NEW YORK – A Comcast Corporation executive told a banking conference on Monday it will spend about US$2 billion to get its new streaming service, dubbed Peacock, off the ground and launched in 2020.
Michael Cavanagh, Comcast’s chief financial officer told the annual UBS Technology, Media and Telecom conference there is plenty of room for yet another streamer, especially since Peacock will be coming to market with a differentiated (and cheaper for consumers) business model – focusing on ad-supported video-on-demand (AVOD).
Comcast’s research shows 80% of those who subscribe to premium SVOD services online would put up with a “reasonable amount of ads embedded in the product,” said Cavanagh – and that’s the market Comcast will be targeting. Consumers will be happier with a lower price and advertisers will love another way into consumers’ homes.
An AVOD service, he explained, will also help the company turn a profit with Peacock no less than five years after launch. “We think it’s an approach that will lead to lower aggregate investment to get to a place where you can achieve break-even relative to the… the SVOD models we've seen so far,” he added, allowing there will be various pricing tiers for U.S. consumers to take advantage of at launch.
Cavanagh also noted Peacock will be free for Comcast subscribers.
As for the way the money will be spent? Much of it will be on content. “The nature of the spend is obviously a lot of content, spent together with meaningful marketing and early-year infrastructure build,” said Cavanagh.
He did not talk about international expansion plans for the streaming service, which the company has said will launch in April 2020.
