By Shaun Lim
To cater to increasingly eclectic viewing behaviours, media companies have, over the last few years, offered an exponential number of content choices to keep up with streaming services such as Netflix and Disney+.
While there is little to suggest that the momentum of these subscription video-on-demand (SVoD) titans will be significantly derailed in the near future, will there come a time when the sheer number of choices become overwhelming and subscription fatigue sets in?
In such a scenario, what can more traditional media companies do to retain eyeballs? Offering free content while continuing to cater to the consumption habits of today’s viewers may be a good way to go, as demonstrated by the emergence of a new TV streaming format.
According to new research from Digital TV Research, global Free Advertising Supported Television (FAST) revenues for TV series and movies will reach US$17 billion in 2029, up from $8 billion in 2023.
The US will account for 38% to the 2029 total, down from 56% in 2023. Global FAST revenues are expected to increase by $9.4 billion between 2023 and 2029, with the US accruing $2.1 billion in additional revenues to reach $6.5 billion.
By 2029, the US will be the only country generating more than $1 billion in FAST revenues, with the UK and Canada the two countries expected to reach near to $1 billion in FAST revenues. These three countries will account for nearly half of the world’s total FAST revenues, while collectively, FAST revenues in the Asia-Pacific region will reach US$3.8 billion in 2029, up from US$1.3 billion in 2023.
What then, is driving the surge in FAST revenues?
“FAST is a good way of showcasing content in countries where people are reluctant to pay for subscriptions,” Simon Murray, Principal Analyst, Digital TV Research, told APB+.
“FAST is also a good way to promote archive content by genre or even by title. To contradict this, the US is the largest FAST market by some distance. No other country has seen cord-cutting to such a large degree in the US, where consumers were fed up with paying a lot for traditional pay-TV.
With FAST, broadcasters and media companies can offer easily discoverable content through a thematic channel – one that features Star Wars content for example – on an app that is already part of the Connected TV user interface. In the US, for instance, it is estimated that 95% of FAST content is viewed on Smart TVs.
While FAST is theoretically a video-on-demand (VoD) service, it also represents a throwback, with content presented in a linear format even if viewers can choose when they want to consume the content.
In terms of advertising, FAST differs from the advertising video-on-demand (AVoD) format increasingly being favoured by the likes of Netflix and Disney+. While some AVoD programmes allow consumers to skip commercials, this is not an option for FAST programmes.
On the flip side, advertisers can leverage on FAST to provide more targeted ads that cater to the specific interests of their target audience.
While Digital TV Research’s Murray expects robust growth for the global FAST market leading up to 2029, he also expects a fragmented market that will be dominated by three key players – Pluto TV, Roku Channel and Samsung TV Plus – who, between them, will account for nearly half the global FAST revenues by 2029.
Unlike the subscription video-on-demand (SVoD) market, globalisation will not happen in the FAST market as many local channels potentially emerge. Murray explained, “Advertising is much more localised than subscriptions. Each country has different advertisers and even if they overlap, the same companies run different campaigns for the same brand in different countries. Local companies are likely to benefit the most from FAST.”
This is not to suggest that other media companies will not eventually jump on the FAST bandwagon.
Kelly Day, Vice-President, International at Amazon Prime Video, recently outlined the SVoD operator’s intention to become a super-aggregator in the streaming world, focusing on delivering a very personalised and engaging experience that is also focused on localised content.
Speaking during a fireside conversation at APOS Bali 2023, which is created and curated by Media Partners Asia (MPA), Day said, “Our mission is to be a place where customers can find all their video entertainment under one roof, whether that is content produced by us or by other studios … it could be FAST channels, linear channels, AVoD channels that we have in many locales. We’re really trying to deliver the maximum selection possible.”
The potential boon that FAST can bring to traditional TV is also worth considering, although, in Murray’s opinion, FAST is unlikely to grow at a rate substantial enough to allow public broadcasters to compete financially with the likes of Netflix and Disney+.
“Although FAST will grow quickly, it will remain a fairly small part of the whole over-the-top (OTT) market,” he pointed out. “Public broadcasters will benefit from FAST as they can monetise archive content, and live content to a certain degree, when screened traditionally as well as on their FAST channels.
“However, FAST will never generate the kind of revenues that the likes of Netflix make.”
For broadcasters who are nevertheless keen to leverage on FAST as they seek new business models that will allow them to deliver compelling content to more viewers, Murray’s checklist to get started is a simple one. “Have a robust ad sales operation and a strong content library in place, and always prepare new content to refresh the channel,” he concluded.