Another day, another free, ad-supported streaming service. It was just last week that IMDb -- the Internet Movie Database, a movie information website owned by Amazon.com (NASDAQ:AMZN) -- announced the debut of its streaming video offering, IMDb Freedive.
Now, NBCUniversal, a division of Comcast (NASDAQ:CMCSA), is getting into the act. The company announced that it will throw its hat into the ring with a direct-to-consumer service that will launch in early 2020. The as-yet-unnamed service enters an increasingly crowded space that is currently ruled by incumbents like Netflix (NASDAQ:NFLX) and Amazon Prime Video.
Free for some
NBC said the service will be available at no cost to the 52 million customers who are subscribers to Comcast Cable and its recently acquired European pay-TV company Sky. The company also plans to distribute the service at no additional fee to other cable providers that carry NBC channels in their packages, including Charter and Cox, as a way to increase its reach.
"We believe that the best way to gain scale quickly is to leverage our partnership with cable and satellite companies and to offer our premium product free to consumers," said Steve Burke, chief executive officer of NBCUniversal. By doing so, the company will be able to quickly scale its ad revenue.
NBC also plans to launch an ad-free version of its service that will be available for a monthly subscription to those who aren't among its pay-TV customers. The new service will contain content from across NBCUniversal's television and film library, and will initially debut in the U.S. and expand to international marketplaces as existing licensing agreements permit.
Doing the executive shuffle
The cable giant also announced a number of leadership changes.
Bonnie Hammer, chief of NBCUniversal Cable Entertainment and Cable Studios, will head the new streaming venture. Hammer has overseen the company's leading media brands, including USA Network, SYFY, Bravo, Oxygen, E! Entertainment, and Universal Kids. Her experience at two Hollywood studios -- Universal Cable Productions (UCP) and Wilshire Studios -- will no doubt be an asset. UCP is one of the industry's fastest-growing studios, working with Hollywood content creators to develop and produce programming for linear TV channels and streaming services including Netflix, Amazon and Hulu. Hammer also brings a record of success, having generated 15 consecutive years of growth in both revenue and profit at the segments she led.
NBCUniversal will also reorganize to align its content business under execs Mark Lazarus and Jeff Shell. Lazarus will head NBCUniversal Broadcast, Cable, Sports and News, while Shell will be in charge of NBCUniversal Film and Entertainment.
A crowded field
There are currently two distinct approaches to streaming: subscription-only platforms and free, ad-supported services, with a small amount of overlap.
Netflix and Amazon are currently the undisputed champs in the streaming space, with both requiring a subscription. Netflix has more than 137 million paying customers worldwide, making it the clear leader. Amazon doesn't divulge the number of viewers, but CEO Jeff Bezos revealed last year that its Prime loyalty service had more than 100 million members -- each of whom has access to Prime Video included in their membership.
On the free, ad-supported side, consumers are also flocking to services like Hulu and Roku (NASDAQ:ROKU). Hulu recently revealed impressive subscriber increases, adding 8 million new subs in 2018, a 48% year-over-year increase, bringing its total subscriber count to 25 million. Hulu will soon be led by Disney (NYSE:DIS), which will own a 60% stake in the streaming once its acquisition of Twenty-First Century Fox (NASDAQ:FOX) (NASDAQ:FOXA) is complete, a deal that is expected to close later this year. Disney then plans to seed Hulu with content from across both Disney and Fox.
On the paid side, The House of Mouse is also planning to debut a Disney-branded subscription streaming service, dubbed Disney+, that is expected to launch by year-end and compete directly with Netflix and Amazon.
For its part, Roku pre-released key metrics to its recently completed holiday quarter, also reporting significant gains. Active accounts increased to an estimated 27 million, up 40% year over year, while streaming hours surged 68% to 73 billion.
Time will tell
With all the existing players and new entrants into the nascent streaming video market, it will be some time before we know who the ultimate winners will be. One thing's for sure: Everybody wants a piece of the action.
John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Danny Vena owns shares of Amazon, Netflix, Roku, Inc, and Walt Disney and has the following options: long January 2019 $85 calls on Walt Disney. The Motley Fool owns shares of and recommends Amazon, Netflix, and Walt Disney. The Motley Fool recommends Comcast. The Motley Fool has a disclosure policy.