To help content owners/distributors find the best diversification strategy for their unique circumstances, Papercup has produced a breakdown of the global FAST market, diving into the considerations necessary for each region.
Future of Fast, Part 3, covers:
1. What to consider when creating a diversification strategy.
2. A breakdown of viewer demand, market saturation, and trends for EMEA, APAC, and LATAM (the regions predicted to see FAST success in the coming years).
3. How to localize content for international distribution.
Why diversification is necessary
North America leads the way on FAST service adoption, with US and Canadian consumers now using an average of almost 10 streaming services, one-third of them unpaid. With serious attention on FAST, content owners and distributors should be aware of the risk of putting all their eggs in one basket (i.e., focusing on one mode of streaming or focusing their FAST strategy on one market).
A diverse content strategy is important for success – especially as studios, distributors, and services increasingly merge in an attempt to do it all. When it comes to FAST, diversifying enables content owners/distributors to capitalize on a wealth of discoverability options. In the face of market saturation, failing to think outside the box risks diminishing returns.
Approaches to diversification
- Diversify content form and type: Consider both long and short-form content; Niche down to address an underserved demographic; invest in well-performing content (entertainment, movies, or sport).
- Diversify distribution: Introduce a shared-window approach; enter new territories; consider emerging markets; localize and dub.
Content owners and distributors who take content to new markets can capitalize on the opportunity to tap into a less saturated audience, reduce risk, and increase content ROI. Extending content reach to new markets with high CPMs and increasing viewership figures will enable companies to remain competitive through and beyond the current FAST boom.
Distributing content to new markets and audiences
With the likelihood of a US recession now at 80%, anticipate FAST becoming increasingly globalized in 2023 and beyond.
As content opportunities within the US become hypercompetitive and viewer figures begin to plateau (CTV adoption within North America is already almost 80%), the attention on emerging markets like EMEA, LATAM, and APAC will only increase. Introducing a content strategy for international territories now can put content owners/distributors ahead of the curve. But it’s important to be a first mover in new markets.
The opportunity to land in new territories as an early adopter and grow significant user bases and content recognition is one that household names and niche providers alike are snapping up. There’s only so long EMEA, LATAM and APAC will remain unsaturated.
Global opportunities for FAST distribution
In 2021, VideoWeek reported FAST had struggled to take off in Europe compared to North America. FAST services at the time put this slow start down to differences in linear broadcast prices: Navdeep Saini, co-founder and CEO of DistroScale, explained “Cable TV prices do not pose as much of a burden in Europe as they do in the U.S. market.”
Fast forward a year, and an ongoing cost of living crisis has sped up FAST adoption. In the UK, LG Ads Solutions found 12% of consumers surveyed added a free ad-supported CTV service during the last 12 months. As consumers look to cut costs wherever they can, Netflix and Disney+ pivot to flexible ad-supported tiers, and 23% of consumers have removed a subscription service from the household, it seems FASTs time in Europe has come.
While in the US Pluto TV, Tubi, and the Roku Channel are quickly becoming saturated, in Europe, FAST services are still concerned with acquiring enough content to populate 24/7 channels. While a great opportunity for content owners/distributors, it’s necessary to remain aware of expectations around locally-resonant content. Owners/distributors should also be aware that FAST platforms will frequently need to meet rules on original and local production percentages - both of which can complicate content distribution.
Carefully considering an EMEA content strategy could help owners/distributors win big - especially with niche or long-tail content.
“There is a lot of opportunity to bring diversified ad-supported content to this market. And the advertising world, both programmatic and direct, are also shifting dollars into these platforms, which helps to accelerate the growth.” – Stefan Van Engen, SVP of Content Programming and Partnerships at XUMO
LATAM continues to be a growth region for SVOD and FAST alike and is currently the second fastest-growing streaming market in the world (EP). LATAM countries generally have lower CPMs than the US and Europe, but the number and growth in viewers make it a worthwhile area to focus attention.
FAST services see the region as a potential boon as ad-supported content has always performed well in the region (AVOD is already well-established in LATAM). With a population that skews Millennial and Gen Z and a 103% rise in household internet connectivity over the last decade (Amagi), LATAM’s large and growing viewership has significant potential for monetization.
PlutoTV is already established in several LATAM countries, and, following success in Mexico, Tubi has announced plans to launch in Costa Rica, Ecuador, El Salvador, Guatemala, and Panama. Content owners and distributors looking to launch content on these big providers should move now before channel saturation occurs.
Tubi’s Spanish-language lineup is already looking like a good bet to mop up viewers: it includes big-hit feature movies like “The Social Network” and “American Psycho”, popular exports such as the TV series “Masters of Sex”, and content with local appeal such as telenovela “Señorita Pólvora” (Variety). Bold moves from big platforms could see LATAM moving in the same direction as the US quicker than expected – especially given the parallel plays SVOD services are making in an attempt to carve out space and hoover up a significant chunk of the market (EP).
The opportunity for niche content in LATAM
The LATAM market is versatile. Content targeted at viewers from the region also performs well for niche FAST providers – and this could be a great strategic move for content owners/distributors who plan ahead and acquire rights to cheaper, less accessible niche content.
Take DistroTV, an independent FAST platform that has steadily built a name for its niche content. While the independent FAST platform can’t boast the same premium content as Tubi or PlutoTV, it does a great job acquiring rights to content that resonates with specific audiences – content these audiences often can’t access elsewhere. For example, it’s now adding 21 Spanish-language channels in the US and to its DistroTV Español arm, aimed at Spanish-language audiences in the US and Latin America.
Much of the content on DistroTV would perform badly on larger, generic FAST platforms such as PlutoTV or Tubi. The independent platform’s focus on breaking up its content catalog into distinct, niche channels allows it to properly cater to underserved audiences (such as the large Spanish-speaking proportion of the US population). In turn, the platform can effectively monetize long-tail content that wouldn’t be discoverable elsewhere.
The savvy part of this strategy? US Latin American Spanish speakers have a high CPM. Catering to this underserved demographic means DistroTV benefits from reduced competition, higher demand, and great advertising revenue. A much better strategy than competing for viewers with the likes of Lionsgate+ on Roku or Paramount+ on PlutoTV with significantly fewer resources.
Businesses looking to acquire rights would do well to consider this model: as well as content that could be a big hit, think about what will perform well with specific, dedicated audiences and produce slow and steady revenue. Diversifying content distribution across several territories presents untold possibilities to engage in such strategic acquisition and distribution.
APAC is also seeing a significant boom in FAST demand, with a growth in viewing hours three times as high as that of the US and Europe. Smart TV ownership in the region is also up 25% and watch time figures are steadily increasing, too (GWI).
If looking to enter APAC, it’s best to carefully consider your target audience and where your content can speak to a specific niche. Take heed of Netflix’s woes in India and evaluate existing FAST services on offer and audience consumption preferences before going all-in.
Providers keen to address the APAC opportunity can do so by starting small – localizing a proportion of content and then testing it in a specific, strategically chosen market. Fremantle used Papercup’s AI dubbing technology to test its Got Talent content in the Arabic market. They were able to test content performance and capitalize on the popularity of entertainment content in the APAC region without committing upfront to a risky large-scale rollout.
How content owners/distributors can capitalize on international opportunities
To successfully diversify content strategy, owners/distributors will need to consider where there is the most appeal for their content and what demographics are being over or under-served in particular markets. They’ll also need to consider the language requirements and local production stipulations mandated by various countries. (This is particularly the case for distributors looking to sell into the European market).
As strategies increasingly focus on content discoverability, expect more specialization and an increase in offerings that appeal to specific, dedicated user groups. This is a great long-tail strategy content owners/distributors should begin to consider, especially when acquiring content. There are already moves in this direction from the likes of DistroTV and PrendeTV (a service launched in 2021 describing itself as the first FAST service for US Latinx audiences).