NBCUniversal Wants the Last Laugh with a Video-On-Demand Subscription Comedy Service

NBCUniversal plans to launch a video-on-demand subscription comedy service this year to target viewers under 35 and capitalize on the network’s most popular comedy

NBCUniversal plans to launch a video-on-demand subscription comedy service this year to target viewers under 35 and capitalize on the network’s most popular comedy shows – The Tonight Show Starting Jimmy Fallon and Saturday Night Live. The majority of these viewers already watch videos online from their mobile devices without a traditional cable or satellite subscription.

In fact, NBCUniversal chief Steve Burke estimates that 70% of the views of Jimmy Fallon and The Tonight show are online and unmonetized – creating both a problem and an opportunity for the network.

“Here you have one of the hottest shows on television where 70% of the views are in an area that we don’t get credit for it. That’s not going to last forever,” Burke told analysts last week.

Though the project is in the early stages, experts think the new subscription comedy service will offer original comedic content at an estimated $3.50 a month. Unlike CBS and HBO Go who are also offering over-the-top (OTT) video-on-demand services, NBCUniversal’s focus will be narrower, reaching a targeted audience with a specific type of content.

Insider Take:

As we’ve reported previously, TV viewers, especially Millennials, are cutting the cable cord and moving away from traditional cable and satellite subscription packages to watch more video-on-demand. In fact, according to Nielsen, nearly 126 million Americans watch video on a smartphone at least once a month – making this a good time for networks like NBCUniversal to participate before the competition gets thick.

Like other such services, news of the launch has leaked early (PR move?) as the network fleshes out exactly what the package will look like in terms of content and price. Content-wise NBCUniversal will have to consult with its partners, including Hulu and YouTube, to see how any new arrangements will impact their contracts. It will also need to choose an appropriate price point and figure out what other revenue-generating opportunities like advertising exist in the new platform.

While there are many details to be worked out, we think it is smart of NBCUniversal to choose a targeted niche with which to experiment – and to capitalize on the popularity of The Tonight Show Starting Jimmy Fallon which just celebrated its first year on the air and the perennial favorite Saturday Night Live, now in its 40th year.

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