By Georg Lenzen, VP, Products, LTN
Free ad-supported streaming TV (FAST) has been at the centre of countless customer conversations and trade show discussions in recent years, partly due to its growing popularity as a viewing option — also because of the business challenges content owners are up against to generate real ROI from FAST channel distribution. Kantar Media research found that 47% of U.S. households were using FAST services each week in Q3 2023, a significant increase from 24% in 2022. Powered by the widespread adoption of connected TV (CTV) devices with built-in FAST services and viewer curiosity for free easy-to-access content, FAST is gaining a foothold in the household streaming mix.
With the total number of FAST channels in the U.S. approaching 2,000, according to recent FASTMaster research, industry experts are debating whether we’re reaching market saturation. With a flurry of new channel launches and portfolio additions, it’s easy to question if the core value proposition of FAST as the ultimate lean-back, easy-to-use viewing option is at stake if consumers are overwhelmed with content. After all, that’s precisely the reason many viewers will have looked to FAST in the first place after becoming frustrated with subscription fatigue and content discovery headaches.
While content distributors are prioritizing their FAST efforts on a select number of revenue-generating channels, FAST channel distribution is becoming an increasingly selective process. So, is it still worth getting into FAST? Yes, absolutely. There are, however, a few things to note to help media companies uplevel their FAST strategies to cost-efficiently deliver channels that really move the needle.
Show me the revenue: Why FAST channel distribution is no longer just an experimentation game
A large challenge most media companies face today is finding ways to quickly and cost-effectively create, deliver, and monetize new digital linear channels or new flavours of existing channels without significant increases in headcount or investment in new technology infrastructure. Businesses can’t afford to allocate the same amount of staffing or budget to new digital channels compared with their existing linear channels. That’s a non-starter. Rapidly changing market conditions, coupled with the need to deliver a return on investment, make it essential for broadcasters to manage their resources strategically while also seeing genuine returns on new digital products.
Media organizations need to navigate a crowded market where simply experimenting with digital linear channels isn’t enough. With boardroom and investor pressures mounting, content owners are pushing to demonstrate genuine revenue generation across all their offerings, both traditional and digital. Technology decisions are usually either made based on revenue potential, or cost savings — increasingly, they need to be a mix of the two.
Unsophisticated ad workflows are restricting growth
The revenue potential of FAST channel distribution is being limited by ad workflows and siloed channel creation processes. Targeted advertising is crucial, yet many lower performing channels struggle with repetitive ads and poor engagement due to unsophisticated ad systems.
Channel operators must overcome technical barriers in ad insertion with advanced systems that offer frequency capping and nuanced targeting. By adopting an IP-based approach, they can leverage automation and intelligent metadata and SCTE insertion for custom ad profiling and personalization, even in live content scenarios, thereby driving better viewer engagement and higher revenue.
Automated playout solutions are also helping content owners to be more efficient and deliver more engaging programming on FAST. Particularly innovative playout solutions allow media companies to distribute linear channels and automatically spin up additional, tailored streams for FAST without increasing operational costs. This means easily delivering high-value live content, such as local news or sports, on FAST platforms. The integration of live and on-demand programming into FAST channels is also becoming increasingly feasible, allowing for more dynamic viewing experiences and boosting ad value.
Bringing live and local to FAST channels
For bolder players, FAST represents more than just an additional outlet for archived content. It offers an opportunity to deliver fresh, live, and local content that can drive significant audience growth and revenue. While pre-recorded, fan-favourite, and niche programming has its place in the FAST mix, it’s the integration of live content that can truly set FAST channels apart.
Live and localized events — such as local sports, news, and regional programming — are particularly effective for drawing in viewers and increasing ad revenue. The ability to tailor content to specific geographic regions and deliver highly relevant programming gives viewers a compelling reason to tune in. For example, we’ve worked with a major U.S. broadcaster to serve growing digital audiences with several always-on streaming channels for live and localized news across national markets. In Europe, streamers like DAZN continue to innovate with specialized sports betting channels for digital and FAST services powered by agile channel versioning and playout tools that empower live experiences on FAST channels.
Advancements in IP-powered playout automation and channel versioning technology enable media companies to easily bring high-value live content to FAST platforms, offering viewers something different — and creating more compelling ad propositions and targeting capabilities. Forward-thinking players are putting thought into their FAST channel distribution strategies and making FAST deliver on its promise.
