FAST continues to grow in popularity, with SVOD forced to adapt. The influx of channels and services means the market will change considerably over the next year and beyond.
Our Future Look at FAST series highlights trends to be aware of when distributing content using FAST in 2023 and beyond. In this first instalment, we recap the current state of play and break down the general trends distributors need to plan for to ensure success.
Subsequent instalments will cover:
• A guide to future-proofing
- FAST still rises exponentially
Earlier this year, we suggested the time was ripe to move FAST or get left behind. Unsurprisingly we’ve seen the FAST boom continue in the intervening months.
The US continues to lead the way with FAST adoption, with Comcast reporting that 60% of US households now watch FAST channels. Europe and LATAM are tipped as up-and-coming FAST markets, with success in the US serving as a model abroad, where ad-tech and FAST adoption aren’t as established.
FAST and AVOD continue to overlap - most FAST providers also have AVOD catalogs - but the lean-back linearity of FAST appears to be attracting a rise in viewers. FAST is growing faster than AVOD: Kantar reports FAST is the fastest-growing streaming tier, with 4.9% quarter-on-quarter penetration growth in the US.
- Channel and service growth continue - with a crunch looming
FAST is currently so successful that there’s speculation (admittedly, there has been for years) that it could finally be catching up to broadcast TV in popularity.
There has been a move among TV manufacturers towards FAST platforms - including at Google, where talks are in progress about adding FAST channels to Google TVs. “Margins in TV sales are notoriously slim, and many set manufacturers are looking at the built-in FAST linear services to earn extra high-margin revenue,” explains Colin Dixon of nScreenMedia. He points to Vizio as an example: “the company earned almost four times as much from TV sales as Platform+ in Q1 2022. However, 90% of gross profit comes from Vizio’s Platform+ business, of which the WatchFree FAST linear service is a major contributor.”
In one sense, it’s great that FAST channels are taking off: distributors can reach new, untapped audiences via set-top TVs. However, the increase in FAST services comes alongside exponential growth in FAST channels. Taken together, the proliferation of new options points to an imminent fragmentation of the market.
213 channels were added across major platforms in the first half of 2022 alone – a growth rate of 17% (Variety). Tubi has announced plans for over 200 new live channels across live sports, entertainment, and news (Adweek) and new services are also making big plays. DistroTV, for example, “is adding 120 new FAST channels, marking 87% channel growth year over year,” for a total channel count of over 270 (Fierce Video). There’s only one way such a boom can end: what goes up must come down, and analysts agree that a crunch over the coming years is probable as platforms (in the US, at least) begin battling it out for a finite viewership.
- FAST platforms diversify in an attempt to secure viewers
With the issue of discoverability looming on the horizon, one emerging trend is a rise in brand partnerships and original content as FAST services attempt to differentiate their offerings to attract new viewers and gain a larger share of the market.
Among the most popular services, partnerships that a year or so ago would have seemed antithetical to the FAST revenue model have emerged. No longer is affordable legacy or niche content the default. Instead, services are savvily diversifying revenue models in a bid to outdo competitors.
In an economic downturn, studios are looking to maximize revenue by capitalizing on theatrical releases, owned channels premieres, and cheap onward distribution. This studio attention has been great news for FAST platforms. In April, Lionsgate penned a multi-year agreement with the Roku Channel to distribute theatrical releases on the FAST platform. The Roku Channel has jumped at the chance to create buzz and offer high-quality, recent content without paying first-premiere prices. It also has several new originals slated, including the Weird Al Yankovic movie starring Daniel Radcliffe (New York Times). After being acquired by Fox in 2020, Tubi recently announced plans to add over 100 new original titles to its service over the next year. And Paramount-owned PlutoTV is symbiotically funneling viewers to Paramount+ with popular original series such as 1883.
These partnerships emphasize the importance of the relationship between distributors and FAST platforms and point to the way each service is unwilling to rely on one go-to-market strategy. Naturally, these developments will impact the type of content licensed for distribution.
What do increased competition and exponential channel growth mean for content distribution?
The shifts in strategy among FAST big hitters highlight the rapid change occurring in the market. The competition for viewership and subsequent ad revenue is intensifying, and it’s now necessary to have a correspondingly strategic distribution plan to compete. Diversifying distribution options - whether by developing working relationships with FAST content curators or localizing content for less saturated markets - is the only way to ensure ongoing profitability and success.
Our Future Look at FAST series breaks down what’s happening in the world of FAST and how content distributors can adopt strategic changes to ensure success. It covers:
What the battle for discoverability means for content distributors
There are over 20 different FAST platforms in the US alone, and this figure has been rising year-on-year. There will soon be a crunch in revenue-making ability, and a split between popular ‘big hitters’ (household name FAST platforms) and providers speaking to the niche long tail is likely to occur.
As each service looks to distinguish its offering, market changes will have a significant knock-on effect on content distributors. By speaking to new requirements, distributors can improve the odds of licensing content.
How to diversify your content strategy for FAST success
To come out on top in a competitive market, distributors need a strategy with a high ROI. It’s important to weigh up the opportunities for viewership expansion offered by new territories with the existing states of advertising technology.
Our breakdown of diversification options looks at the viability of several different content forms and emerging markets, so distributors can establish a strategy that produces the best results.
How to future-proof your strategy for the next age of TV
Our final entry in the series provides tangible step-by-step actions for ensuring success when distributing content using a FAST model, whether now or in the future.