The FAST Opportunity: How to Keep Pace

Consumers can enjoy linear-like viewing experiences with a wide variety of content -- all supported by advertising and thus free of subscription fees. Programmers can expand the reach of their content at a low cost as they continuously work to be everywhere their viewers are.

And advertisers enjoy curated, brand-safe environments with cost-effective reach and targeting. FAST channels can offer more inventory, more affordable CPMs and even greater measurability than some traditional TV buys; they can be directly integrated into connected TV (CTV) user interfaces, enabling advertisers to target viewers by preferences and demographics. Add to that a wide variety of ad formats – such as attractively priced skippable and interactive ads, QR response codes, Split Screen, Dynamic Overlay and Product Spotlight among others.

At Viamedia, we’ve been gaining deeper insight to the FAST space from the programming piece of the equation.  We recently announced a partnership with global news streaming service News of the World; Viamedia will be the service’s exclusive programmatic ad sales rep firm.

It's little wonder that programmers have gravitated toward FAST. App-based distribution might give them total control over their inventory, but the process of expanding reach is time-consuming and expensive. FAST channels offer programmers an instant audience at a drastically lower cost, albeit with some compromises in control and monetization; major platform partners may control much if not all of the advertising relationships with a revenue share back to the programmers.

But issues over inventory control aside, the advertising revenue directed to FAST channels is growing, well…. fast.

U.S. FAST ad spending increased nearly fourfold between 2020 and 2023, per Statista data, and is projected to further double between 2023 and 2025 -- even surpassing that on cable, broadcast, and subscription video-on-demand (SVOD) services by year-end 2025.

But with that growth in ad revenue comes even more explosive growth in FAST outlets seeking slices of the audience and revenue pies.

As reported in Deadline, a new report on the sector has identified 1,943 unique FAST offerings. This represents growth of 13% from May 2023 and 47% from May 2022.

In 2023, Hulu was the leading U.S. streaming platform recipient of upfront ad spend, per Statista, followed by YouTube TV and NBC Universal’s Peacock. Among genres, movies and TV shows were popular with advertisers but news content led the way. As offerings have proliferated from content-heavy giants such as Disney and Warner Bros. Discovery (WBD), viewership of general entertainment content has grown.

Nevertheless, according to another recent report, in Variety, FAST platforms such as Tubi and the Roku Channel are now tying or surpassing high-profile, content-rich subscription streaming services like Disney+, WBD’s Max and Peacock and are approaching Hulu’s reach, per Nielsen’s monthly surveys of services’ viewing time.

True crime, perhaps not surprisingly, is a particular genre standout; some of the most popular channels (as measured by distribution) include Court TV, Forensic Files and Unsolved Mysteries.

This explosion in channels has produced somewhat of an audience-share arms race among traditional media companies and newer players.

This has not come without consequences. Many traditional media companies have been challenged, with some trimming their FAST ambitions, at least temporarily. Their channels may be enjoying significant success in getting traffic… but many are unable to command the ad revenue programmers deem necessary to justify production costs.

Of course, the bulk of digital advertising at the national level inexorably continues to trend to the Facebook/Google duopoly and the frankly commoditized programmatic marketplace.

In short, while FAST channel viewership has grown – so has the number of channels seeking to elbow their way onto viewers’ screens. And this poses a stark advertising – and thus monetization – challenge for FAST programmers and even distributors.

But there’s good news for programmers: While many of course allow ad sales for their channels to be handled entirely by distribution platforms, it is possible for the programmer to negotiate to pull their sales-rights back. While this may seem counterintuitive – why after all would a heavyweight distributor cede ad control? – the evolving nature of the technology and the marketplace is enabling win-win scenarios that can empower programmer and distributor alike to achieve a rising-tide rev-share outcome.

In fact, while the reality is that the FAST ad space is itself largely programmatic… for all programmatic’s putative efficiency, most FAST channels are filling only a fraction of their available ad slots.

With a truly informed and focused sales strategy, programmers and distributors alike may find that they’ve been leaving money on the table and have unrealized and untapped access to that much-desired advertising pool.

While there are a lot of moving pieces in this evolving monetization equation, a crucial component for programmers and distributors is mastery of the process, including all aspects of order management and reporting. And it includes regular, up-to-date and current touchpoints with, among others, two key constituents: local businesses who could be persuaded not to toss their advertising indiscriminately and non-strategically at brand-unsafe environments, and the very influential demand-side platforms (DSPs).

It also entails understanding the new tools-of-the-trade. For example, programmatic supply path optimization (SPO), as the designation suggests, can help buyers and advertisers find the most direct, cost-efficient path to inventory, while simultaneously reducing the number of exchanges they need to work with. Gone are the days of obtaining incremental reach by adding more resellers.

A more focused ad-operations strategy that helps programmers, distributors and buyers alike to navigate the newest industry rules and developments at every step can help produce the secret sauce that delivers a win-win-win in an increasingly competitive and complex yet potentially lucrative environment.

But to truly capitalize on this new paradigm, all parties should move…. fast.

Posted at MediaVillage through the Thought Leadership self-publishing platform.

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The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.org/MyersBizNet.