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NBCUniversal jumps into the streaming fray

NBCUniversal said Monday its streaming service, to be launched next year, will be offered free to pay-TV customers of its parent company, Comcast Corp. (Associated Press)
NBCUniversal said Monday its streaming service, to be launched next year, will be offered free to pay-TV customers of its parent company, Comcast Corp. (Associated Press)
By Meg James Los Angeles Times

Joining the growing stampede into the streaming world, NBCUniversal on Monday said it would launch a streaming service next year – but one that will differ from rival services.

NBCUniversal is following Sony Corp., CBS Corp., Walt Disney Co. and AT&T’s WarnerMedia into streaming. Those companies have all offered or plan to offer their services for a monthly fee. By contrast, NBCUniversal said its service will be offered free to pay-TV customers of its parent company, Comcast Corp.

The new advertising-supported service will target Comcast’s more than 50 million subscribers worldwide. The Philadelphia-based cable giant has been expanding, and last fall acquired European satellite TV service Sky. The pricey $40 billion purchase gave Comcast a global presence – and a pressing need to find ways to keep its pay-TV customers paying monthly subscriptions.

Consumers will be able to subscribe to an ad-free version of NBCUniversal’s streaming service for a fee. Viewers in regions not served by Comcast also will be able to subscribe for a monthly charge.

NBCUniversal said its service would benefit a treasure trove of content and the vast reach of its owner.

“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,” NBCUniversal Chief Executive Steve Burke said in a statement.

More than a decade ago, NBCUniversal co-founded streaming service Hulu, which now boasts 25 million customers. But Comcast acquired NBCUniversal in 2011 and since then, the New York-based subsidiary has tip-toed into streaming efforts because it did not want to disrupt a major revenue source for its parent company – the monthly cable TV fees that Comcast collects. Like other distributors, Comcast has been grappling with cord-cutters who drop their pay-TV service for lower-cost streaming services.

Soon, Disney will assume the controlling stake in Hulu when the Burbank entertainment giant completes its $71.3-billion purchase of much of Rupert Murdoch’s 21st Century Fox. After that sale is complete, NBCUniversal will own just 30 percent of Hulu. Instead of spending millions of dollars helping Disney upgrade Hulu’s technology and stock the service with more original content, NBCUniversal has an incentive to strike out on its own with a service that could bolster the business of its parent company.

Streaming has become all the rage in the entertainment industry, and legacy providers are scrambling to compete with Netflix, which has upset the economics of traditional television. Endeavor on Monday announced it has formed a new streaming products and services division that will unify the media and talent company’s streaming technology capabilities for its clients, including the WWE and its streaming service WWE Network.

To prepare for the new service, NBCUniversal said it was streamlining its management.

Longtime cable television programmer Bonnie Hammer, who is known for her keen eye for marketing, will oversee the planned service. She was promoted to a newly created role chairing direct-to-consumer and digital enterprises. She will oversee a team that includes executives from Sky’s direct-to-consumer service called Now TV.

Los Angeles-based studio head Jeff Shell was named chairman of NBCUniversal Film and Entertainment. He will be in charge of the company’s West Coast businesses, including NBC Entertainment as well as NBCUniversal’s international division and Spanish-language Telemundo, which is based in South Florida.

Donna Langley was promoted to chair of the Universal Filmed Entertainment Group. Global theatrical distribution and home entertainment now is part of her purview. She will continue to report to Shell.

NBC Sports chief Mark Lazarus also saw his duties expand as he takes over NBC News and cable channels, including USA Network, Syfy, Bravo and E! that previously had been managed by Hammer.

Lazarus becomes chairman of NBCUniversal Broadcast, Cable, Sports and News. He will assume responsibility for most of the company’s East Coast-based content businesses, including the cable entertainment portfolio, NBC News, MSNBC and CNBC.

Lazarus will continue to oversee the NBC Sports Group as well as the nuts and bolts of the television business, including NBCUniversal Owned Television Stations and NBC Affiliate Relations.

Variety first reported on the reorganization.

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