Eager to get its slice of the direct-to-consumer streaming action, NBCUniversal is planning to launch its own ad-supported streaming video service in April 2020, says Variety. NBCUniversal CEO Steve Burke shared a few additional details about the streaming service during Comcasts second quarter earnings call last week. For example, a team of more than 500 people is working on the service to get it ready for launch.
At NBCUniversal, we’re making great progress on the direct-to-consumer streaming service that we announced earlier this year. We believe the strength of our assets and leadership across our businesses, combined with access to tens of millions of customers, will lower both our cost of entry and execution risk as we deliver a truly special offering, Burke said.
By next spring, WarnerMedia and Disney+ will have launched their own services, creating even more competition among the leading SVOD and AVOD services. With so many streaming options to choose from, exclusive content becomes a key differentiator, whether it is licensed content or original programming. In this case, NBCUniversal has the exclusive rights to The Office, starting in 2021, but it will also be offering original shows.
We are spending money on originals. I would expect the vast majority of consumption in the beginning would be (of) acquired programs, Burke said.
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Comcast chairman and CEO Brian Roberts doesnt sound worried about the growing competition. In fact, he thinks the time is right for Comcast to capitalize on the complementary relationship between cable and streaming TV, in spite of a more saturated marketplace.
If you take a step back, there is significant competition and change in the ecosystem right now. But that said, for years, we felt that video over the Internet is more friend than foe. We believe it plays to our strengths. We’ve got a great roadmap in each of our businesses and an even better outlook when you add it all together, said Roberts.
NBCUniversal originally announced the forthcoming AVOD service in May, noting that the companys direct-to-consumer streaming service would be ad supported. The service would be free to live TV subscribers, who would get access to the service, live linear channels and same season and past season episodes of popular shows. Those customers would also be able to watch the service on any device, no matter how they access their cable or satellite subscriptions. Cord cutters would pay about $10 a month for a subscription to the service, but they would not get access to live linear TV.
For now, NBCUniversal will continue to license many of its shows to Hulu. Once the yet-to-be-named NBCUniversal streaming service goes live, NBCUniversal will have the option to offer those same shows on its own service. As licensing agreements expire, NBCUniversal can pull those shows from Hulu to offer them exclusively on their own direct-to-consumer service.
In addition to this service, Comcast and NBCUniversal are learning about streaming services from Sky, which Comcast acquired for $39 billion last fall. In the earnings call, CFO Michael Cavanaugh said sky had added 304,000 new customers during the second quarter, primarily streaming subscribers. He attributed growth to Game of Thrones and Sky Original Chernobyl. The company is doubling its investment in local original content, which will translate into additional subscribers and streaming revenue.
In the next year, the streaming wars will heat up to new levels. Disney+ and HBO Max will give Netflix, Hulu, Sling TV and others a run for their money, as consumers choose how many services they are willing to subscribe to and which ones. It will boil down to cost, user experience and content. While late to the game, NBCUniversal has the opportunity to sit back and watch as the streaming marketplace evolves and to prepare itself for a strong launch next spring.