Future of Media: What is FAST (Free Ad-Supported TV)??

November 17, 2023

minute read

As we navigate the rapidly changing landscape of television, 2021’s ad-free prediction seems a distant memory. The past two years have witnessed an unexpected resurgence in ad-supported TV, breathing new life into the FASTs (Free Ad-Supported TV) and altering major SVOD (Subscription-supported Video-on-Demand) platforms’ strategies. But what’s driving this shift back to ad-favorability?

What Is FAST (Free Ad-Supported TV)?

The Rise and Popularity of FASTs

While many once believed that the world was moving towards a purely ad-free, subscription-based TV model, the reality is more nuanced. The digital capabilities of connected TV (CTV), which combines the sensory appeal of traditional TV with the precision of digital targeting, have given a fresh perspective on ads. It’s a harmonious blend where linear TV meets programmatic. The content-rich landscape means users are picky about what they pay for. Premium ad-supported videos thus play a crucial role for all – marketers, publishers, and viewers.

Fragmentation and escalating costs of subscription platforms have catalyzed this migration towards FAST. A Financial Times study found that accessing top streaming services now costs more monthly than traditional cable. FAST is poised to exploit these chinks in subscription-based streaming’s armor, with platforms like the Roku Channel, Pluto TV, and Tubi already edging out most top cable networks in viewership, as per Nielsen.

Why is this shift occurring? Consider the global average salary and the typical subscription costs. How many subscriptions does a family require to access all the flagship shows? The answer lies in consumer preferences: many now prefer to pay with their time and viewership rather than their limited income. This sets the stage for a new battleground among TV providers, one centered on capturing and retaining customer attention and loyalty.

Back to the Past or Simplicity and Comfort?

FAST channels emulate the structure of traditional cable bundles. Viewers are presented with a channel guide, scheduled programming, and even DVR functions. Popular FAST providers offer a variety of channels, from news and niche genres to dedicated channels for specific series. Unlike many platforms, FAST doesn’t bind viewers with monthly subscriptions. Most don’t even demand a subscription; you can simply turn on the TV and choose your content.

It’s not that viewers want the cumbersome cable bundles of the past. They yearn for simplicity. They desire a system where they can unwind after a long day, switch on their television, and indulge in quality content without the burdens of navigating a labyrinth of subscriptions.

Changing Landscape: 2023’s CTV Predictions

By 2023, AVODs (Ad-Supported platforms) and FASTs are projected to eclipse traditional subscription-based services. Heavyweights like Netflix and Disney+ are also dipping their toes into the ad-supported pool. A significant catalyst for this shift is the perceived value exchange between audiences and advertisers. Recent studies, such as Samsung Ads’ consumer survey, reveal a whopping 75% of users would prefer a free or cheaper streaming tier. Samsung’s 4Q 2022 data showed that AVOD’s popularity surpassed SVOD in terms of viewing time and growth. Such statistics only cement the idea that the ad-supported model is not just a phase but an evolving trend. A 2023 report by Samba TV highlighted that one-third of Americans regularly use a FAST provider. At the same time, traditional linear TV viewership has dipped below 50% for American households, as per Nielsen.

The Win-Win of Ad-Supported Content

The consensus seems clear: consumers appreciate ads if it means access to free premium content. But they want relevancy. Properly placed ads, which resonate with the content and the viewer, offer a win-win. Both content creators and advertisers need a streamlined way to share content signals, ensuring ads are relevant, measurable, and enjoyable. Here’s where content identifiers come in, allowing a better understanding of the viewer and delivering appropriate ads. The economic downturn further propels the ad-supported TV’s growth. With tightening budgets, consumers are more open to ad-supported services. Interestingly, the presence of ads doesn’t deter viewers. Research reveals that both ad-supported and ad-free viewership behaviors are strikingly similar, both in terms of content consumption and engagement.

Emotionally Resonant Ads

A point that shouldn’t be overlooked is the emotional impact of television ads. In the age of streaming, ads aren’t just interruptions; they can be powerful storytelling tools. When done right, they create lasting impressions, building strong connections between brands and viewers. Leveraging data responsibly ensures these ads resonate with viewers, enhancing the overall viewing experience.

Looking Ahead

The key for ad-supported TV’s continued growth lies in its adaptability and innovation. The industry needs to move towards being more “room-aware” – understanding the real context of the viewer. By knowing who’s watching, and tailoring content and ad suggestions accordingly, we can harness the true potential of ad-supported television.

In conclusion, the rebirth of ad-supported TV isn’t due to a single factor. It’s a mix of quality content, viewer fatigue from multiple subscriptions, the appeal of nostalgic shows, and shorter, more relevant ad breaks. The future looks bright for ad-supported TV, offering a seamless blend of entertainment and marketing, all without breaking the bank.

Given the trends, predictions point to FAST potentially overshadowing subscription models by 2030. The “great unsubscribe” phenomenon in 2022 was an early indicator. With viewers keen on allocating their finances more judiciously, FAST offers an attractive alternative.

For industry executives, a robust FAST proposition could address the burgeoning demand for free content. Plus, the revenues generated through ads might alleviate salary discrepancies, a contentious issue in recent times.

To speculate, the TV landscape of the future might merge on-demand content with scheduled programming via FAST. This metamorphosis isn’t distant; it’s on the horizon, likely materializing in the next 5-10 years.

Is your streaming service infrastructure ready for FAST and ad-supported services?

It’s paramount to assess your streaming service’s readiness for ad-supported streaming, particularly in the realm of FAST services. The FAST landscape requires extensive technological research and modernization to ensure a seamless viewer experience and to unlock revenue potential through targeted advertising.

To flourish in this dynamic environment, strategic partnerships with industry-leading technology providers and platforms are essential. Renowned solutions such as Flussonic Media Server, has firmly established itself as a reliable choice for ad-supported streaming.

These platforms offer a comprehensive suite of features including ad insertion, adaptive streaming, DRM integration, and robust analytics.

We’ve developed a checklist to assist you in evaluating your basic readiness for ad-supported streaming and to highlight how Flussonic Media Server can fortify your technical infrastructure in this rapidly evolving landscape.

FAST Fundamentals Checklist

Feature Description
Ad Insertion Functionality Ad Insertion Functionality Flussonic Media Server supports seamless ad insertion, allowing you to monetize your content effectively with targeted advertising.
Adaptive Bitrate Streaming Adaptive Bitrate Streaming Flussonic supports adaptive streaming protocols like HLS, DASH, and Smooth Streaming, ensuring smooth playback across various devices and network conditions.
Multi-CDN Support Multi-CDN Support Flussonic enables the use of multiple Content Delivery Networks (CDNs) for efficient content delivery and load balancing.
DRM Integration DRM Integration It offers robust DRM integration to protect your content and comply with content licensing agreements.
Live Streaming and DVR Live Streaming and DVR Flussonic allows for real-time live streaming as well as DVR (Digital Video Recording) functionality for time-shifted viewing.
Transcoding and Transmuxing Transcoding and Transmuxing The server can transcode and transmux media on-the-fly, optimizing content for different devices and bandwidths.
Content Protection Content Protection Flussonic offers security features like geo-blocking, token-based access control, and HTTPS streaming to protect your content and data.
Scalability Scalability It is highly scalable, making it suitable for both small-scale and large-scale FAST deployments.
Analytics and Monitoring Analytics and Monitoring Flussonic provides comprehensive analytics and monitoring tools to track viewer behavior, performance, and network health.
Mobile App Integration Mobile App Integration It supports integration with mobile apps, making it easy to deliver content to iOS and Android devices.
API and Integration API and Integration Flussonic offers a flexible API for custom integration and automation of various processes.

Go beyond fundamentals with Flussonic R&D Partnership

If your solution supports the fundamental functionalities from the checklist, congratulations, you have a solid foundation to begin with. However, we recognize that to truly stand out among the FAST services, you must go beyond the basics. Creating tailored content and experiences for your audience is key to keeping them glued to the TV screen, fostering a pleasant user experience, and delivering personalized content recommendations. We understand that this may require specific solutions, especially considering your country’s legislative requirements, such as video formats, content protection, subtitles, and more. While Flussonic Media Server may not currently support every feature you need, this should not deter you, nor should it be a showstopper.

At Flussonic, we embrace an R&D partnership approach, continually developing features under the R&D partnership umbrella. Notably, personalized SSAI (Server-Side Ad Insertion) has seen significant advancements through our partnership with a TV channel. So, if you’re considering launching a FAST service, we encourage you to pilot Flussonic Media Server. Should it not meet your requirements entirely or if you have specific needs, don’t hesitate to reach out to us. We are committed to helping you expand your business by delivering high-quality services, ensuring seamless content delivery across networks, supporting various content formats on all devices globally, and, most importantly, providing you with monetization capabilities.

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Author:
Pavel Kurinnoi
Chief Commercial Officer
Fueling the worldwide adoption of Flussonic's innovative product offerings

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