Comcast (NASDAQ:) owned NBCUniversal recently announced that it will launch a streaming service in early 2020.
The ad-supported service will be free for NBCUniversal pay-TV subscribers per management. Additionally, an ad-free version, which will cost around $12/month, per CNBC, can be availed by subscribers who do not prefer ads and also by users who are not NBC pay-TV subscribers.
Reportedly, the service will host 1,500 hours of NBCUniversal content including “Saturday Night Live, 30 Rock, Parks & Recreation, The Good Place and Universal Pictures movies.” Apart from showcasing NBCUniversal’s existing content, the company is also expected to offer original programming, per Variety.
Notably, the company will retain rights to certain titles for its service and will continue to license other content to studios and platforms.
Additionally, live content like news and sports will be available on the platform, per CNBC. Moreover, content from other companies like Sony, Warner Bros. and Discovery will be part of the service.
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Ad-Supported Service to Aid Top Line
NBCUniversal’s decision to offer free service will help to boost traffic on the platform and attract more advertisers. Additionally, growing advertiser base is expected to bring in more ad dollars. This, in turn, is expected to drive the top line.
Notably, the company plans to air three to five minutes of ads/hour of programming and expects to generate $5 per user per month from its advertising services, per CNBC.
Additionally, the move may help NBCUniversal retain and attract pay-TV subscribers as they will be able to access a variety of content at the same cost as over-the-top (OTT) services. Notably, pay-TV subscribers are increasingly cutting the cord and are jumping on to the streaming bandwagon to avoid costly pay-TV subscriptions.
However, the company will not have first-mover advantage as Amazon (NASDAQ:) recently rolled out a free video streaming channel called IMDb Freedive.
Sky Strengthens Pay-TV Subscriber Reach
NBCUniversal’s service will be available to U.S. subscribers as well as Comcast Cable and Sky’s 52 million subscribers. Notably, Comcast outbid 21st Century Fox’s (NASDAQ:) offer to acquire more than 75% stake in Sky.
With Comcast being the world’s largest pay-TV operator, per Reuters, its decision to offer free streaming service to its pay-TV subscriber base is in the right direction. Moreover, Sky’s popularity in Europe, where pay-TV penetration is rapidly increasing, may further help NBCUniversal’s service gain popularity.
Further, Comcast will be able to leverage Sky’s streaming offering — Now TV and its executives team that has experience of handling a streaming service.
The Zacks Rank #3 (Hold) stock with its offerings and international footprint may create a place for itself in the streaming market, currently dominated by companies like Netflix (NASDAQ:) , Amazon and Hulu to name a few.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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