NBC parent Comcast (NASDAQ:CMCSA) finally jumped into the streaming fray this past week with the launch of its new streaming service, Peacock.

The new service will launch on April 15 for Comcast customers and July 15 for everyone else, and will offer a broad range of NBC staples including scripted TV, talk and variety shows, and news and sports programming that make up the network's typical fare. 

What's unique about the service is that it will be available in both free and paid tiers.

Peacock Free will be an ad-supported service, including next-day episodes of new broadcast series, complete classic series, around 600 movies and 400 TV series, sports programming including the Summer Olympics, select original programming, and curated channels like "SNL Vault." 

Peacock Premium, which is also ad-supported or $5 per month extra for an ad-free version, will be free for Comcast and Cox subscribers, and $5 per month for other subscribers. That version will have next-day access to current seasons of returning series, full-season Peacock originals, early access to late night talk shows, and additional sports such as the Premier League. 

NBC is targeting 30 million to 35 million active Peacock accounts by 2024, less than the 60 million to 90 million Disney+ is aiming for, but Peacock will only be a domestic service for now, while Disney+ is launching globally.

The Peacock logo

IMAGE SOURCE: COMCAST.

Finding the empty lane

What distinguishes Peacock from an increasingly crowded streaming field that includes Netflix, Disney, Hulu, Amazon, Apple, the upcoming HBOMax, and others, is that it offers a completely free version with no strings attached.

By designing a streaming service that seems intended to be ad-supported, Peacock is meeting the needs of two underserved markets: viewers looking for free web-based content, a la YouTube, and advertisers, a huge constituency that has been mostly left out in the cold by the streaming boom.

Launching Peacock will allow NBC to keep the ad revenue from reviews of segments of shows like "Saturday Night Live" and "The Tonight Show" that had traditionally been found on YouTube. However, tapping into the streaming ad market is the bigger side of the deal here.

NBC already has strong relationships with advertisers -- as NBCUniversal Chairman Steve Burke said, the company had "the strongest ad sales track record in the business." 

Among the advertisers signed up for launch include Eli Lilly, State Farm, Target, and Unilever, and additional sponsors will be named soon. Peacock will have the lowest ad load in the industry, at a maximum of five minutes per hour.

However, the streaming service will offer advertisers customizable and interactive products including things like Shoppable TV, allowing viewers to buy things within the environment of a TV show using their smartphone to scan a QR code. Such high-value and innovative ads have the potential to bring in more revenue for Comcast. 

Advertising brings in more than $2 billion in annual revenue at Comcast, and if Peacock reaches its goal of 30 to 35 million active accounts over the next five years, it could drive significant growth in that business. 

There's more to cluck about

Launching a free, ad-supported tier also borrows from the popular freemium model and gives viewers an opportunity to familiarize themselves with Peacock before deciding if they want to pay for the premium version.

Unlike other streaming services, Peacock will also have virtual channels that will stream automatically when they're pulled up, like linear TV, helping to eliminate some of the decision fatigue that comes from having to choose what to watch on services like Netflix. Such a format of auto-playing has helped fuel the rise of TikTok as well.

Given its library of popular series like "The Office," which will arrive in 2022, "Parks and Recreation," and "Friday Night Lights," as well as news, talk, sports, and kids' programming, Peacock is putting a strong foot forward in the streaming race. Since it's offering a free tier, I think the company is probably lowballing its estimate when it says it's targeting 30 to 35 million viewers in five years.

Comcast doesn't expect to make money on Peacock over the next five years, similar to Disney+, and the cable giant is plowing $2 billion into it over the next two years.  

Despite those upfront costs, the company is making the right move with Peacock, as it will ease the pain from cord-cutting by giving the company a new growth outlet and incentivizing current Comcast cable customers to stick with the service. Over time, Peacock will strengthen relationships with advertisers and eventually tackle global expansion.

Comcast shares gained 1.3% on the announcement -- much less than the bump Disney got from the Disney+ reveal -- but the stock could see gains later this year if the Peacock outperforms expectations in its first months.