Subscriptions for streaming video services have attracted huge audiences in recent years, with many consumers signing up to multiple platforms on top of their Pay TV satellite or cable services. Consumers are, of course, only willing to sign up to a finite number of paid TV and video subscriptions, so the market is incredibly competitive. As consumers reach ‘subscription fatigue’, they’re looking to reduce the number of paid subscriptions they have so free channels are becoming particularly attractive. This is where the FAST content distribution model really comes into its own.
Free ad-supported streaming TV or ‘FAST’ as it is known, are services and channels that are essentially streamed live TV without a subscription. It differs from AVOD (ad-supported video on demand) because it is live TV instead of on demand.FAST channels and services are gaining popularity with several well-known platforms such as Roku Channel, Pluto and Peacock, already using this model. The FAST model is attractive not only to niche and small startups but also to mainstream media businesses. The growth in the FAST market is evident from the increase in advertising revenue over recent years. According to analysis conducted by Statista, the advertising revenue of FAST in the United States was $1.2 billion in 2020, is estimated as being $3.9 billion in 2022 and is predicted to increase to $6.1 billion in 2025.
As a business model, FAST aims to attract the audience with compelling video content and uses ads to monetize the content inventory. By making use of advertising revenue, FAST channels can be watched without the need for a paid subscription as with OTT services or cable and satellite TV.
As with any business model based on advertising revenue, it is vital to ensure ads are targeted. According to a five year long survey carried out by Sky, targeted advertising increased engagement with ads by a third. This increased engagement means that typically, targeted ads tend to bring back between 5 and 10 times higher revenue than non-targeted ads.
Some content owners and media businesses are also using FAST channels as a means to drive subscriptions to more premium paid content. Production houses and rights holders can use FAST channels as a way of monetizing archived content. This is particularly attractive because launching FAST channels is generally low cost so the model presents a good way to make money off existing content.
In a market that is both hugely competitive and dynamic, it is vital that content owners and broadcasters can quickly capitalise on their content when the timing is right. This is why the launching of FAST channels needs to be done without spending lots of time setting up complex infrastructure and workflows. FAST channels need high levels of flexibility. The competitive and fast changing nature of the market means that these ad-supported channels need to launch quickly, and are often new and experimental, meaning that channel owners generally are unsure of what the audience/revenue will be like before launch.
If audience numbers and advertising revenue are good, then it pays to launch other similar FAST channels or to launch existing channels onto more platforms quickly to maximise revenue. Equally, if the venture doesn’t pay off, the FAST channel or platform needs to be immediately scaled back or removed and investment shifted elsewhere.
This kind of agile business model can’t function when using hardware-based infrastructure because of its inflexible nature. A FAST channel or platform’s success relies on the playout infrastructure being highly flexible, affordable and simple to manage. SaaS (software as a service) cloud-based playout is all of those things so is the obvious choice for FAST success.
Unlike on demand channels like those on YouTube, FAST channels use a traditional linear playout model, therefore a scheduling system is required. However, it’s critical to choose the right system that not only meets the scheduling requirements associated with channel management, but that also meets the requirements for successful FAST channels, those being simplicity, affordability, and adaptability.
Veset’s SaaS cloud playout platform offers flexible, economical scheduling and playout that allows FAST channels to be launched and managed quickly and easily.
Veset is exhibiting at IBC in Amsterdam from September 9th – 12th and would love to talk to you and answer any questions you may have. Arrange a meeting with us to learn how to schedule, distribute, and monetise FAST channels.
