Pay-TV giant Comcast (CMCSA) is in advanced talks to buy Xumo, a free, advertising-supported streaming service, according to a report.
The move reflects two developments, The Wall Street Journal reported.
One is that Comcast’s NBC Universal division is developing its own streaming service, called Peacock. Xumo might provide technical and business support to Comcast's streaming efforts across Peacock and the parent's other divisions, people familiar with the matter told the Journal.
The other is that traditional pay-TV companies like Comcast are losing subscribers to streaming services, an effort called cord-cutting.
The Journal couldn’t determine a sale price Xumo might draw in the talks. And the people familiar with the matter told the paper that the talks between the sides were exclusive but still might break down.
Meredith, the operator of magazines and TV, is a holder in Xumo, the Journal reported.
Other companies that provide free, ad-supported streaming include Pluto TV, which ViacomCBS (VIACA) acquired in January, and Tubi TV.
Comcast has said Peacock would rely more on ads than subscriptions, the Journal reported. It quoted Chief Financial Officer Michael Cavanagh as saying that the opportunity in free, ad-supported streaming reflects the substantial number of subscription services available to consumers.
The Journal reported that Comcast is negotiating with other cable providers to offer Peacock free to pay-TV subscribers.
Comcast has said Peacock will start up in April.
CNBC reported in November that Comcast was considering making the ad-supported version of Peacock free to everyone. That would mark a change from its original plan to offer the service free only to cable subscribers and Comcast broadband customers, CNBC reported.
A version of Peacock without ads would be available for a cost, CNBC reported. Reports said Comcast is considering tiered-pricing plans as well.
Peacock is named for NBC’s famous logo. The service will offer original programming as well as hit shows like “The Office” and films from Universal Pictures, Dreamworks and others.
For the Hispanic community, Comcast said, Peacock will offer Spanish-language programming from Telemundo.