In recent years the streaming industry has witnessed a significant shift in viewer preferences, with free ad-supported streaming television (FAST) surging in popularity. According to a recent Omdia report, while subscription-based video-on-demand (SVOD) services are facing slowing growth, FAST channels are rapidly gaining traction. Industry leaders from GlobalM, Agile Content and Ateme weigh in on this trend, discussing its implications, its benefits and the future of streaming.
Over the past five years, the cost of OTT and streaming paid subscriptions has increased massively, and consumers are starting to notice. But what are the infrastructure and service delivery alternatives? FAST (free ad-supported streaming TV) is emerging as a model that brings benefits to both customers and content platforms: customers are happy to get live content for free with ads relevant to them, while content platforms benefit from increased monetisation.
In particular, as FAST channels tend to be more niche, CPM on advertising is often around twice as high as for a linear channel and studies show that the audience watches for a longer time. There are also innovative ways to make FAST channels more cost-effective, such as looking for a VOD-to-live solution that supports channel creation within the multi-bitrate domain or automating the content scheduling workflow.
Paul Calleja, CEO of GlobalM, attributes the rise of FAST channels to the increasing demand for adaptable, user-friendly content experiences. “The surging popularity of FAST is undoubtedly reshaping the streaming landscape, and we predict that this trend will continue to grow,” he says. “Providers are under increasing pressure to offer adaptable and user-friendly features such as on-demand and personalised content experiences, and FAST channels are a cost-effective and smart answer to this demand.”
Calleja also highlights the strategic shift in content distribution that accompanies this trend. “We see more companies investing in FAST TV and consequently realising that content distribution needs to change to software-defined video networks to meet the requirements of high-quality, low-latency or file-based video delivery over the internet.” This offers content providers greater flexibility, especially in live streaming, where multiple cloud options and open protocols enable last-minute deals with rights holders.
André Rosado, Chief Product Officer at Agile Content, points to the rising cost of OTT and streaming subscriptions as a key driver behind the shift to FAST channels. “The cost of OTT and streaming paid subscriptions has been increasing in recent years, so customer behaviour has started to change, also part of a larger generational shift,” he explains. “Audiences are moving towards FAST channels because they provide free and easily accessible content at a time when a huge amount of subscription platforms compete for viewers and consumer budget spends have already reached threshold limits.”
This shift is not just a temporary response to the economic pressures of recent years but reflects a deeper change in viewer habits. “Even though the recent global pandemic has helped with this growth, we only see this trend continuing,” says Rosado. “FAST brings benefits for both customers, who are happy to get live content for free with ads that are targeted for them, and for content owners, as they help increase monetisation.”
Ahmed Swidan, Director of Personalized TV at Ateme, observes: “Subscribers are experiencing SVOD fatigue due to the overwhelming number of services in each local market. This often leads them to subscribe, binge-watch a few shows, then cancel and move on to another service.”
This cycle of subscribing and cancelling has made it increasingly challenging for individual SVOD platforms to sustain growth. In contrast, FAST channels offer a more sustainable model by attracting cost-conscious viewers with free content.
“FAST channels, which are free, are gaining traction by attracting quality content,” explains Swidan. “For instance, sports content owners are effectively leveraging FAST channels in certain markets. This trend offers cost-conscious viewers an appealing alternative to watch their favourite content.”
The benefits of FAST
As the streaming industry evolves, the advantages of FAST are becoming increasingly evident. Calleja emphasises that it is a direct response to changing viewer preferences, offering a win-win opportunity for both consumers and content providers: “FAST TV is simply a response to the increasingly different viewing preferences of the audience. There is a growing consumer appetite for variety, while there are also consumers cancelling OTT subscriptions and looking for free ad-based alternatives, such as FAST channels.”
For content providers, investing in FAST channels is a way to capitalise on these changing preferences. Calleja points out that companies can benefit from scalable workflows and cloud-based content delivery networks, allowing greater flexibility and control across the delivery chain.
Rosado reiterates the potential of FAST channels to generate revenue, particularly beyond the traditional subscription model: “From a content offering perspective, they create an additional revenue stream and a path to monetise content owners’ inventory beyond the subscription model.” The ability to personalise and target individual consumers further enhances engagement, leading to higher CPM rates and valuable data collection for cross-selling opportunities.
Moreover, FAST channels offer a unique upselling opportunity, as it is often easier to convert viewers to subscription customers or upgrade them to premium content once they are already familiar with the content. “By employing TV platforms, nowadays it is much easier to set up and launch FAST channels, which turns it into a very cost-effective solution,” says Rosado.
Swidan highlights how FAST channels are revolutionising content distribution, enabling content owners to bypass traditional multichannel video programming distributors (MVPDs) and secure more favourable advertising revenue share deals: “FAST channels are poised to become a permanent fixture in the media landscape. They allow content owners to bypass traditional MVPD operators, who previously claimed a significant portion of advertising revenue.”
FAST forward to the future
Looking ahead, the consensus seems to be that FAST channels will become a permanent feature on the media landscape. Swidan claims that Ateme is committed to supporting this shift “by offering a comprehensive end-to-end FAST solution that addresses all aspects of generating and monetising FAST channels”
As the industry continues to adapt to the evolving demands of viewers, FAST channels offer a flexible, scalable and profitable solution for content providers. Whether through personalised content, targeted advertising or innovative distribution methods, FAST will play a crucial role in the future of streaming.
