Just like its peers, The Walt Disney Co. and WarnerMedia, NBCUniversal faces a challenge, according to CEO Steve Burke.
“People are watching professionally produced content at higher levels than ever,” Burke said. “We’re just not monetizing it as well online as we should.”
Unlike Disney and AT&T-owned WarnerMedia, which are approaching this problem by building streaming platforms based on Netflix’s tried-and-true subscription video-on-demand model, NBCU is coming at things another way.
Its platform will be ad-supported and free to Comcast and Sky subscribers, more than 50 million combined customers.
“We think this approach has a much better chance to get scale quickly,” Burke said during Comcast’s fourth-quarter earnings call. “There’s nothing better than free for consumers, and we have enough product that consumers are currently viewing on other platforms online for free and charge [for] that we think putting it all together in one place very, very good technology, and then leveraging our relationship with Comcast Cable and Sky.”
Burke added: “We know there’s a huge demand for interactive digital advertising. In fact, we were constantly trying to find more ad inventory because advertisers want to be in very, very good, professionally produced content. So our idea to enter the business is to leverage Sky’s technology, it’s called NOW TV in Europe and also parts of what we’ve been doing at NBC and Comcast Cable.”
As for the technology backing the new platform, that is being leverage from Sky’s existing NOW TV platform, he said.
NBCU plans to make most of its TV and film content library available on the free service. The conglomerate will still license movies and shows to Netflix and Hulu, Burke said, making those decisions case by case.
Burke also noted that in the U.S., 80% of the households capable of receiving addressable advertising are multichannel TV subscribers. “We’ll have discussions with Charter and DirecTV and everybody around the world that’s a multichannel supplier,” he said.
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