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Comcast's Peacock-Google Platform Launch Slated for July

Zacks Equity Research

Comcast CMCSA-owned NBCUniversal has announced a distribution deal with Alphabet’s GOOGL Google for the roll out of its new streaming service, Peacock, on Jul 15 in the United States. The platforms include Android, Android TV, Chromecast and Chromecast built-in devices.

Android and Android TV users will receive complimentary access to Peacock ad-supported Premium through Oct 15. Once the promotion ends, Peacock's Premium plan will be available for about $5 a month. Viewers can further opt to upgrade to an ad-free tier for an additional $5 per month.

Users can purchase full Peacock subscription directly on the Android app using Google Play’s in-app billing. Google will charge a 30% cut of the $5/$10 monthly plans for Peacock Premium that NBCUniversal has unveiled.

Starting April, Peacock Premium is available free of cost for 24-million Comcast Xfinity and Cox subscribers. Comcast previously announced that Peacock will be available on Apple AAPL devices, including the Apple iPhone, iPad, iPod touch, Apple TV 4K and Apple TV HD and also on Microsoft’s Xbox devices. It makes sense that NBC would want to bring Peacock to Android and Chromecast devices too.

Comcast Corporation Price and Consensus

 

Comcast Corporation Price and Consensus

Comcast Corporation price-consensus-chart | Comcast Corporation Quote

Peacock’s Content Library to Gain Subscriber Attention

Peacock’s offering includes a free, ad-supported tier limited to a range of 75K hours of content. Additionally, a $4.99 premium, ad-supported tier with 15K hours of Peacock content and an ad-free premium tier that will cost $9.99 per month are available.

The platform will soon be the exclusive streaming home of The Office and Parks and Rec, and it will host Tokyo Olympics, which was postponed due to coronavirus. Peacock’s full content line-up includes a mix of shows from the NBCUniversal empire, new original content and select movies ranging from the Despicable Me franchises to Knocked Up.

Peacock’s slate of original drama and comedy includes a crime series podcast Dr. Death starring Alec Baldwin and an adaptation of Brave New World with Demi Moore, Rutherford Falls starring Ed Helms, and Girls5Eva produced by Tina Fey.

Additionally, Peacock will stream Two and a Half Men and The George Lopez Show from AT&T’s Warner Brothers and ViacomCBS-owned Paramount Network’s hit series Yellowstone.

Moreover, a licensing deal with Lionsgate will add movies such as John Wick, while the NBCUniversal-owned Telemundo will provide 3,000 hours of Spanish-language original programming.

Peacock’s Ad-Based Subscription: Potent Threat for Netflix

Comcast’s hybrid business (both subscription and advertising) model is expected to be a key differentiator in an overcrowded streaming industry saturated with pure subscription services.

While subscription streaming services like Netflix NFLX, Amazon’s Prime Video, Disney+ and Apple TV+ offer ad-free services, Peacock, Quibi and ViacomCBS’ CBS All Access will have ad-supported options, as does Hulu.

Netflix is dominating the streaming space with 182 million paid subscribers, courtesy of its diversified content portfolio, which is attributable to heavy investments in the production and distribution of localized, foreign-language content. However, Netflix expects viewing and subscriber growth to decline once the coronavirus-related lockdowns and movement restrictions are lifted.

Moreover, entry of Peacock’s new low cost and ad-based subscription service is likely to threaten Netflix’s dominance in the streaming industry. Peacock will include 10 advertising formats, including ‘shoppable’ ads which let viewers purchase products but limit the duration to 5 minutes or less per hour.

Comcast hopes to attract advertisers through the vast customer data it gathers to target commercials based on viewers’ interests, including data from Comcast's cable TV set-top boxes.

Key brand sponsors like Target, Unilever, State Farm and Eli Lilly have signed early advertising deals for Peacock, which are expected to generate millions in upfront advertising revenues for the company in the near term.

Notably, the Zacks Rank #3 (Hold) will invest $2 billion, largely in technology, marketing and programming for Peacock in 2020 and 2021, and plans to break even by 2024, setting a target of 30-35 million active accounts by that time. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Comcast’s subscription free service is expected to strengthen viewership through Peacock’s compelling content quality, diversity and exclusivity, which will further drive ad monetization. Notably, Peacock will also include binge ads feature where sponsors will make the fourth episode ad-free once viewers watch three episodes of a show.

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