FAST Channels are the topic du jour, and their popularity is expected to surge, bringing new opportunities for content producers. FAST (Free Ad-supported Streaming Television) channels are platforms that offer free streaming of TV shows, movies, and other content supported by advertisements
FAST Channel Revenues will Approach $13bn in 2028
Technology research and consulting firm Omdia anticipated on a recent report, on MIPBlog that FAST Channels will generate global revenue of $6.3bn in 2023 and will approach $13bn in 2028. The main reasons for FAST’s success are the general subscription fatigue, the expansion of broadband access and connected TV sales outside of the US, a bursting global inventory of content for sale, and a very low barrier of entry to both consumers and operators.
Seeing Omdia’s forecast, I wanted to dig a bit deeper into these predictions and therefore talked to industry expert Shaun Keeble, who is VP Digital at Banijay Rights, about how they are monetising FAST Channels and how they are seeing the future of FAST. Shaun oversees the global distributor’s digital self-publishing commercial activities and is responsible for all revenue share business models in the digital, social media, and FAST channel space, globally.
The US is at the Forefront of the FAST Business
Unsurprisingly, the US is the sector’s leading force, with FAST channels in the States expected to generate more than 80% of the global figure throughout the entirety of Omdia’s 2023 to 2027 forecast period. Shaun Keeble agrees, confirming that the majority of Banijay Rights’ business is currently driven by the US. One of the reasons for that is that FAST Channels are an affordable alternative, for both, cord-cutters (Millennials) and cord-nevers (Gen Z). In Europe, however, audiences already have a lot more freemium options available. Still, Banijay Rights expects markets like the UK, France, Germany, Canada, Australia, and Brazil to grow in the next few years.
Elsewhere, in Australia, Channel 10 already offers a range of FAST channels, and in Germany Joyn, a JV of ProSiebenSat.1 and Warner Bros. Discovery, is offering 16 FAST Channels covering selected genres, films, and series.
The other issue is that FAST Channels require a big pipeline of fresh content and that’s harder to do in small European territories where there isn’t as much content produced daily as in the US. At MIPTV in April, Guy Bisson Executive Director and Co-Founder at Ampere Analysis showed the anatomy of a FAST channel:
Banijay Rights has 22 unique FAST Channels syndicated across 123 different platforms. The majority of these are based on a single IP, such as Deal or No Deal or MasterChef. The remaining are genre-specific, for example its Scripted Drama Channel in Germany that launched recently or Horizons: Powered By Banijay which is dedicated to UK entertainment productions. Shaun Keeble recommends at least 150 hours of content to start a channel, but he predicts this number will rise to 300 hours as more channels enter the market. Which will be a great opportunity for global companies like Banijay Rights that has 172,000 hours of content available in its catalogue.
FAST Business Models
According to industry data, the most common business model for FAST Channels is ad revenue share. FAST channels typically generate revenue through advertising. As a content creator, you can partner with a FAST channel platform and share the ad revenue generated from your content. The platform will insert ads into your content, and you’ll receive a portion of the ad revenue based on factors like ad impressions and engagement. This is usually split 60/40 in favour of the channel provider, although this model was described as “outdated” by one executive at MIPCOM last year, and 55/45 or 50/50 splits are becoming more common.
Another model is inventory share. This means both the channel owner and platform operators sell ad space and split the profits.
Revenue-sharing is currently emerging as the predominant approach, with some obvious benefits for both channel owners and platforms. Roku and Pluto TV have both adopted this model, leveraging the efficiencies of the platforms’ sales force to deliver ad revenue—a skillset many IP owners lack. In both inventory and revenue share models, part of the ad revenue goes also to the technology partner.
Which model a content provider chooses depends on whether they have an ad sales team or not. Fremantle, for example, has one, Banijay doesn’t. Sometimes there can also be a blend of models which is described as “Backfill” where the platform operator sells ads, but any unsold inventory is sold by the channel owner.
Fixed license fees are rare and usually tied to exclusive rights whereas revenue share models are typically non-exclusive. Revenue-sharing also gives IP owners a look under the hood of the platforms’ analytics, which can reveal valuable information about how their content is being consumed. This stands in stark contrast to the traditional reluctance of streaming platforms to share deep analytics. And this data use is incredibly important for monetising FAST channels. Leveraging user data, video service providers can deliver targeted ads to viewers, which not only boosts revenues but also makes streaming experiences more relevant and engaging for viewers.
The Future is Mainstream and Personal
While FAST Channels are the hot topic at every TV conference right now, they haven’t reached mainstream status yet. Especially, platforms must create more market awareness, so audiences can find them, according to Shaun Keeble. Pluto, for example, had an article in the Radio Times explaining what Pluto TV is and how to watch the streaming service in the UK. Explaining FAST Channels to potential audiences is one thing, but making the Mad Men World leveraging this new TV business is the other. More advertising agencies should tap into the unused potential of the FAST business.
So, what’s the future of FAST Channels? According to Shaun Keeble, its “additional premium channels entering the space and personalisation of channel curation ensuring that the end user gets what they want to watch – that all important lean-back viewing experience that FAST channels offer. Of course, AI might play a big role in this.”
Find more about the current state of the FAST market – how the landscape is developing, assessing the types of channels, spotlighting distribution/owner activity, and profiling platforms in this report.
