NBC to Launch Ad-Supported Streaming Service in 2020
Service will be free to live TV subscribers. Cord cutters will pay about $10 a month.
Next year, NBCUniversal will join streaming services like Netflix, Hulu, CBS All Access and Disney+, but it is putting its own twist on the direct-to-consumer model. NBC’s ad-supported streaming service will be free to those who pay for live TV, whether it is through a cable company like Comcast or a satellite TV provider like DirecTV, reports CNBC. For cord cutters, NBC’s streaming service will likely be in the $10 per month range, but it will not give subscribers access to live linear channels or same-season shows.
According to CNBC, the free version of the service for traditional TV subscribers will include live linear channels, as well as same-season and past-season episodes. As a bonus, programming will be available from anywhere on any device, regardless of how they access their cable subscriptions. Those viewers will need to login to their cable or satellite TV accounts to use the service.
In a related story, CNBC reports Disney is taking control over Hulu from Comcast, effective immediately. Disney will pay Comcast for its Hulu content for the next five years. In 2024, Comcast has the option to sell its one-third stake in Hulu to Disney. In the meantime, NBC channels that are part of Hulu Live will be paid at a higher rate than the previous arrangement, and that content will be non-exclusive. In other words, when NBC launches its own service, it can run the same content on NBC as it does on Hulu Live.
“We believe strongly in the direct-to-consumer space and our content is a key driver of that ecosystem,” said Steve Burke, NBCUniversal CEO, said in a statement. “The extension of the Hulu content-licensing agreement will generate significant cash flow for us, while giving us maximum flexibility to program and distribute to our own direct-to-consumer platform, as we build that business. Significantly, this transaction also affirms the value of our stake, provides a path to liquidity and ensures our continued equity participation in Hulu’s success.”
When the announcement about the service was first made in January, Burke offered the following comments.
“NBCUniversal has some of the world’s most valuable intellectual property and top talent, both in front of and behind the camera. Many of the most-watched shows on today’s popular streaming platforms come from NBCUniversal. Our new service will be different than those presently in the market and it will be built on the company’s strengths, with NBCUniversal’s great content and the technology expertise, broad scale and the wide distribution of Comcast Cable and Sky,” said Burke.
Confused? We were too, but Vox did a good job of breaking these complicated relationships down:
- For now, all of NBCUniversal’s shows that are on Hulu will stay on Hulu.
- In a year, when NBCUniversal launches its own streaming service, it will have the option to also offer those programs on the service.
- Three years from now, as licensing agreements expire, NBCUniversal can pull its programming from Hulu and offer those shows exclusively on NBCUniversal.
- In 2024, the Comcast/Hulu deal will be complete.
- The Office is believed to be one of the programs NBCUniversal may take back from other streaming services like Netflix, once those content licensing agreements expire.
NBCUniversal is owned by Comcast, so this departure from ad-free services like Netflix makes sense. Comcast and NBC are trying to find a way to reach new, younger audiences without giving away the store. CNBC describes the new streaming service as “a nice additional benefit” for customers who are already subscribing to cable or satellite TV. They get a portable product they can watch anywhere without paying any more for it. Cord cutters will get a slimmed down version with ads. It seems unlikely that cord cutters, or cord nevers, will be sufficiently enticed to subscribe to cable or satellite TV, but millions of people follow their favorite shows wherever they go. It could happen.