Launching FAST Channels is challenging, is it the “Wild West?”

Launching FAST Channels can be challenging, but if you follow standard business practices it is profitable and certainly the future of Linear Broadcast Television and ad-funded on-demand video content watching.

FAST is not a new genre or format of TV

FAST (Free Ad-Supported TV) channels power streaming platforms that offer free access to linear and on-demand content, supported by ads. FAST channels have been growing in popularity in recent years, as more consumers cut the cord and look for alternatives to traditional pay-TV services.

However, FAST channels are not a new format or genre of TV. They are still TV, and they still appeal to the same audiences who enjoy watching TV. FAST channels offer the same variety, quality, and convenience of TV, but with some added benefits. FAST channels have a simple and efficient methods of delivery and monetization, for both viewers and content providers.

For viewers, FAST channels provide more choice, control, and flexibility over what they watch, when they watch, and how they watch. Viewers can access hundreds of FAST channels across various genres and niches, as well as exclusive FAST first content that is created or acquired specifically for FAST channels. Viewers can also watch their favourite shows and movies on any device, at any time, and at any place, without any subscription fees or contracts. Viewers only need to watch some ads, which are dynamically inserted and tailored to their preferences and profiles.

For content providers, FAST channels offer more opportunities, revenues, and efficiencies for creating and distributing their content. Content providers can reach more viewers and markets with their content, without the limitations and costs of traditional TV distribution. Content providers can also monetize their content more effectively, with dynamic ad insertion and programmatic ad sales, which maximize the ad revenues and ROI of their content. Content providers can also leverage the cloud-based platform and ad-tech innovations of FAST channels, which simplify and optimize the content creation and management process.

FAST channels are the same TV, but better. They are not a new format or genre of TV, but a simple and efficient method of delivery and monetization. They cater to the same audiences who love TV, but with more benefits and advantages. FAST channels are the future of TV, and they are here to stay.

Do not do revenue shares to avoid technology fees.

Why Revenue Shares in FAST Channels are Devaluing the Industry, avoiding Technology Fees is Not Needed, simply make sure you have the correct cashflow facilities.

FAST (Free Ad-Supported TV) channels are streaming platforms that offer free access to linear and on-demand content, supported by ads. FAST channels have been growing in popularity in recent years, as more consumers cut the cord and look for alternatives to traditional pay-TV services.

However, FAST channels also face a major challenge: their revenue model. Many FAST channels rely on revenue sharing agreements with multiple intermediaries, such as content providers, platform operators, ad servers, and ad networks. These intermediaries take a significant cut of the ad revenues in exchange for cash-flowing the technology fees, leaving little for the FAST channel operators. Moreover, many FAST channels operate on a bootstrapped basis, with limited resources and scalability.

This revenue model is devaluing the FAST channel industry, as it reduces the incentives and opportunities for content creation, innovation, and quality. FAST channel operators have to compete with other streaming platforms that invest heavily in original or exclusive content, which gives them a competitive edge and attracts more viewers. FAST channel operators also have to deal with low ad-fill rates, low ad revenues, and low content quality, which affect their profitability and sustainability.

Furthermore, avoiding technology fees is not required for FAST channels, as they are not a significant cost factor. Technology fees refer to the fees that FAST channel operators pay to the platform operators or the ad servers for using their technology and infrastructure. However, these fees are relatively low, less than 10% of gross earnings, compared to the revenue share deductions that the intermediaries take. According to a report by Omdia https://www.harmonicinc.com/insights/blog/fast-channel/, technology fees account for only 5% of the total costs of FAST channels, while revenue shares account for 55%.

Additionally, technology fees are not a major cash flow issue for FAST channels if they have cashflow facilities in place rather than being deducted from the ad revenues. The cash flow gap between the technology fees and the ad payments is more than 60 days, meaning that FAST channel operators receive the ad revenues later, and then pay the technology fees upfront as television currently is.

Therefore, revenue shares in FAST channels are devaluing the industry and inclusive technology fees are not needed. High Revenue shares are unsustainable in the long run, as they erode the profitability and viability of FAST channels.

Technology fees are not a significant cost or cash flow factor, as they are low when compared to ad revenues. FAST channel operators should look for alternative revenue models that allow them to retain more of their ad revenues and invest more in their content and avoid bootstrapping.

The difference between a FAST Channel operator and a Content Distributor, they are not the same.

A content distributor usually licenses and distributes content for a fee or a revenue share within a subscription or ad-funded FAST Platform.

A FAST Channel is not a content distribution package, but a linear channel operator that can be brought in-house instead of working with a channel partner. However, many FAST channels made by distributors are ignoring some key tasks, such as FAST Channel Branding, FAST Channel & Content Marketing, FAST Channel Curation, and FAST Channel Sponsorships and advertising deals. These tasks are essential for the financial success of a FAST channel.

Even though FAST Channel technologies make it easy for content distributors to become a channel directly, they are not paying enough attention to marketing, brand, and advertising sales in most distributor direct FAST channels.

The platform is not responsible for bringing viewers to the channels. More than 80% of the performance of FAST Channels depends on the channel brand, channel content, and channel marketing, not on the FAST Platform or CTV App. Most channels expect the channel to bring audiences to avoid marketing fees

Sadly, the revenue share models in some end-to-end solutions do not give enough room to invest in being a fully independent broadcaster. They are neglected with the assumption that platforms are doing these tasks

The FAST Market is growing exponentially

New Omdia data reveals global FAST channel revenues will reach $12bn in 2027