How FAST Got Big
Advertisers see the value in FAST and are leveraging these platforms as pathways into the CTV market
Five years ago, most of us wouldn’t have believed it if we had been told Netflix and the SVOD category would be facing an existential crisis in 2022, while linear programming was setting the near-future template for the streaming space.
But that’s precisely where we’re at. SVOD is down and FAST appears to be the future. DistroTV last month added 120 new channels (87 percent channel growth year over year), bringing its total up to 270 channels and putting its total channel offering on par with FAST leaders such as Pluto TV and Samsung TV Plus. AMC’s recent announcement of its plans to build six new FAST channels in 2022 is demonstrative of legacy broadcasters’ newfound interest in linear streaming. The market is locked in a “virtuous cycle,” according to nScreenMedia: U.S. FAST revenue is projected to leap from $2.1 billion in 2021 to $4.1 billion in 2023.
Taken together, these indicators make the impressive growth of FAST and its sudden takeover of the streaming space hard to deny. But it’s worth taking a moment to think about how the FAST market arrived here, which may give us some insights into where it’s headed.
The Roots of FAST
FAST platforms were first formed as streaming outlets for small, specific or digital-only media houses. The progenitor FAST platform, Pluto TV, overcame early and profound doubts about its viability to set a successful template that motivated new platforms and programmers to enter the space. Revry, Jukin Media and AFV, for example, turned to FAST channels to affordably expand beyond their existing business models and supplement their content distribution and revenue streams.
Overturning conventional knowledge, the ad-based linear streaming approach worked. At a time when SVOD services were thought to have reimagined how we consume our media, FAST took off because, as it turns out:
- Viewers love free and cheap entertainment options
- Linear formatting promotes discovery and retention
- Advertisers can leverage FAST channels to reach highly specific audiences
Those early stages of FAST acted as proof of concept for the model’s jump to the mainstream. Today, platforms such as Pluto TV, Roku, Samsung, and Tubi are no longer unfamiliar outliers in the streaming space, but are instead serious players whose practices are considered the next step in the evolution of digital entertainment. Terrestrial broadcasters and major content producers are turning to FAST as a lucrative and accessible distribution option. And, increasingly, advertisers see the value in FAST and are leveraging these platforms as pathways into the CTV market.
FAST as the future of streaming
What was the key to FAST’s emergence? The same element as its current and future growth: the exponential monetization of audiences. In the SVOD model, growth occurs only by increasing subscriptions. But FAST, because of its accessibility, affordable price point and lean-back interface for users, offers greater audience reach and provides a stickier experience. In turn, that attracts advertisers and opens the pipeline of a traditional revenue stream even wider.
The pivotal realization in the streaming space has been the understanding that FAST channels are capable of selling the attention of a captive audience. This may not strike anyone born during the golden era of terrestrial TV as a revelation, but it’s a critical reminder throughout an industry in which streaming had become equated with SVOD. The moral of the story: advertising still works. And with advanced data collection optimizing both ad targeting and the viewer experience, advertising is more effective than ever on AVOD and FAST channels.
SVOD was thought to be the future of streaming – a new, viewer-friendly model that delivers on-demand entertainment and all the content a user could hope to binge for a fixed subscription price. But SVOD has limitations that content providers have struggled to overcome: subscription-sharing, churn, fragmentation and market saturation. Moreover, the business model is finite in a way that AVOD and FAST aren’t constrained. Why limit the amount of revenue popular content can drive by tying it solely to a subscription?
AVOD and FAST aren’t likely to fully replace SVOD, which offers an alternative to linear programming and clearly has a place in the market. But ad-based streaming may be in the process of eclipsing the subscription model as we speak, as content creators, programmers, advertisers and viewers are all tuned into its benefits.
