This is a collaborative article by Serverside.ai and MediaMelon.
FAST is the ultimate hot topic in the media industry and lately, every player in the sector seems to talk about it; but what are FAST channels and why is it advisable for content owners (and not just TV-related ones) to invest in this new revenue source?
FAST is an acronym that stands for “free ad-supported streaming TV” services; so they are basically linear television channels offered to viewers not through terrestrial broadcasting, cable, or satellite, but via internet connection on CTVs (connected televisions), desktop computers, laptops, smartphones, tablets and, potentially, every connected device.
Nothing new, one may think, it is just the delivery system that is different, no comparison with Netflix’s subscription video-on-demand (SVOD) revolution. And yet, analysts indicate this new web television subsector as the most promising one in the next few years.
This seems to be reflected in the growing number of big companies investing in this new medium like Viacom, which acquired Pluto, the FAST market leader, in 2019, Fox, which purchased Tubi afterward, and NBCU, which launched Peacock. Not to mention Google, which is about to launch 50 free live television channels, according to the most recent industry reports.
There are multiple reasons behind the increasing interest in this new medium, but, together with the streaming intelligence company MediaMelon, we decided to point out 7 that appear to be the most relevant ones, to help you get the impact this innovation is having on the whole industry:
Let’s analyze these 7 points in depth to understand why and how publishers, but also other kinds of media companies, should implement FAST channels to diversify their media mix and revenue streams.
A growing market, far from saturation
According to nScreenMedia research, the US FAST market will reach $4.1 billion in 2023 with 216 million monthly active users; not bad, if we consider that Netflix had approximately 220.67 million subscribers worldwide in the second quarter of 2022! A similar growth, but at a much slower rate, is expected in other regions too, including Europe.
Whilst Bank of America analysts, led by Alexander Lin, stated that key streaming markets in the U.S. and EU have become too saturated for Netflix to continue its growth, and the same can be said of Amazon Prime Video, FAST channels initially showed up between 2016 and 2018, years later than most of the best known SVOD platforms.
This means that there is plenty of space and time for them to grow in terms of active platforms, which are about 22 in 2022, according to Variety’s report, number of channels and users, since most media consumers still have a vague idea about these new channels, especially in Europe.
An interesting fact about players within the FAST space is that, despite the low level of consumer awareness, none of them has gone bust yet, which is particularly interesting for newcomers willing to invest in the sector.
Also, the level of engagement is quite high among those that know and watch them because of their free nature, ease of use, and various types of content.
Lightweight infrastructure and low cost of implementation
Another important pro for media companies and other entities wanting to enter the FAST market is that the required technological infrastructure is very easy to set up and implement if you choose the right partners with the appropriate expertise.
FAST is linear television without the complex infrastructure of traditional TV channels since all the data is processed via the Internet.
Serverside.ai (Nowtilus) has teamed up with industry leaders Equativ and Red Bee Media to realize the most efficient FAST solution on the market. With our software and expertise, it is possible to create flexible linear streaming channels in moments, insert broadcast-quality personalized ads, and get tv shows in front of more viewers than ever before. The result? A new and easy way of monetizing content built and made operational in little time at reasonable costs.
A potentially limitless number of channels
The fact that FAST channels run over the internet has another important and disruptive effect: the number of potential channels is, for the first time in TV history, effectively limitless.
Forget about bandwidth issues: media companies won’t have to choose between an 80s sci-fi or a Scandinavian thriller thematic channel anymore, as it is enough space for them both.
But - be careful - quality is king and with the paradox of choice at some point, it will be difficult to enter these platforms when the amount of channels extends a certain threshold, so be sure to move quickly and don’t join the party too late!
A medium to make your inventory count
As a direct consequence of a limitless channel number, traditional TV enterprises, Hollywood majors, newspapers, and magazines, sports teams, VOD platforms, movie production companies, telcos, etc. can exploit their extensive inventories, giving a new life to their old niche content.
TV shows, movies, and television series that would probably not be picked in an SVOD environment can still have a chance to thrive on FAST channels thanks to this medium's immediacy and free nature.
No cost for the viewer, no churn rate
As we said, there is no cost for the audience like with traditional commercial television. In a world full of subscriptions and transactions like the OTT TV one, FAST doesn't generate the kind of buyer's remorse one may get by picking the wrong content to watch on a pay-per-view or SVOD service.
Plus, not all the viewers can afford to subscribe to multiple streaming platforms or to maintain their subscriptions for a long period of time, and this is where FAST channels come in: they offer different types of content for free like AVOD (advertising video on demand), with the difference that FAST does not require the effort of constantly choosing what to watch next, which can cause streaming fatigue.
Advanced insights and audience analytics
Since data with FAST technology travels via the internet, linear television channels can now have audience insights that are way more precise and accurate than the ones provided by traditional TV meters and measurement systems.
Information about audience demographics, behavior patterns, and devices can then be analyzed to take more aware editorial decisions.
This increased level of detail and visibility of performance on a client-by-client, network-by-network basis offers the context to make rapid, impactful choices that improve the general monetization strategy.
MediaMelon's analytics systems have been extended to work in a FAST environment too to provide channel owners with all the insights they need for their content choices and television schedule.
Extremely targeted ad insertion and high ad revenue
Thanks to MediaMelon’s accurate system of analytics and insights, FAST players can know their audience in-depth so they can provide the perfect environment for advertisers.
With the right partners on hand, ad insertion on FAST channels is dynamic and targeted at the household level or even the individual one. This web-enabled microtargeting potentially commands higher CPMs than the ones required for commercials on traditional television channels and this means a certain and rich source of revenue for the companies investing in the field.
Serverside.ai’s combination of world-class server-side ad insertion (SSAI) and advanced programmatic advertising allows customers to seamlessly monetize content without changing infrastructure, but this system also generates less consumer resistance towards the advertisements, which are perceived as more relevant to their tastes and needs.
So What’s Your Take on The Topic?
Is FAST just a fancy buzzword or actually the future of linear content distribution? We think it's the second one for many valid reasons. Get in touch with us now and discover our FAST offering. In case you’re keen to dive deeper into the analytics perspective of the topic, you can also reach out to the MediaMelon team here.
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