Comcast Corp. CFO Mike Cavanagh said the media conglomerate will invest $2 billion in aggregate to bolster the launch of its ad-supported video-on-demand service Peacock, aiming for the new service to break even within five years.
That level of investment — about 1% of Comcast's total revenues — is similar to what Comcast put into the launch of Xfinity Mobile, Cavanagh told analysts and investors at an industry event Dec. 9. The wireless service launched in 2017 via a mobile virtual network operator agreement between Comcast and Verizon Communications Inc. It is expected to break even in 2021.
Peacock is scheduled to launch in April 2020 with a mix of originals, exclusive acquisitions and other content. The $2 billion in funds will help to support content, marketing and infrastructure as the service gets up and running. The company plans to release more details about Peacock at a Jan. 16, 2020, investor day.
Cavanagh said Comcast's vast customer relationships — which total 55 million including the U.S. cable business and international Sky holdings — and unit NBCUniversal Media LLC's content portfolio and advertising sales team should ensure a quicker path to profitability with an ad-supported streaming model than the subscription model used by services such as Netflix Inc. Comcast's internal research indicates that 80% of consumers are interested in viewing premium fare embedded with a reasonable amount of ads as they look to access additional content while offsetting monthly video bills.