If free-with-ads becomes the default entry point across the industry, pay-TV bundles evolve from content gatekeepers into discounted distribution channels, and the ~$12 cord-cutter price becomes the ceiling every streamer prices against.
The trend: Streaming is bifurcating into hybrid ad-plus-subscription models, with legacy media using pay-TV bundles as free distribution and pure-play subscription services like Netflix following them into advertising.