Comcast chief financial officer Michael Cavanagh told an industry audience Monday that he expects NBC Universal’s new streaming service Peacock, should break even by its fifth year of operation.
Peacock will include content from NBCU’s pay TV networks like The Office and original content. The ad-supported service will be free to Comcast subscribers and will be available to other customers for a tiered monthly fee. Cavanagh, speaking at the UBS Global TMT Conference in New York on Monday, wouldn’t say how much that fee would be, but added the inclusion of advertising would allow the company to make that price “sensible.”
Some reports have suggested that the service will be free for all once it is launched in April.
Comcast has said it will offer more details on the service at an Investor Day presentation on Jan. 16.
Peacock would be the third major streaming service to launch since November -- Apple’s Apple TV Plus debuted on Nov. 1, followed by The Walt Disney Co.’s Disney+ service on Nov. 12. AT&T, which will launch its HBO Max streaming service in May, is currently piloting its AT&T TV streaming service in several markets.
“Our work shows us that consumer demand is there,” Cavanagh said. “With all the paid-for SVOD services that are proliferating together with traditional video, 80% of folks would be looking for something that has a reasonable amount of ads embedded in the product with premium content.”
Cavanagh told the audience that Comcast expects to spend about $2 billion on content and marketing for Peacock in its first two years combined, with the service “achieving break-even by year five.”
Cavanagh compared the streaming video service to Comcast’s launch of its wireless XFinity Mobile product in 2017, which he said required an investment of about 1% of total company revenue, and is expected to reach break-even in 2021.
“That’s the same mindset we bring to the investment in Peacock,” Cavanagh said.