Free ad-supported streaming television (FAST) is significantly disrupting traditional media consumption and advertising paradigms. In the U.S., FAST is expected to add 13.3 million new viewers in 2023, contributing to a total viewer base of 157.1 million. FAST offers audiences a wide array of free content without the necessity of account creation while simultaneously providing publishers with revenue streams through targeted advertising.
If you're looking to navigate this evolving landscape successfully, consider this article your ultimate guide to understanding and leveraging the power of FAST channels in the current media ecosystem.
What does FAST mean?
FAST stands for free ad-supported streaming television. As its name implies, this is a business model based on offering video programming for free to the viewer. What differentiates FAST from traditional TV is that FAST encompasses both linear channels and on-demand content. It falls under the FAST category if it's free to the viewer and monetized through ads.
Many often perceive FAST as only including linear television channels, but it's essential to note that FAST also includes Video On Demand (VOD). The defining feature here is not whether the content is linear or on-demand but whether it is free. This differentiates it from services like Hulu, which are subscription-based but include ads.
How FAST channels work
FAST channels offer viewers a mix of linear and on-demand programming at no cost, relying on advertising for monetization. Here's a breakdown of how these channels operate:
Content curation: The first step is gathering or creating content that will interest the target audience. This could be licensed third-party content or original programming. The key is offering a wide variety to ensure your channel appeals to a broad spectrum of viewers.
Scheduling and programming: Like traditional television, FAST channels require meticulous scheduling. The use of dayparting helps target specific demographics at different times. Advanced TV scheduling tools automate this process, allowing for efficient content delivery.
Ad integration: Ads are woven into the programming at specified intervals. The exact nature of these ads can range from traditional commercial breaks to shorter, more interactive forms of advertising. Some channels even offer programmatic advertising, where ads are targeted to individual users based on various metrics.
Distribution: The channel is made available on various FAST platforms. Unlike traditional TV, which requires a proprietary set-top box, FAST channels can be accessed via multiple consumer devices, including smart TVs, mobile phones and computers.
Analytics: Real-time data analytics tools track viewer behavior, helping channel owners understand what's working and what isn't. This data informs future programming decisions and can also be used to attract advertisers.
What are the features of FAST channels?
FAST channels come with several features that make them an attractive proposition for both viewers and content owners:
Cost-Effective: The most apparent benefit for viewers is that FAST channels are free. The ad-based model enables revenue generation for content owners without needing a large subscription base. Additionally, content owners can leverage many of the FAST platforms' built-in audiences, a point we will elaborate on below.
Accessibility: These channels are easily accessible across various devices, ranging from smart TVs to mobile devices, broadening the potential audience reach.
Variety: FAST channels often offer a wide array of content, from news and sports to movies and specialty shows. This broad selection helps keep audiences engaged.
User experience: FAST services prioritize user experience by offering high-definition streaming, low ad-load times and a user-friendly interface. They blend linear "lean back" content for users who prefer a programmed experience and on-demand programming for those who want to choose what they watch.
Targeted advertising: Advanced analytics allow for more precise ad targeting, making advertising slots on FAST channels increasingly valuable.
Dynamic content: With the ability to quickly swap out content, FAST channels can stay current and adapt to audience preferences much more swiftly than traditional TV channels. This flexibility also enables the creation of pop-up FAST channels centered around events, themes or promotions, offering yet another layer of dynamism.
Why should content distributors care about FAST?
Leveraging the power of FAST can serve as a strategic complement to existing video distribution channels for content creators. FAST opens up immediate reach and engagement opportunities owing to its built-in audiences. The relatively low barriers to entry—often offset by ad revenue—enable content distributors to diversify their portfolio, adding a valuable layer of flexibility to their overall distribution strategy.
Before exploring the advantages, let's quickly revisit the fundamental distinctions between FAST, AVOD and linear TV to better understand the significance of FAST.
What is the difference between FAST, AVOD and linear TV?
FAST and AVOD (Ad-Supported Video On Demand) both employ advertising to monetize content, but they differ fundamentally in their approach. FAST operates as a business model that delivers free content, encompassing linear channels and on-demand options. AVOD, conversely, is not a business model but a delivery method. It pertains to providing on-demand content monetized through advertising, which can be free or subscription-based. The key differentiator is that FAST exclusively offers free content, setting it apart as a distinct business model in contrast to AVOD's delivery methodology.
FAST and Linear TV both combine scheduled live programming with on-demand content, making their programming styles similar. However, there are distinct features that set them apart.
While both offer a mix of linear and on-demand content, how these services deliver the experience can differ. FAST services often employ sophisticated algorithms to curate linear channels around themes or viewer behaviors, thus giving it a more personalized touch.
From a financial standpoint, FAST opens doors for cord-cutters and CTV device users to access a wide range of FAST channel options on their devices. Consumers save as they no longer need to invest in antenna, modems and additional subscription services access to linear bundled PAY TV services.
Portability and convenience
FAST services have the edge in portability. They're typically accessible from various devices, including smartphones, tablets and laptops, allowing users to take their viewing experiences wherever they go. Linear TV is often restricted to set-top boxes and specific locations, thereby limiting mobility.
Why is FAST streaming important?
FAST streaming empowers content owners with many benefits, including:
Redefining consumer expectations
FAST services are redefining what consumers expect from a streaming platform. Combining the best of both worlds—scheduled programming and on-demand content—they create a hybrid model that suits various viewer preferences.
Democratization of content
FAST platforms make content accessible to a broader audience by eliminating financial barriers. They offer an avenue for content creators to reach audiences they might have yet to access through traditional channels.
The rise of FAST is pushing the entire industry to innovate. Whether creating new advertising models or improving content discovery algorithms, FAST services are continually evolving, pushing Linear TV and other streaming services to adapt and innovate.
FAST, connected devices and viewing times
According to recent data by Conviva, Smart TVs are quickly becoming the preferred medium for streaming, marking a 31.4% year-over-year increase in usage globally. FAST channels are primarily consumed on connected devices like Roku boxes, Samsung Smart TVs or Chromecast™ sticks, for reasons including:
While Smart TVs are on the rise, mobile phones are following closely with a 23.9% global increase in year-over-year viewing time. Connected TV devices saw a moderate 7.8% growth, driven by Asia and LATAM, indicating a shift in viewer preferences towards more integrated and convenient streaming options.
Ad loads and viewing time
Longer viewing times, irrespective of the device, are a boon for advertisers and content distributors. Many FAST platforms are further sweetening the deal by committing to a reduced ad load of around 8 to 10 minutes per hour, compared to traditional cable’s 10 to 16 minutes. This makes for a better viewing experience and fits well with the modern trends towards reduced advertising interruption, particularly on devices designed for convenience.
The decline in usage of desktops and gaming consoles for streaming (according to Coviva) demonstrates that consumers gravitate towards devices that offer the most streamlined and convenient viewing experiences. Original equipment manufacturers (OEMs) are capitalizing on this trend by providing more TVs with built-in streaming capabilities at competitive prices.
Overall, the dynamic landscape of device usage for streaming directly influences how FAST services are consumed, making it an essential factor for viewers and stakeholders in the industry.
The evolution of linear TV as an experience
Linear TV as a distribution medium is experiencing a renaissance, largely because of Free ad-supported streaming television (FAST).
FAST's impact on the viewer experience is especially noteworthy. Many operators are now prioritizing FAST channels in their user interface. For instance, some platforms feature FAST linear channels as the first option viewers see upon launching the app, effectively putting linear channels in a prominent position. This design choice mirrors the traditional cable TV experience, where a channel is already playing when you turn on the TV. Such instant access appeals to viewers looking for spontaneous entertainment without the burden of selection.
Companies like Pluto TV have gone further by offering an interface allowing viewers to channel-surf just like a traditional set-top box. A significant audience still relishes the unpredictability of discovering a show they weren't planning to watch. This implies that the viewer experience is not just about content but also about how it is delivered.
FAST channels are also fueling innovation in the realm of linear TV. With expansive and often niche content libraries, they are attracting audiences that traditional TV channels have been losing. This revitalization of the linear format leads viewers to blend Subscription Video-on-demand (SVOD) services with their preferred FAST channels, thereby diversifying their programming options.
The FAST Market
Let’s look at the types of FAST services available and some of the major players in the space.
Types of FAST services
Media company-owned FASTs
What they are: These are FAST services owned by large media conglomerates. They often include content that aligns with the parent company's broader portfolio. Examples: Peacock (owned by NBCUniversal) and Pluto TV (owned by Paramount Global).
- Strong content libraries backed by established media companies.
- Easier cross-promotion with other properties owned by the parent company.
- The ability to monetize old library content with little to no investment.
- Generally high production values and better audience targeting due to in-house analytics.
May prioritize content that aligns with the parent company's broader strategy, limiting variety.
Potentially higher ad loads to maximize revenue.
OEM (Original equipment manufacturer) FASTs
What they are: These are services that come pre-installed on hardware like smart TVs or set-top boxes. They are often designed to work seamlessly with a particular brand of hardware. Examples: Samsung TV Plus (available on Samsung TVs), LG TV and Vizio WatchFree (found on Vizio TVs).
OEM enables brands to identify audiences who saw or missed their TV spots and retarget them via mobile, tablet, desktop or OTT using ACR (automated content recognition)
- Limited to specific hardware, reducing the service's reach.
- Content selection can be more restricted compared to more open platforms.
What they are: These are stand-alone services that aren't tied to a larger media company or specific piece of hardware. Examples: Plex, Redbox Live TV.
- More flexibility in content acquisition and partnerships.
- Often more innovative in terms of features and user experience.
- May struggle with scale and revenue generation without a large parent company.
- Content libraries might be less extensive due to budget constraints.
Popular FAST services and possible audience reach
Samsung TV Plus
The ROKU Channel
Other Popular FAST Services
vMVPDs and their role in the FAST landscape
While Virtual multichannel video programming distributors (vMVPDs) like Hulu Live TV, Sling TV, YouTube TV, Philo and Frndly TV are not inherently FAST services, some have strategically introduced FAST options into their portfolios. For example, Sling TV offers FAST content as part of its lineup to maintain customer engagement, even during periods when users may have their subscriptions paused. This approach helps vMVPDs retain customer relationships by offering various content that can be accessed freely, serving as an additional touchpoint in the consumer's entertainment ecosystem.
Having got an overview of the market, now let’s dive into the monetization and technical aspects of FAST.
How does FAST advertising work?
FAST platforms make their revenue primarily through advertising. Unlike subscription models, where the revenue is generated upfront through subscriber fees, FAST relies on ads to monetize its content. Here's how it generally works:
Dynamic ad insertion
One of the key technologies enabling effective advertising on FAST channels is dynamic ad insertion (DAI). This technology allows for real-time insertion of ads targeted to the viewer based on geography, viewing history and demographics.
The formats can vary, but typical ones include pre-roll, mid-roll, post-roll and pause ads. There's also an increasing trend towards interactive and shoppable ads, which allow viewers to engage directly with the advertisement.
Most FAST platforms are adopting a reduced ad load strategy. They typically offer around 8 to 10 minutes of ads per hour, compared to traditional linear TV, which can run upwards of 16 minutes per hour. The reduced ad load aims to create a more viewer-friendly experience.
The value of ad insertion on FAST channels
Ad insertion in FAST channels delivers a multifaceted value proposition, encompassing both the advantages to advertisers and the impressive CPMs that channel originators can command.
FAST platforms gather extensive data on user behavior, enabling advertisers to execute highly targeted campaigns. This level of precision is superior to what traditional linear TV can offer, thereby making each ad slot more valuable.
The digital framework of FAST platforms supports real-time analytics. This allows advertisers to gauge their campaigns' performance across various metrics, such as click-through rates and conversion. This granularity in measurement results in a more calculable ROI.
Unlike the estimations in traditional cable channels, which hover between $10 and $25 per 1,000 impressions, FAST channels, with their dynamic and highly targeted ad insertions, can command CPMs ranging from $40 to $50. This translates to approximately $0.60 to $1 per hour of viewership. When you consider that the average person watches more than 5 hours of content daily, the revenue potential becomes evident.
Platforms like Pluto have already broken the $3 million a-day mark in ad revenue. Even Hulu, a significant player in the ad-supported content sphere, generates about $15 per month per subscriber in advertising, exceeding their premium, ad-free package rate of $11.99.
Cost-effectiveness and speed to market
Creating a FAST channel involves minimal to zero upfront capital investment since you can repurpose your existing content libraries and leverage cloud-based video delivery software. This ease and speed of deployment allow channel originators to start generating revenue quickly, often within days or weeks as opposed to months or years.
The comprehensive value of ad insertion on FAST channels thus arises from a blend of high targeting capabilities, measurable ROI, impressive CPMs and speed to market. It's a business model that's democratizing the advertising landscape and proving to be increasingly profitable for channel originators.
Are FAST channels profitable?
FAST channels have demonstrated remarkable potential for profitability, carving out their unique niche in the evolving media landscape. Several factors contribute to their revenue-generating prowess:
Scale and reach
One of the prime advantages of FAST channels is their ability to scale and reach a diverse audience rapidly. This broad reach translates into a large inventory of ad slots, thereby attracting advertisers looking for high-visibility opportunities. The result is a better yield for Cost Per Mille (CPM).
FAST channels employ a variety of monetization tactics beyond just advertisements. These may include syndication deals, revenue-sharing arrangements and brand partnerships, which can diversify income streams and mitigate risks.
The reduced ad load strategy employed by most FAST platforms has positively affected viewer retention. Lower ad fatigue means that viewers are likelier to stick around, making the channel more appealing to advertisers and creating a virtuous cycle of increased profitability.
The robust analytics offered by FAST platforms give channel operators keen insights into viewer behavior, enabling them to optimize content and advertising strategies for maximum revenue generation. These data analytics capabilities significantly contribute to a channel's profitability by improving targeting and enhancing user engagement.
The lean nature of launching and operating a FAST channel, which often involves minimal upfront costs and the ability to repurpose existing content, makes it a capital-efficient venture. Quick speed-to-market times and low operational costs yield a more immediate return on investment.
While the landscape is certainly competitive, those who navigate it skillfully will find that FAST channels offer a compelling pathway to profitability, driven by robust advertising revenues, diversified income streams and operational efficiencies. Maintaining agility with an eye on the future can help content distributors outpace the competition.
What is the future of FAST channels?
As the digital landscape undergoes rapid transformations, so too does the world of free ad-supported streaming television (FAST). Previously perceived as the underdog of the streaming ecosystem, FAST channels are now emerging as formidable players. Leveraging breakthroughs in artificial intelligence, data analytics and user experience design, these platforms are not just keeping pace with consumer demands but are also pioneering new formats and revenue models.
As we stand on the cusp of this evolution, several key trends promise to dictate the future trajectory of FAST channels, elevating them from secondary alternatives to becoming central to our daily entertainment and information diet.
The advertising evolution
Advertising on FAST channels is still finding its footing compared to traditional prime-time TV. However, this is expected to change as major streaming platforms like Netflix, Disney and HBO expand their ad businesses. As these platforms attract larger ad-supported audiences, the landscape will shift. Advertisers with substantial budgets may transition their investments to streaming.
AI and voice technology integration
Integration of AI and voice technology is another transformative trend for FAST channels. These technologies will enhance user experiences, enabling viewers to search for content, control playback and receive personalized recommendations based on their viewing history. This shift promises a more seamless and user-friendly experience, ultimately driving engagement.
New content formats
Emerging content formats will significantly influence the future of FAST channels. Short-form video content, popularized by platforms like TikTok and Instagram Reels, will continue to grow in prominence. Creators and broadcasters have the opportunity to produce 15 to 30-second ads tailored for FAST channels. These new formats will impact user engagement and create fresh opportunities for advertisers to experiment with different ad types suited to these platforms.
Generative AI and personalization
Generative AI can potentially revolutionize personalization in FAST channels. It can personalize everything from programming schedules to recommendations to ads. However, it must be applied judiciously to avoid overwhelming viewers. The challenge lies in striking the right balance between personalization and privacy, ensuring viewers find it helpful rather than intrusive.
Brand suitability and shoppable content
Generative AI might also address brand suitability concerns. It can identify a context within the content and determine whether it aligns with a brand's image. For instance, a restaurant chain may want to avoid airing ads during scenes involving stomach illnesses. AI can enable shoppable content, allowing viewers to interact with items within scenes, creating a seamless shopping experience.
In this dynamic landscape, gradual adoption is key, ensuring viewers, advertisers and content providers reap the benefits of a fast-evolving ecosystem. The future of FAST channels is poised to bring us closer to personalized, engaging and innovative content experiences.
Technology and considerations for launching a FAST channel
If your organization wants to delve into the growing FAST channel ecosystem, there are some core technology and business decisions you’ll need to make.
Advanced channel origination
The first thing you'll need to enter the FAST channel ecosystem is a robust channel origination platform. With our cloud-based VOS®360 Media SaaS, you can quickly deploy your channel without a large upfront capital investment and high broadcast quality. This platform is engineered to automate the transformation of your VOD assets into a 24/7 linear channel.
AI-enhanced automatic scheduling
One of our standout features is the integrated AI-based recommendation engine that allows for automatic playlist generation. This engine sorts and categorizes assets based on themes and targeted demographics while also optimizing for maximum ad inventory per hour. The AI-driven capabilities make the channel virtually self-sustaining, eliminating the need for manual oversight and dramatically reducing operational costs.
Flexible monetization strategies
Our technology suite also allows for real-time ad insertion capabilities, maximizing ROI. You can configure ad scheduling rules to automatically insert ad breaks, making the most out of your content while ensuring a seamless viewer experience.
Varied distribution choices
You can opt for distribution through established third-party platforms or go the in-house route. Both approaches come with their benefits and challenges, but our platform offers the flexibility to go either way, ensuring that you can adapt as your business evolves.
Intelligent ad inventory management
To fully monetize your FAST channel, managing your ad inventory strategically is key. Our solutions focus on optimizing your ad slots with best-of-breed ad tech partners, so you make the best revenue for each impression.
How do I set up a FAST channel?
Launching a FAST channel requires a multi-faceted approach that combines compelling content, strategic programming, advanced technology and effective distribution. Here's how you can go about it:
Planned content selection
Identify your target demographics and understand the content they crave. Once you've mapped out the genres and themes you want to explore, license third-party content or curate from your existing library. Make sure to offer at least 50-100 hours of programming per channel with a 25% monthly refresh to keep things fresh.
Leverage the expertise of specialists to create a programming schedule that is more than just a playlist. Use dayparting to segment your content, catering to various target audiences at different times of the day. Additionally, enhance viewer engagement by employing proven scheduling tactics such as lead-ins, lead-outs and hammocking.
Utilize TV scheduling tools to automate your programming. This includes setting up an end-to-end workflow encompassing aspects like encoding, metadata ingestion, overlay graphics and data analytics.
Get your channel on major FAST platforms by leveraging existing relationships with platforms and your technology vendor's networks. Scrutinize each platform’s editorial criteria and consumer needs to ensure your channel adds value.
Launch your FAST channel with confidence
The FAST market is rapidly growing, but it’s just getting started. With half a dozen major platforms, more than 500 unique channels and billions of dollars of ad revenue, it has been an attractive market segment for many players. By leveraging the value of your existing content library and with the help of a few strategic partners, it’s easy to get started in this space and launch your FAST channel to take part in that heft revenue opportunity.
Harmonic continues to bring advanced, flexible solutions to the market that give operators the power and confidence to grow their video business. You can ask us about FAST channels, video delivery and distribution or streaming services. Just let us know how we can help you.