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NBCUniversal’s long-gestating plan to launch a streaming service is starting to take shape.
The media conglomerate on Monday announced that it is reorganizing its executive team to prepare for the 2020 launch of an ad-supported direct-to-consumer service, putting cable chief Bonnie Hammer in charge of streaming plans that would rival those in the works from Disney and WarnerMedia.
With Hammer set to become chairman of direct-to-consumer and digital enterprises, NBC Broadcasting and Sports chairman Mark Lazarus and Universal Filmed Entertainment Group chairman Jeff Shell are taking on expanded roles within the television operation. Lazarus will add cable and news to his purview, giving him responsibility over all East Coast-based content businesses including the cable entertainment portfolio, NBC News, MSNBC and CNBC. Shell, meanwhile, will take over NBC Entertainment, Telemundo and the broadcaster’s international operations while continuing to oversee the film division. Donna Langley, meanwhile, is becoming the sole chairman of Universal Filmed Entertainment Group and adds theatrical and home entertainment to her purview.
“NBCUniversal has some of the world’s most valuable intellectual property and top talent, both in front of and behind the camera,” NBCU CEO Steve Burke said in a statement announcing the news. “Many of the most-watched shows on today’s popular streaming platforms come from NBCUniversal. Our new service will be different than those presently in the market and it will be built on the company’s strengths, with NBCUniversal’s great content and the technology expertise, broad scale and the wide distribution of Comcast Cable and Sky.”
It has long been expected that Comcast-owned NBCUniversal would launch a stand-alone streaming service that would allow it to distribute its programming directly to consumers. Burke even teased that one was coming in his holiday greeting to staff, writing in a rhyming letter, “Maybe, just maybe, next year we will announce our plan for OTT.”
NBCU says the forthcoming streaming service will draw from its content library and offer up its film and television franchises as well as original programming and content from outside partners. It will be free for NBCU pay TV subscribers in the U.S. and abroad. Comcast Cable and Sky, which have a combined 52 million subscribers, will distribute the service in the U.S. and abroad, though NBCU also hopes to strike deals with other pay TV providers to offer it for free to their customers, too. An ad-free tier and a version of the service for non-pay TV customers will also be offered at a price in line with other subscription services like Netflix.
NBCU’s push into streaming has been complicated by its founding position in Hulu. NBCU owns 30 percent in the business, but is set to lose some influence when Disney’s acquisition of the Fox assets is complete and it becomes the 60 percent majority owner of Hulu. It is unclear how NBCU will navigate distributing programming to both its own offering and Hulu, where it has several exclusive licensing deals and three board members added in 2018 after a regulatory probation expired. It’s likely that NBCU could decide to sell its stake in Hulu and focus only on its new service.
A 2020 launch for NBCU’s streaming service will put it close behind Disney and WarnerMedia, which are both expected to unveil direct-to-consumer offerings at the end of 2019. The launch of three big services, not to mention a forthcoming offering from Apple, alongside streaming giants Netflix, Amazon Prime Video and Hulu will test just how much consumers want to pay for fragmented entertainment offerings versus a bundled service.
Meanwhile, the executive jostling signals that the 60-year-old Burke could be eyeing either Lazarus or Shell as potential successors. Both men have been given significantly larger pieces of the business ahead of Burke’s 2020 contract expiration. For her part, Hammer, who has led a vast cable empire that includes USA Network, Syfy, Bravo, Oxygen and E!, is being given oversight of an important slice of the NBCU business as it looks to adapt to changing consumer behaviors and the rising competition from the streaming video giants.
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