Kapang disrupts FAST business models with a hybrid broadcast approach

Free ad-funded Streaming Television, commonly known as FAST, has evolved over the past few years. Platforms such as Pluto and Redbox generate millions of dollars in ad revenues and archive content owners some much-needed cash from their video libraries.  

Today, FAST Channels and Linear Streaming TV are not valued as a replacement for cable packages. These services also fail to meet the content-grade expectations of subscription services.    

View TV has relaunched its Kapang service with a business model that supports existing broadcasters’ business models and costs. It also provides critical services such as DMA channel listings, addressable advertising, and consistent viewing across all platforms. 

A channel can be launched on Kapang within several days without software development fees, third-party supplier contracts, or hardware, providing a 300% revenue yield compared to other FAST and OTT platforms available today.

How do we align Streaming TV & FAST with traditional broadcaster brands?

The problem with Streaming TV and FAST is not related to technical scalability or internet quality; Netflix and Disney+ have proven the delivery with their existing services delivering to >100m households daily.  The issues for traditional broadcasters transforming to Streaming TV are primarily related to the business models and the complex barriers to entry on third-party platforms.

Traditionally, a cable/satellite channel would be distributed to platforms. They would typically pay to build the channel, be paid a minimum revenue, a split of the subscription revenues, or earn a high percentage, if not all, of the ad break revenues based on Nielsen data from the viewing habits of a  40,000-sample size of the 120 million homes across the USA.

The channel would receive more than 75% viewer ad & subscription dollars, totalling millions of pounds per week used to pay employees, technology, and offices, payback and reinvest in premium, innovative content to retain and grow audiences. 

Can Streaming TV and FAST deliver broadcaster revenue models?

Any Streaming Broadcaster, “The Channel” manages five key stakeholders to create, deliver and monetise a channel consisting of brand specific,

  1. The Technology Partner:                     e.g., View TV, Amagi, Wurl, AWS
  • The Consumer Platform:                     e.g., Samsung Plus, Pluto TV & Kapang etc
  • The Ad Agency/Advertiser:                 e.g., Coca-Cola, Ford, McDonald’s etc
  • The Content Owner/Producer:          e.g., Create In-house, commission or acquire
  • Branding & Marketing Agency,          e.g., Google Ads to Clear Channel

The correct mix of spend and costs across the five stakeholders will grow and retain channel audiences across platforms, monetising via subscription, advertising revenues or a hybrid of both.

Currently, the model across most FAST and Streaming TV Platforms delivers less than 20% of every advertiser dollar back to the broadcaster, one-third of the revenue compared to the traditional model. 

The low earnings are directly related to high revenue shares by each digital stakeholder and fees demanded across Platforms and Technology suppliers. The other stakeholders require the same budgets as before, as their role has remained the same, making the transition financially unviable.

The lack of branded broadcasters across FAST & Streaming TV platforms has also failed to drive many audiences to cut the cord on linear television services.  The audiences want the core channel line-up with an extended line-up of niche and vertical content channels and supporting AVOD and SVOD content libraries.

Live sports and premium content brands such as Show Time and HBO have the highest mountain to climb to justify their model on Streaming TV platforms, and the majority have opted to produce an in-house service to skip the madness of the FAST & Subscription revenues shares.  

The menagerie of apps across broadcasters has resulted in users having to download an app per channel without everything being on a single EPG line-up via a single service.  A single service would provide ease of use for consumers and efficiencies across all broadcasters.

How does FAST exist now?

Many FAST platforms and FAST channel broadcasters spotted an opportunity to rebroadcast archived videos and social media content across various platforms generating additional money from a previously justified content production or acquisition.   

This approach allows the FAST Broadcasters to generate extra cash, $100k – $1m/annum, which is a bonus to their original deals, which already justified the content spend.  Other services produce low-budget content with a similar approach to YouTube creators or social media influencers who have <1% of the costs and overheads of the traditional broadcast.

Consumers have been enjoying FAST delivering nostalgic content for general viewing. Still, they need to see it as a viable option to replace their HBO-grade services; therefore, a tiny percentage engage regularly with existing FAST services compared to traditional platforms.

.. but YouTube Creators are making fantastic money on AVOD services

The YouTube creator world has exploded.   Google purchased YouTube for more than $1.6 billion and has grown to a platform delivering 1b global viewing hours per day, with one of its top creators, Mr Beast, valuing his single channel at $1.1 billion.

With more than 50m YouTube channels on offer across the platform and 60 hours of content being uploaded every minute, getting to the top of the search results is a scientific and costly process which surpasses the effort and cost of SEO on google or getting to the top of an app store.

Mr Beast stated that he spends an average of $650k per video, with more than $10k spent solely on each video preview picture supported by an extensive full-time social media team informing fans across the platforms. Still, one of his primary revenue streams is video sponsorship, not AVOD advertising, and he uses video sponsorship as 100% justification for creating the content.

At $9.5cpm on the best YouTube Creator videos, that is less than half of the advertising-based revenues that can be generated using FAST & Streaming TV.

The average television series can cost between $500k and $10m per episode, with The Crown on Netflix commanding the highest spend.  The Crown would require more than one billion views per episode on YouTube to be profitable, a tall order, whilst Youtube would make an unfair $8m per episode for delivering the tech.

Youtube is a powerful platform for influencers and niche content production businesses because it is free to use via a revenue share model. Still, as primary content providers, broadcasters require a structured environment with maximum returns. YouTube needs to be fairer and tighter for corporates looking to control their brand and maximise the returns on their innovative content creations, but they do not have to and will not change.

What is the FAST & Streaming TV solution for Broadcasters?

View TV, an original content creator and now a multi-channel broadcaster, could not see how quality Live News, Live Sports and Premium Content channels would be commercially justified on FAST platforms, so it ironically decided to build its virtual cable platform, Broadcaster YouTube, Kapang.

Kapang works using the same principle as cable and satellite services with set-top boxes mixed with the cross-platform ease of use of YouTube. Consumers can download the Virtual set-top apps across PCs, Laptops, Mobile Phones, and Tablet PCs or directly downloadable onto a Smart TV.  The service delivers FAST monetised linear television, premium subscriber channels,  ad-funded on-demand video and premium subscription or pay-per-view live events.    

The team at View TV spent time reviewing the business model required for channel owners to engage and appreciate Kapang.   View TV was focused on providing a fair and sustainable revenue model, closely replicating the returns and features broadcasters have used via traditional distribution models whilst supporting minimal change to their business.

How does Kapang solve the problems?

View TV via Kapang solves many problems for traditional free-to-air broadcasters migrating their business to FAST and Streaming TV without reinventing their existing business model, adding additional benefits through reporting and interactivity, and requiring minimal change within their operations teams.

Most existing broadcasters can be on Kapang quickly by placing an additional distribution encoder in their broadcast centre and sending 50mbps resilient feeds back to Kapang central or via multi-feed SRT for digitally enabled businesses. 

Once the feed is on the network with Kapang, “BroadcastCDN”, all the monitoring, distribution, ad-trading, and ad insertion is carried out using their single managed team, which charges the entire service on an OPEX-based SaaS model for minimal risk and zero capital expense.

Channel operators receive 100% of the advertising revenues

All channel operators keep 100% of the channel revenues from the Kapang Connected TV Ad Marketplace, with Kapang simply charging Opex fees for delivering the channel, advertising, and platform services.    This was a crucial part of the content sustainability that was required by the project to align traditional broadcasters and premium content creators with Streaming TV & FAST.

The technical fees from Kapang are based on usage, and this depends on ad break frequencies and channel video quality. Still, the optimal model provides more than 70% gross profit and generates >$0.50/hour watched, three times higher than other platforms and five times higher than YouTube.

With Kapang, channels do not need to run app teams, market independent apps or understand CDN delivery; they all hand off precisely the same way they always have via a distribution encoder.

Target Audience Figures:

UK Households =            27m x 90 hours per month = 29.1b hours/annum = $12.2b/year

USA Households =          121m x 91 hours per month = 132.1b hours/annum = $55.5b/year

What are the limitations of Kapang?

Kapang is a hybrid Cable and IPTV solution which provides a FAST and cost-effective solution to broadcasters of all sizes. This is accomplished via a SaaS-based Opex model, channels pay on success with a zero CAPEX model, yet all channels are regulated and controlled for a maximised viewing experience. The solution provides a cross-channel campaign environment for advertisers and an efficient delivery solution for channels that can go live within several days, watched by thousands of existing users.

The subscription and pay-per-view event business models all provide a click-and-delivery solution to allow any broadcaster to deliver services at the speed of social media platforms, are comfortable with the compliance of cable service, receive maximum returns on content investments and can invest more energy in entertaining audiences.

Kapang has key partners for playout, encoding and distribution, enabling channels to feature on other OTT and FAST platforms with the same secure revenue model with no additional fees.

View TV has implemented KAPANG USA with DMA channel options for limiting local and licensed channels to households within a particular area; KAPANG DMA is also a service that advertising agencies can use to deliver advertising to traditional broadcast areas and provides town and city-based ad targeting for hyper-local or multi-asset campaigns.

KAPANG UK has country and town-based targeting, with Local Television services prioritising based on the user’s home address mimicking the traditional television regions used for the UK over-the-air broadcasting network.

How do I get launched on Kapang?

Kapang has 900 channel availability across 14 preset genres; Kapang does not queue channels onto the platform as a CTV or FAST Platform content aggregator would; if channel owners are paying the fees, they can have a channel today.  

As soon as the live feed has been received and checked, the channel can be scheduled to launch within a few days.  

View TV can provide a self-service or a managed playout scheduler if you do not have an existing live service and want to launch a channel from your content portfolio, all subsidised due to the confidence in the returns.

The costs are the same for all sizes of broadcasters and are between $0.05 and $0.14/hour broadcasted, depending on the service level required, which is a fraction of the $0.50/hour available earnings.

e.g., 10m hours of television watched per annum could generate $5m channel revenues with costs of less than $1m with no capital investment or software development, 80% Gross Revenues.

Log on now to https://kapang.com/launch-a-fast-channel/

Exceptional View TV Streaming TV approach is an excellent solution for traditional broadcasters, View TV - Streaming Experts
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