FAST Channel Scenarios – When revenue is split among many third-party entities, the resulting distribution reduces the earnings for a content owner to an impractical level. Moreover, for content targeting a niche audience, hosting it on YouTube often proves to be more cost-effective than some FAST Platforms with the avoidance of fixed fees, but in theory CTV FAST should pay much more and we have the answer…… plus a full downloadable comparison at the bottom of this page.
Read Dr Augustine Fou’s take on DSP in display and video – https://viewtvx.com/streaming-news/dsp-take-rates-what-did-you-think-they-took/
Why is YouTube not the right vehicle for premium content & broadcasters?
YouTube’s platform, while expansive and popular, poses challenges for premium content creators primarily due to its association with user-generated content. Advertisers often assume that the majority of material on YouTube is user-generated, which can lead to a reluctance to invest in higher-priced ad placements.
This perception affects the type of ads and the revenue that premium content can generate. Consequently, premium content may not yield the expected financial returns or attract the desired audience demographic, as the advertising algorithms are not always designed to distinguish between user-generated and professionally produced content.
This can result in a mismatch between the content and the ads displayed, potentially devaluing the premium nature of the content and compromising the viewer’s experience.
FAST is not dead, it just needs a little realignment
We’re not here to cast doubt on the rise of FAST, as FAST Channels are indeed the future of Free-to-air Television. Our blog is dedicated to exploring FAST, underscoring our commitment to its success, but audiences want more premium content such as Live Sports and Premium television and so this substantial uplift in content cost has to be accommodated with a more efficient process.
View TV Studios has delved into the realm of justifying unique content creation, focusing on Episodic Television Series, Movies and Live Sports Streaming as worst case scenarios. Their research has unveiled promising strategies for monetizing premium content, ensuring the highest possible return on initial content investment that mimics and exceeds traditional FTA TV for minimum change to broadcast businesses.
Table 1.1 – FAST Platform Comparison
Kapang’s diverse advertising approach combines programmatic advertising, direct self-service sales, platform-specific promotions, and action-driven ads, ensuring a consistent 100% ad-fill rate. While the average Cost Per Mille (CPM) may be lower compared to programmatic Connected TV (CTV) alone. The comprehensive fill strategy outperforms the revenue generated solely through programmatic means, which often suffers from inadequate fill rates. This results in a higher average Revenue per Mille (RPM) or Revenue per Hour Watched when using Kapang’s hybrid model.
Furthermore, by facilitating direct self-service deals and bypassing multiple advertising Platforms and Ad-Marketplaces, Kapang secures exclusive ad inventory and shares less revenues. This exclusivity is not available on other platforms, enabling Kapang to manage its advertising slots with full autonomy and without limitations and providing enough reward to drop its own revenue share model completely.
"The ad-fill success far outweighs yielding CPM in maximizing ad-funded revenues on Linear Streaming TV such as FAST Channels." stated Nicky Scanlon, Channel Broadcast Director at Kapang.
Kapang is offering zero revenue share model due to reclaiming ad-platform inefficiencies
Owning the platform and a robust SSP, View TV has innovated FAST into FAST Plus. This approach supports Premium Content and current Broadcasters by offering a Zero Revenue Share on Kapang and the ability to support channel creation by reclaiming the revenues from different hops in the ad-trading process such as in the Ad-Marketplaces and the SSP’s. This is achieved by leveraging their integrated CDN and CTV platform, thus delivering a Premium Walled Garden CTV service akin to YouTube’s model.
Why is ad-fill so appalling on a high number of distributed FAST Channels?
Kapang identified two primary reasons for the underwhelming revenue of FAST Channels: insufficient ad-fill and the extensive chain of revenue shares. Ad-fill for FAST Channels relies heavily on sharing key GDPR safe data about each viewer, which must be formatted correctly across various macros for each platform, country, and channel operator. Incorrect syntax can lead to lower ad rates and lower ad-fill success rates.
A lot of FAST Channel Cloud Playout services are missing fundamental features and formats to deliver a true television experience that audiences expect along with the data required to inform downstream ad-decisioning servers what their adverts are being inserted in-between.
Cheap FAST playout has evolved due to requirements by FAST Channel operators to cut spend because of the the small revenues being generated, but curating a FAST channel properly will certain pay five and ten times the investment as quality is much more appreciate than quantity.
The number of multiple revenue shares is halting digital transformation for broadcasters?
As broadcasters transitions to CTV and Smart TV consumer platforms, a significant portion of the revenue—over three-quarters—can be consumed by intermediaries in the chain, including DSPs, Ad-Exchanges, SSPs, FAST Channel Distributors, and Consumer Platforms, not to mention the technology providers. This is unsustainable by the broadcasters and Kapang would prefer higher audiences and a lower fee to attract premium established television channels.
Stop wanting mass FAST Channel Distribution – Audience Fragmentation is costing channels thousands of dollars
In the evolving landscape of Free Ad-Supported Television (FAST), the distribution of channels, while important, is not the primary factor driving their viability. Instead, the focus has shifted towards optimizing ad-fill rates and streamlining revenue sharing processes. A channel’s success is increasingly measured by its ability to maintain consistent ad-fill, ensuring that every available advertising slot is utilized, thereby maximizing revenue potential. Simultaneously, simplifying the revenue share structure is crucial, as it allows for a more transparent and efficient allocation of funds, benefiting both content creators and distributors. These strategic priorities ensure that FAST channels can thrive in a competitive market, offering value to viewers, advertisers, and content providers alike.
Kapang has restructured the early adopted FAST model to provide a financially viable business model for premium content creators and channels.
To foster an environment where premium content, new studio productions, and top-tier broadcasters can thrive, Kapang has revamped its ad-funded TV business model. This new approach mirrors YouTube’s, where ad provisions and technology are neutral, allowing Video Content Libraries and TV Channels to bypass the complex web of intermediaries and directly recapture revenue by going direct to the platform which also has a more efficient connection to premium advertisers.
Kapang had spent a lot of time on working through the solution to bring The premium content creators, the TV audiences and the CTV advertisers closer together to provide a much more justifiable business model, performance and return on investment for all three key stakeholders.
Content creators who previously partnered with FAST Channel Factories (https://viewtvx.com/streaming-news/fast-channel-sweatshop-factories-are-devaluing-content-in-the-streaming-space/)now have the opportunity to take control and maximize their earnings. Kapang has innovated the traditional model by eliminating the need for intermediaries that previously contributed very little other than to a significant reduction in content owners’ profits.
FAST TV Channels with professional curation and enhanced metadata population, along with more favorable NET revenue shares is a new direct service called Kapang Studio. Content owners can now enjoy higher revenues as well as live reporting and faster revenue payments. Kapang’s commitment to improving curation and employing advanced technology ensures that content owners can receive a more substantial share of each ad-dollar, earning multiples on the previous multi-channel average of 10% of gross earnings.
What are the three Kapang Content Channel Business Models?
Kapang has developed three simple vertical premium content and television broadcaster business models to accommodate the different levels of content channel providers in both budgets and content value.
The three innovative models present a significant advancement in addressing the crucial challenges within FAST. They ensure a seamless acceptance of all content, provided it meets the formatting criteria, enabling a swift launch timeline of 7-28 days. FAST channels are efficiently created or onboarded and set to go live in just a few weeks. Each channel benefits from real-time reporting dashboards, enhancing transparency and management. Moreover, the revenue payment process has been expedited, with payments being issued within 28 days—a substantial improvement from the previous 60-day timeframe, starting from Summer 2024.
Kapang Studio – Scenario 1 of 3
Kapang Studio Business Model – Content is listed and shown as VOD and FAST Channels receiving an equal share of the substantially higher Profits.
This model enables content owners to avoid FAST Channel Sweatshops and amateur distributors, a go direct to the platform. The scenario provides direct revenues from Kapang and the ability for content owners to distribute the service to other platforms directly with no additional revenue shares.
Developed for Episodic TV, Movie Content Owners and Video Content Libraries who are simply used to licensing their content, requiring a share of the profits that have been earned by placing video adverts at strategic points in on-demand video as well as Kapang creating a dedicated FAST Channel if appropriate.
NOTE – Although this is effectively a 50/50 deal, the content owner receives more than three times the revenue than they would licensing their content to a FAST Channel operators.
Kapang Channels – Scenario 2 of 3
Kapang Channels Business Model – Keep all of your FAST Channel ad-revenues and have a simple SaaS Fee or NET revenue deduction for the channels stuck in traditional FAST modelling.
The Channels model for Kapang is for existing FAST Channel Broadcasters who already have a curated playout feed and looking for premium distribution to earn much more revenue per hour watched and witness a fast return on the content investments.
NOTE – Although this is effectively a 100% deal, the content owner receives many times more than double existing FAST Channel revenues due to the advertising fill rate and efficient process between the three stakeholders. Kapang reclaims its earnings from skipping several SSP and Ad-marketplaces to reclaim lost revenues to other services.
Kapang Broadcaster – Scenario 3 of 3
Kapang Broadcaster Business Model = Keep all platform ad-revenues and pay a simple Platform License and TV Cloud SaaS Fee
The Broadcaster model is for existing premium content broadcasters who own and broadcast their own major channel. A Kapang partnership is SaaS only providing traditional FTA revenues in exchange for Kapang hosting premium traditional channels as that is what the audiences demand.
Check out the full packages at https://viewtvx.com/kapang-tv/
Please find below a copy of the in-depth comparison from View TV Studios
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