Peacock eliminating free tier for new users
By Michael P. Hill Article may include affiliate links
The change takes effect Jan. 30, 2023, and NBCU plans to continue offering the free option for existing users, at least for now.
When Peacock launched July 15, 2020, it touted its free level as a competitive advantage against other streamers.
At that time, free tiers were rare among streamers.
That said, the free plan never offered access to the full slate of Peacock programming; as of 2023 it had around 10,000 hours of content and users were forced to watch ads.
NBCU was a relative latecomer to the streaming game among major U.S. TV networks; with ABC parent Disney launching its Disney+ offering in 2019 and CBS All Access, now known as Paramount+, dating back to 2014.
Offering a free tier was seen as a way to build the brand and, hopefully, upsell consumers to buy paid plans.
At the end of 2022, Peacock reported 20 million paid subscribers, up from 9 million for the year before. However, it lost $2.5 billion on the streamer in 2022 and expects to lose $3 billion in 2023.
While streaming is a popular sector, it also often comes with massive marketing and customer acquisition costs, plus software development and network infrastructure investment.
However, the biggest expense for most streamers is the cost of developing and licensing content. Mainstream services can spend billions on content over the course of just a few years. Even repurposing existing content typically comes with costly upfront licensing fees plus additional royalty costs.
The business is further complicated by the challenge of keeping churn rates down and consumer frustration with the growing number of subscription services.
Peacock’s ad-supported mid-level plan is available for free to millions of Xfinity cable and broadband customers. NBCUniversal is owned by Comcast, which owns the Xfinity brand as well. Many streamers have similar deals with sister brands or through partnerships with mobile phone carriers and other services.