Peacock Free Tier is dead, but did NBCU make a mistake?

NBCU launched its Peacock platform for free in 2020; disappeared nearly three years later. One observer said: “Why the hell would you stop?”

Peacock’s three-tier streaming approach was innovative. It was also a total accident.

Following the failure with Seeso, NBCUniversal has been gearing up for streaming again just in time for the 2020 Summer Olympics. The Peacock was also a silly name, but at least it had brand recognition as the NBC mascot. Just one problem: no Summer Olympics.

The early stages of Covid canceled everything in the spring of 2020, and the Summer Games were postponed to 2021 due to the epidemic. Without value-adding originals and an opening ceremony in Tokyo, NBCU was forced to launch its Peacock platform… for free. On January 31st, the company finally fixed this bug and withdrew the option for new users. The announcement comes just days after Peacock finally surpassed 20 million paid subscribers — and reported a loss of $2.5 billion in 2022.

Timing aside, the move to the original two-tier subscription revenue model ($4.99/month for ad-supported “Premium” and $9.99/month for ad-free “Premium Plus”) is “always built into the plan,” person in the know. he told IndieWire about the decision. According to our source, NBCU has been “anticipating” this timing for some time, and the free tier began to unravel in earnest months ago when Peacock slowly began moving “The Office” and other content from free to pay.

NBCUniversal will begin unbundling free Peacock “Premium” from Comcast and Cox (and smaller regional companies) cable packages in the first half of 2023. The service will of course remain available to customers; they just have to pay for it.

Freecock accomplished its goal. It brought a bunch of people into the ecosystem, which is step 1 of the oft-repeated streaming mantra: “Scale, then monetize.” IndieWire is told there are no immediate plans to shut down free Peacock for the millions of people still on the tier, or for those who opt out of paid and land on free.

ANGELYNE -- "Gods and fairies" Episode 103 -- Pictured: Emmy Rossum as Angelyne -- (Photo: Isabella Vosmikova/Peacock)


Isabella Vosmikova/Peacock

Still, the news of Peacock’s sudden end to its free, ad-supported streaming television (FAST) tier was a surprising strategic shift. “I wouldn’t have,” said Colin Dixon, founder and chief analyst at NScreenMedia. “I think they have a winning strategy — it’s working. They are seeing significant growth in both premium subscribers and free users, and why on earth would you stop?”

TVREV co-founder and senior analyst Alan Wolk told IndieWire that it’s worth some time to think about it. Therein lies the logic Other FAST service under the general umbrella of Comcast, Xumo Play. A few years ago, Pluto TV, Tubi, and Xumo were the top three FAST services available. Since then, ViacomCBS (now Paramount Global) acquired Pluto in 2019, and Comcast acquired Xumo in early 2020, shortly before Fox snapped up Tubi.

After Charter cut Comcast a $900 million check, Xumo became a joint venture, moved into device manufacturing, and renamed FAST’s service Xumo Play. (Think Xumo and Xumo Play, sort of like Roku and Roku Channel.) After a global pandemic, Pluto TV is huge, Tubi is booming, and Xumo Play, in Dixon’s estimation, has “also run.” (Ever heard of it?)

While Xumo worked in what Wolk somewhat called “uncertain ground,” the free peacock continued to grow. According to a TiVo Video Trends survey released in mid-2022, Peacock was the #3 AVOD/FAST service, behind only the Roku channel and Tubi. Xumo Play didn’t even make the top 15.

Representatives for NBCUniversal and Comcast told IndieWire that they did not coordinate the Peacock decision with the Xumo joint venture. Despite sharing Comcast’s ownership, they are separate operations. This could be Comcast’s chance to rewrite history — and get something out of Xumo.




“They were basically looking at what Amazon, Vizio, LG and Samsung were doing,” Wolk said. “They all have their own FAST at the heart of their working ecosystem; you turn on a Vizio TV, you see WatchFree, and then you see a bunch of other things. So it drives traffic to WatchFree, but it also allows them to sell ads to HBO, Amazon and Netflix to promote their shows… it’s a good source of revenue.”

One thing Wolk and Dixon agree on is Xumo’s potential importance in this burgeoning in-display advertising market. Wolk called the choice of smart TV operating system (tvOS) the industry’s “next big battle.”

“Whoever owns the operating system can decide what services appear on TV, in what order, how they are advertised,” he said. “It’s very valuable to have that, plus the data they collect.”

There’s also value in owning what Comcast/NBCU doesn’t currently have, so could NBCUniversal’s newfound FAST slot be filled by acquisition? Wolk doesn’t see that happening. But Dixon thought that if Xumo Play wasn’t the new Freecock, and if M&A chatter about Comcast, Paramount Global or Warner Bros. Discovery never materialized, NBCU could target Roku or even Chicken Soup for the Soul (because of Crackle). ).

Or NBCUniversal, moving forward, will just remain free.

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