Last Friday afternoon CNBC reported that NBCUniversal is “leaning toward” making the free, ad-supported version of Peacock, its upcoming streaming service, free, with everyone getting unrestricted access. This would be a change from restricting it to Comcast’s cable and broadband subscribers only, as originally intended. The ad-free version would still carry a fee.

Which direction Comcast decides to go will say a lot about whether it sees Peacock’s primary role as helping Comcast grow and defend its core cable/broadband business, or having NBCU become a bona fide competitor in the “streaming wars” developing with Netflix, Amazon, Disney, WarnerMedia, Apple, etc. How should Peacock’s value be optimized - by restricting access to serve the Comcast’s cable/broadband business, or to be guided by the market and help NBCU build Peacock into a large OTT business?

Comcast’s DNA would suggest it will maintain Peacock’s original, restricted approach. As a traditional pay-TV operator at heart, Comcast is rooted in the dual revenue stream model (subscriptions plus advertising) solely focused within its geographical footprint. Even as the Internet has broken down all analog era boundaries, Comcast Xfinity has steadfastly sought only to better serve individuals who live within its footprint.

It has also focused on requiring paying relationships with customers - video originally, but increasingly broadband, as an on-ramp to upselling additional services or including them as value add. The strategy has worked extremely well; broadband services are booming and video is holding up reasonably well, as cord-cutting ravages competitors like AT&T.

Allowing Peacock to roam free would be a departure from all this. Peacock would immediately become the highest profile free, ad-supported premium quality content service, eclipsing others like Tubi, Pluto, Xumo and the Roku Channel (YouTube isn’t a strictly premium quality service). Remember other high-quality services like CBS All Access and Hulu do charge $6/month, while also including ads.

Inevitably, unrestricted Peacock would be characterized by the media as helping cord-cutting. Getting free access to all the great Peacock programming (“Parks and Rec,” “The Office,” etc.) would be a fantastic bargain for viewers. Wall Street could punish Comcast, seeing unrestricted Peacock as a sign of both Comcast backing further away from subscription video (it has already moved from serving low-end customers prone to churn), and up the risk of further deflation of content monetization (adding to the aggressive pricing strategies of Disney+, Apple TV+ and HBO Max). Wall Street could also go the other way; when Disney announced details of Disney+ its stock rose substantially.

Given all this, it’s hard to believe Comcast will allow unrestricted free access to Peacock.  But restricted access would deny NBCU of large audiences and the rich video ad dollars that would result. It would also send a pretty clear signal that Comcast really sees all of Peacock’s valuable content mainly as a way to defend its pay-TV/broadband model, rather than seizing new online opportunities that others have capitalized on so well. Leveraging Peacock for advanced, targeted, connected-TV based advertising would be diminished.

There may be a middle ground here of giving ad-free Peacock away only to cable/broadband subs, while allowing non-subs to only gain access via a subscription ad-based or ad-free tier. One downside of this approach is that password sharing is an easy workaround, unless Peacock took the draconian step of only allowing in-home free viewing (so it could verify the IP address). I see this step as unlikely. Restricting free access only to its cable/broadband subscribers could also create significant PR issues. It's not hard to imagine rabid fans complaining some viewers get their well-loved shows for no extra cost, while others have to pay.

There are no easy answers here about how to treat Peacock. It promises to be another fascinating turn in how established media and pay-TV companies are navigating the OTT waters.