Despite taking its name from one of the flashiest animals on the planet, NBCUniversal’s Peacock streaming service is at risk of blending in with the flock.
Unveiled on Thursday at Rockefeller Center, where a 15,000-pound bird constructed for the occasion from shrubbery and lights towers over Midtown tourists, Peacock was the latest major streaming service to announce its debut in recent months.
When it goes live in April, it will have a deep library of content and a smattering of originals. So what will distinguish Peacock from Amazon Prime Video, Apple TV Plus, Disney Plus, Hulu and Netflix, other than its affinity for avian references on Twitter?
Its hefty bet on advertising.
On Thursday, at the studio where “Saturday Night Live” is filmed, NBCUniversal laid out a plan that relies on commercials, rather than subscribers, to generate much of its revenue.
The so-called Peacock Free option, one of three tiers that will be made available, will allow viewers to watch current seasons of NBC shows, series from the past, movies, news programming, Spanish-language content and sports coverage, including portions of one of NBC’s most elaborate productions, the 2020 Summer Olympics and Paralympic Games in Tokyo.
In exchange for paying nothing, Peacock Free viewers will sit through commercials from State Farm, Target, Unilever and other brands, making Peacock more akin to YouTube than Netflix. NBCUniversal executives hope the reliance on ads will give them an advantage over the streaming services from The Walt Disney Company, Apple, AT&T and other media giants.
Peacock will go live on April 15 for certain Comcast customers, expanding nationwide on July 15, nine days before the 2020 Games. NBCUniversal plans to spend hundreds of millions of dollars to market the streaming platform, which it expects to rack up between 30 million and 35 million accounts by 2024.
Peacock has nailed down exclusive streaming rights to shows like “The Office” and “Parks and Recreation” while also lining up reboots of “Saved by the Bell” and “Battlestar Galactica.” A series based on the true crime podcast “Dr. Death,” featuring the actors Jamie Dornan and Alec Baldwin, is coming, as is an adaptation of “Brave New World,” with Demi Moore. The “Law and Order” shows will be on tap, as will the Paramount Network hit “Yellowstone.”
Peacock will also try to attract viewers through a licensing deal with Lionsgate, known for films like the “John Wick” action series, and the NBCUniversal company Telemundo will provide 3,000 hours of Spanish-language original programming. The platform will be the only streaming service with new films from Universal.
But Peacock’s pride is its sprawling library — more than 600 movies and 400 series — which it hopes will draw more advertising dollars.
“Peacock is unique because of its advertiser model,” said Dan Ives, an analyst with Wedbush Securities, mentioning the “massive moat of content” available through the platform. “This could be a watershed event in terms of starting to monetize advertising in the streaming world.”
In addition to the free option, Peacock will offer a premium level with double the content: more than 15,000 hours of original programs, hit shows, current series and sports. Subscribers will have early access to evening shows like “The Tonight Show starring Jimmy Fallon” and “Late Night with Seth Myers.”
Peacock will also offer a comedy special and an interview series from Kevin Hart’s Laugh Out Loud company, a show about a washed-up band called “Girls5Eva” from Tina Fey, new animated episodes of “Curious George” and “Where’s Waldo,” live coverage from the 2020 Olympics, and Premier League matches.
Viewers who subscribe to the cable giants Cox or Comcast, which owns NBCUniversal, will get free access to the extra content, while other viewers will pay $4.99. For $9.99 a month, or $5 for subscribers, Peacock viewers can upgrade to an ad-free version of the service.
Other streaming services, like the Disney-owned company Hulu, offer discount plans that come with ads, and the still-gestating short-form video app Quibi, set to start streaming April 6, will also go the ad route.
Comcast does not expect Peacock to be profitable in its first five years, executives have said. The cable company, which has 21.4 million video subscribers and 28.2 million broadband subscribers, plans to inject $2 billion into Peacock over its first two years.
Peacock will have various advertising formats, including ads that only show up when viewers hit pause and ads designed to appear during bingeing sessions. Peacock viewers will encounter five minutes of ads per hour or less, according to NBCUniversal, which is also capping the number of times an ad can appear to the same audience. The company said that it will use customer data from Comcast set-top boxes, advertising partners and its own collection to deliver relevant ads.
The platform will become a repository for shows like “Saturday Night Live” and “The Tonight Show,” content often found on YouTube that NBCUniversal would prefer to bring more securely into the fold.
But some of Peacock’s most anticipated content will not be available for months. “The Office,” the enduring sitcom that NBCUniversal wrested from Netflix last year in a $500 million deal, will continue to stream on Netflix until it moves to Peacock in 2021.
Last year, NBC snapped CBS’s 18-year winning streak when it topped viewership rankings during the November ratings sweeps period, which helps determine advertising rates. But some analysts have expressed concerns that NBCUniversal may be cannibalizing itself to support Peacock, forgoing licensing arrangements and other revenue-generating deals for popular titles like “The Office” in order to provide exclusive streaming content to its customers. By offering early peeks at late-night shows, NBCUniversal may offend station affiliates and cable operators that pay to carry those broadcasts.
“Getting in the game with Peacock is the right way to preserve an audience, but it will be very, very expensive,” said Peter Supino, an analyst at Sanford Bernstein.
Peacock went through a choppy development process, with a shake-up in its leadership team less than a month after the service was announced in September. Last month, NBCUniversal’s chief executive, Stephen B. Burke, said that he will step down when his contract expires after the 2020 Olympics.
The platform faces intense pressure from competitors like Disney, which blazed out of the gate in November with Disney Plus. Consumers are battling streaming fatigue, with multiple studies concluding that viewers are only willing to pay for a handful of services.
“There’s a battle for market share, and they’re going to have to fight tooth and nail for consumer eyeballs,” Mr. Ives said. “Timing and pricing are key.”
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