Comcast cable TV customers can expect to pay more for their service in 2020 as the company shifts its focus to its new NBC Peacock streaming service. Over the last couple of years, Comcast has seen a major decline in its cable TV subscribers and now the company looks set to fully embrace the world of streaming, albeit at the cost of existing cable customers.
Comcast and NBC announced the Peacock streaming service last year, although pricing was only recently confirmed. Essentially, Peacock will be available in three tiers: free, paid with ads, and paid ad-free. This three-way pricing structure allows the company to appeal to all segments of the cord cutting market equally. The downside for non-cord cutters is that Comcast will look to offset some of the costs by charging cable subscribers even more via hidden fees.
Comcast lost 149,000 pay-TV customers during the fourth quarter. That’s not the worst quarterly decline the company’s TV business has experienced, but it is seeing similar declines every quarter for the last three years. The trend from Comcast’s perspective is clear. That’s partly why it's now preparing to launch the new Peacock streaming service. It is also partly why Comcast plans to charge cable companies more as it looks to recoup as much as it can from the side of the business that’s clearly struggling. Needless to say, price increases are not exactly the best way to ask customers to stay – but that’s the point. Comcast is now transitioning to streaming and accepts it will continue to lose cable TV customers each quarter going forward. So much so that Comcast is now helping people to cut the cord instead of fighting to keep them with cable.
It’s Not All Bad New For Comcast Cable Customers
While a price rise is not good news, it is not a price rise in isolation. Comcast doesn’t just want to push more people to streaming, but ideally wants them to migrate to Peacock. As a result, Comcast is giving many of its TV customers free access to Peacock. Technically, the Peacock streaming service won’t launch in the U.S. until July, 2020. However, Xfinity X1 and Flex customers will be able to stream Peacock starting in April. In addition, those customers won’t have to pay for the service either as the premium plan will be provided free of charge. This is the ad-supported version of the premium plan with Xfinity X1. Flex customers will be able to upgrade to the ad-free version for $5 per month – half the price non-Comcast customers will have to pay when the service launches later in the year.
Although it seems like a strange move for Comcast to financially motivate customers to cut the cord, it is in Comcast’s benefit in the long-term. If the new Peacock service can generate significant subscriber numbers, then it becomes attractive to advertisers and the revenue they bring. Likewise, Comcast has the added benefit of being an internet provider – this is one of the areas where it saw an uptick in customers during the last quarter. With more people streaming, internet connection and stream quality is even more important, and that’s good news for Comcast’s broadband business. Comcast’s price rises will inevitably lead to more people saying goodbye to cable TV, but far too many were already saying goodbye for Comcast’s liking.