Please ensure Javascript is enabled for purposes of website accessibility

Comcast Customers: You've Got a Free Streaming Service Coming Your Way

By Danny Vena - Updated Apr 18, 2019 at 11:33PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Seems everyone wants a piece of the streaming video market.

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 (AMZN 0.89%) -- announced the debut of its streaming video offering, IMDb Freedive.

Now, NBCUniversal, a division of Comcast (CMCSA 1.29%), 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 (NFLX 2.06%) and Amazon Prime Video. 

Wall with dozens of TV screens and a man in silhouette with a remote.

Consumers have a growing number of streaming choices. Image source: Getty Images.

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 television featuring The Roku Channel.

A growing list of ad-supported options. Image source: Roku.

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 (ROKU 3.60%). 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 (DIS 2.45%), which will own a 60% stake in the streaming once its acquisition of Twenty-First Century Fox (FOX) (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.

Check out the latest Comcast earnings call transcript.

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Comcast Corporation Stock Quote
Comcast Corporation
$39.91 (1.29%) $0.51
The Walt Disney Company Stock Quote
The Walt Disney Company
$120.57 (2.45%) $2.88
Netflix, Inc. Stock Quote
Netflix, Inc.
$247.69 (2.06%) $4.99, Inc. Stock Quote, Inc.
$141.88 (0.89%) $1.25
Twenty-First Century Fox, Inc. Stock Quote
Twenty-First Century Fox, Inc.
Twenty-First Century Fox, Inc. Stock Quote
Twenty-First Century Fox, Inc.
Roku Stock Quote
$83.55 (3.60%) $2.90

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.