Comcast's NBCUniversal is considering making an ad-supported version of its upcoming Peacock streaming service free for everyone, bucking the trend of charging for streaming products, according to people familiar with the matter. It would be the first free streaming on-demand video service from a major U.S. media provider.
Previously, Comcast had planned on making Peacock free only to cable subscribers and Comcast broadband customers. The new plan, which is still under consideration, would be to give away the ad-supported Peacock streaming service to anyone who wants it. An ad-free product would also be available but will come with a charge, said the people, who asked not to be named because the discussions are private.
There may also be multiple tiers of Peacock to give Comcast customers and other pay-TV subscribers additional content or other benefits, said the people. But the cornerstone product will be free and ad-supported, for both cable and non-cable subscribers, the people said.
An NBC spokesperson declined to comment. NBCUniversal is the parent company of CNBC.
Making the service free to everyone would increase the number of people using it and help generate advertising sales. Peacock would likely become the biggest so-called "AVOD" (advertising video on demand) service on the market and would serve as an experiment not only for NBC but for other media companies as they determine whether subscription products or advertising-based services make more sense.
The move comes as competitive streaming products have struck deals that make them available for no extra charge. Disney's family-friendly entertainment streaming product, Disney+, will come free for a year for Verizon wireless subscribers while costing $6.99 per month ($5.83 with an annual subscription) for everybody else. Apple's TV+ is free for a year with the purchase of a new device, then bumps up to $4.99 a month. AT&T premium wireless subscribers and top-tier broadband customers will get HBO Max for free, instead of having to pay $14.99 a month, the company announced this week.
NBC's Peacock will have more than 15,000 hours of content and will include new shows from Mike Schur, the creator of "The Good Place," and Lorne Michaels, who founded "Saturday Night Live," as well as back episodes of shows including "Parks and Recreation," "Cheers," and "The Office," for which NBC paid $500 million for five years to snatch the rights from Netflix. Still, NBC won't get rights to "The Office" until 2021 and it may take some time for new originals to generate buzz, which could limit the appeal of a paid subscription service.
Peacock will air between three and five minutes of ads per hour of programming, NBCUniversal CEO Steve Burke told CNBC in January. NBC expects to make $5 per month from every user on the service from advertising, he said.
NBC recently replaced Peacock leader Bonnie Hammer with Matt Strauss, who was previously executive vice president for Comcast's Xfinity services. While other media companies such as Disney and AT&T have unveiled ambitious and robust streaming offerings, Comcast has specifically tailored Peacock to support traditional bundled cable TV. Some of this decision stems from Burke's understanding that NBC's library isn't as strong as others, according to a person familiar with the matter. Burke has also been skeptical of pumping billions of dollars into new original programming for streaming services specifically designed to cannibalize the cable bundle, this person said.
Disclosure: Comcast is the owner of NBCUniversal, parent company of CNBC and CNBC.com.