The streaming industry has grown incredibly competitive in just the last couple of years with the introduction of platforms such as Walt Disney's Disney+, Warner Bros. Discovery's HBO Max, and Apple's Apple TV+ in addition to industry giant Netflix (NFLX -0.19%). As a result, streaming wars have become a hot topic of conversation among analysts.

One more company joining the fray is Comcast (CMCSA -0.63%), which has made significant strides with its streaming service, Peacock. Here's why investors would be wrong to overlook this streamer and how it could substantially threaten its competition.

Impressive growth

Peacock launched in July 2020 from Comcast's television and streaming division, NBCUniversal. The platform offers a library of NBCUniversal and third-party content, including TV series, movies, news, and sports. Consumers can choose from three subscription options: a completely free, ad-supported tier for access to a portion of the library; a second ad-supported tier for $4.99 per month with access to the entire library; and an ad-free experience for $9.99 per month. 

The streaming service has so far proven incredibly successful for Comcast. In June, the company boasted that Peacock had doubled its revenue over the last year from $500 million to $1 billion, resulting in the "highest grossing upfront [revenue] since Comcast's acquisition" of NBCUniversal over 10 years ago. 

Peacock has offered ad-supported content from the start, which seems to have paid off. A recent study showed that Peacock has a higher percentage of ad-supported subscribers than any other platform, with 73% of respondents choosing ads on the NBC platform and 20% going ad-free. By contrast, HBO Max has the lowest number of ad-supported users at 28%, and Paramount+ is the second-highest with 64%.

Additionally, Peacock has consistently grown its share of the streaming market each year. The streaming service grew from a 2% share of subscriptions in the first quarter of 2021 to 7% in Q1 2022, an impressive increase of five percentage points. In the same time frame, Netflix went from 34% to 27%. Peacock also saw the largest growth of subscription share than any other streaming service from the fourth quarter of 2021 to Q1 2022, rising by 2%.

Winning content

Comcast's acquisition of NBCUniversal in 2011 granted the company access to a library of content in a similar league to Disney's. Peacock has the potential to offer top-rated NBC sitcoms such as The Office, Parks and Recreation, and 30 Rock, as well as titles from Universal's library of films including fan-favorite franchises such as Jurassic Park, Fast & Furious, and Minions

The Universal sequel Minions: The Rise of Gru, released July 1, broke the box-office record for the biggest opening over a July 4th holiday weekend, bringing in $125 million domestically. Once the film hits streaming, Peacock will be able to use the movie to attract viewers.

NBC sitcoms have a history of pulling in big viewing hours for streaming platforms. In 2020, The Office racked up 57 billion streamed minutes from U.S. Netflix users and was the most-streamed series of the year. Although The Office had been a staple in Netflix's library for years, NBCUniversal paid $500 million in 2019 to pull the sitcom from the streaming giant and offer it on Peacock. In an effort to retain at least shared streaming rights to the workplace sitcom, Netflix offered NBC $90 million a year to stream the show but was ultimately denied. 

While Peacock competes in a market already crowded with streaming options, it has an excellent method for drawing in new users. Its free, ad-supported tier with partial access to the platform's library allows the company to draw in viewers without commitment. This strategy creates the chance that users will enjoy the service enough to want access to the entire library and move to a paid subscription. If not, Comcast can still generate ad revenue from its lowest-tiered users. 

What's next for Peacock?

Comcast groups Peacock into its media division, responsible for 19% of its business in 2021. It is the second-biggest portion of Comcast's business after cable communications with 53%. However, from Q1 2021 to Q1 2022, the division including Peacock gained 36.3% more revenue while cable communications' revenue rose by 4.6%. While the company does not break down exactly how much of its media sector Peacock claims, this time frame did coincide with the streamer doubling its revenue.

As Peacock continues to grow its share of the market, keen investors will want to keep an eye on Comcast's media division on a quarterly basis. If revenue continues to grow at its current rate, Peacock will become increasingly integral to Comcast's business.