Busting FAST Channels Myth

Busting FAST Channels Myth as there is, it seems, an oddly mistaken assumption that the key to wealth and riches is to “stand up a FAST channel”. To grab some previously ungrabbed library content and then wait for the dozens of aggregator platforms that will pay you handsomely for said channels. Oh and then the ad revenue will come flowing in as well.

Sadly, nothing could be further from the truth.

To begin with, the owners of said aggregator platforms—the OEMs and media companies who own the big FAST services—are looking to cut the number of linear channels they have on offer, not grow them.

They’re looking to improve the overall quality of what they have on offer, especially now that Big Media—companies like Warner Brothers Discovery—are making some of their shows available for FAST distribution.

So that’s red flag number one.

Red flag number two is the equally mistaken impression that these aggregators are looking for out-of-the-box, pre-programmed channels.

They’re not.

Not even a little.

As per some most excellent research by Stream Metrics, much of what is on the FASTs is not from a single IP provider. In fact, only 18% of FAST channels are from a single IP provider. 

The services with highest percentages of single IP channels are Freevee (32%), Peacock (28%) and  Pluto (26%). 

And if you’re thinking the latter two have higher-than-average percentages because as media company FASTs, most of those single IP channels are created from their own massive libraries, you’d be correct. Le single IP, c’est nous.

On the other end are services like Local Now (6%), LG (8%), Stirr (11%) and Plex (12%).

So doing an end-run around the bigger players won’t work either.

This is just good business sense: there isn’t a whole lot of content out there that makes for a compelling single-IP channel.

This is why the FAST aggregators consider their ability to curate interesting channels to be one of their great strengths. Whether that’s something they do by hand or by algorithm or both, they like to create their own channels around specific genres.

In our first FASTs Are The New Cable report, Pluto TV founder Tom Ryan spoke about how he believes strongly that human curation is what has set Pluto TV apart from Day One and how his North Star was Spotify’s Rap Caviar playlist, a popular Spotify-curated playlist that has become a “thing”, one that rap acts and (especially) their record labels are thrilled to be selected for.

Ryan’s vision is why Pluto TV has curated channels with names like Badass Novelas, No Parents Allowed and Flicks of Fury.

When the big aggregators do take single-IP channels these days, they’re from equally big media companies. That’s because when WBD puts some of its shows on offer as a FAST channel/on demand package, it’s in their interest to play nice with them. The FASTs need WBD more than WBD needs them.  

Period.

The same way that if you’re someone with rights to some random niche content, you need the FAST aggregators far more than they need you. 

If they even need you at all, which is why the whole notion of “anyone can stand up a FAST channel” is troubling. (To me, anyway.)

How This All Plays Out

So where do we go from here?

Well, for consumers, curated channels are indeed a plus, a way to be continually surprised and delighted. Or at least surprised and delighted enough to keep coming back.

Advertisers, OTOH, have a different perspective.

It is a serious hassle for them to navigate a whole bunch of random curated channels across the various services. Even though streaming ads are bought on audience or, increasingly, context, having consistency would allow them to make a short list of channels across all of the various services. Then you can do an apples-to-apples comparison of how the channel was performing overall versus other channels and how it was performing across each FAST service.

Content owners of course, would benefit from a more standardized channel line-up across all the services, as one of their biggest gripes is that they lack a consistent set of numbers to negotiate off of. As in “500K people watch our channel each day on Services A, B, and C which is why we are asking for $XX per year for our content.”

Unfortunately, content owners don’t have any real bargaining power…but advertisers do.

Or they will, anyway, in a few years.

As per our latest report, FASTs Are The New Cable, Part 2: Advertising, right now, big advertisers don’t want to shift the bulk of their budgets to streaming because the ad-supported content is largely not all that compelling versus prime time TV.

But in a few years, as Netflix, Disney, HBO et al grow out their ad businesses along with the size of their ad-supported audiences, the landscape will look very different and the big brands with nine-figure budgets will feel good about shifting their budgets to streaming.

The pitch will be that SVOD is the new prime time and FASTs are the new cable. (Hence the name of the report.) 

At which point it is likely that there will be three categories of FAST channels: 

• Single IP channels, primarily from big media companies and news organizations, that live across all of the major FAST aggregators. (This includes single series channels.)
• Curated channels, where each service gets to show off their programming chops and create something that really resonates with viewers.
• Personalized channels. Because AI will continue to evolve and allow for the creation of something very similar to Spotify’s Daily Mix playlists. This is something I have predicted in my 2015 book, Over The Top. How The Internet Is (Slowly But Surely) Changing The Television Industry. And while I might have been about 10 years early on that one, I still think personalized channels will play a big role in the years to come.

Final Note:

As those big hundred million dollar plus budgets shift to streaming, there will be even more of a push to quality. This is to have the sort of content that appeals to advertisers. 

Which is not to say there will not be a place for niche content and niche audiences. 

It’s just not likely to be on the big aggregator apps.

News Source: TVREV