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Issue 3: January 20, 2020

Comcast's NBCUniversal finally gave us details on its new Peacock streaming service. Confirming that there will be a free tier (but with limited content) has us wondering, though. With continued market fragmentation, could "free with ads" be the best new trend for streaming services from 2020 onward? Read on to find out more in this week's Stream Report.

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Streamer's Spotlight: Is a 'Free with Ads' Model the Next Big Thing in Streaming?

Most streaming services that have entered the market in the past few years have done so at prices that usually range from $4.99 to $12.99 per month. But as competition on the market increases and cord-cutters starting to grow weary of signing up for even more services, there's a chance new entrants will struggle to get a foothold. However, a "free with ads" pricing tier could be just what they need to get sign-ups from consumers tired of paying for services.

Who's Offering Free Streaming?

There are very few services on the market currently providing a free streaming tier. Hulu notably had a "free with ads" streaming tier with it first launched in 2010. The service eventually dropped the free tier, which morphed into Yahoo! View. As a result, Hulu is currently the only on-demand service of its caliber that had a truly on-demand option carrying high-tier and current-season content.

There are some outliers, of course. There's Sony's Crackle streaming service, and Tubi TV. Both are completely free and ad-supported. And while you'll find top-rated content there, you won't find current-season content there, and that's the rub. For most services carrying big-budget or current-season content, there's always a cost.

The fact that Comcast/NBCUniversal's new Peacock streaming service comes with a free tier is a bit of a welcome surprise.

The Start of a Trend?

The big question now is whether Peacock could be a trend of more free, ad-supported tiers. To note, this avenue is a gamble, but it could work for two reasons:

1.

Consumers are increasingly getting tired of paying for services.

This fact has been highlighted by several studies, which show consumers are

pretty stressed out

about the whole thing.

2.

A free tier could persuade consumers to upgrade to a paid tier.

Comcast may be banking on this idea. Most services offer at least a 7-day free trial, but if consumers can get a vast amount of the content---but not all of the content---for free, they may be inspired to go from free to paid to get some paid-subscriber exclusives. And they may feel less annoyed by it since they've already made the step to subscribe for the free option.

Wait and See Mode Now Active

We'll have to see what impact Peacock and its free tier have on the streaming market. If other services launch with ad-supported tiers, it will definitely indicate a market trend. And if successful, it could prompt some of the older, larger services that to launch cheaper or even free ad-supported tiers as well.

This Week's Streaming Guide

1. Star Trek: Picard Premieres this THURSDAY

Are you ready? The much-anticipated continuation of Jean-Luc Picard's story continues this week on CBS All Access. -

F

lixed

2. History Channel's Alien Conspiracies Continue this TUESDAY with Project Blue Book Season 2

Area 51's cover-up conspiracy continues this week on the History Channel. Watch the live stream at 10 PM TUESDAY. -

Flixed

News and Industry Developments

1. Comcast's Peacock is a Big Bet with Modest Expectations

Comcast has put a lot of money into Peacock, but its future success may be less than certain. -

Motley Fool

2. Netflix Is Having Its Best Quarter Ever

This, in spite of the fact that the company has an increasing amount of competition, especially from Disney+. -

Inc.