Why Peacock Is Right to Make Comcast Subscribers Pay

Why Peacock Is Right Make Comcast Subscribers Pay
Illustration: VIP+; Adobe Stock

Overlooked amid recent comments made by NBCUniversal CEO Jeff Shell at a UBS investor conference was the fact that NBCU is planning to remove the free access Xfinity subscribers have to the Peacock streaming service. 

Not all Comcast Xfinity, Charter Spectrum and Cox subscribers have activated their accounts, given the number of monthly active accounts, which includes paid subscribers, is lower than the total number of MVPD and broadband subscribers with access. 

Yet subscribers with complimentary access do make up a sizable proportion of the total users. With Peacock generating losses — estimated to be $2.4 billion for 2022 — it's important, especially given Wall Street’s sudden turn on whether streaming is a good bet for media companies, to find ways to boost that. 

Making those who currently get ad-supported Peacock Premium (PP) for free to pay is a great move. While it is unrealistic to expect most of those currently receiving it for free to pay, at least a couple of million will likely opt to do so, having tasted access to such things as the EPL, WWE and Sunday Night Football and not wanting to lose access. 

NBCU has opted to provide a soft landing for those losing free Peacock Premium access. DirecTV subscribers are now able to add PP for $2.99 a month, versus the market rate of $4.99, which may be low enough to convince some Comcast/Charter/Cox users to move to that tier. With inflation what it has been this year, there’s not much you can buy with $3 anymore, so pricing Peacock at that for TV or broadband subscribers is a smart play. 

The recent announcement that the Peacock Premium Plus (PPP) tier, which costs $10 to the public — and will not be discounted for TV/broadband subs — and $5 for Comcast subscribers, will have live local news access (as opposed to the one-hour delay free Peacock users get to see for NBC owned-and-operated stations on Peacock’s FAST channels) will help to make Peacock stickier for broadband-only subscribers.  

This is part of having access to a live feed of the local NBC affiliate. This includes NBC and syndicated content as well as NFL games, NASCAR, college football and EPL games and will see some cord-cutters within the broadband footprint opt to pay for the SVOD. 

But not all people with access to Peacock Premium for free will keep it. It’s likely for that reason that Peacock, after months of reducing its available FAST channels, recently added 21, including ones based on big-name movies NBCU has the rights to and popular franchises that had previously been locked away on the SVOD tier, including “The Office,” “Law and Order” and the “Chicago” series of shows. 

The reasoning for this is to monetize assets that were likely not seeing as much catalog play as envisioned. Whilst Peacock promised a “Law & Order” channel to be available at launch in 2020, it has taken almost two and a half years to get this but means the FAST service within Peacock will be able to provide big IP to viewers, including many who used to have access to the Premium tier and watched these shows on-demand. 

Thus, Peacock will be able to monetize those Xfinity subscribers who move down to the Peacock Free tier with new FAST channels but will also be able to add to its subscriber base with those who opt to pay for a subscription. This alone won’t plug the holes in Peacock’s losses (better FAST channels will also drive revenue up but not to break-even levels), but it’s a step in the right direction for streaming to be not such a money pit on the bottom line.