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Navigating Subscription Fatigue: The Rise of FAST Channels in CTV Advertising

Marketing
Marketing
Published: Aug. 02, 2023

Subscription fatigue has become a prevalent issue, thanks to a proliferation in CTV streaming services — a recent survey by Blue Label reveals that nearly 2 out of every 3 consumers have canceled at least one service within the past year. To counter this trend, many consumers are turning to FAST (free ad-supported streaming TV) channels as a solution.

For CTV buyers, it's crucial to grasp the fundamentals of FAST channels before delving into CTV inventory purchases. This post aims to shed light on what FAST channels are and how they operate, empowering you to make well-informed decisions and optimize your buying strategy.

What are FASTs?

FAST services are growing at an explosive rate — just take a look at the numbers.

  • Samsung’s FAST platform streamed three billion hours in 2022 — up 100% from 2021
  • E.W. Scripps forecasted generated more than $100 million from its FAST challenges in 2022
  • TVRev forecasts FAST, combined with AVOD, will generate $43 billion in total domestic TV ad spending in 2027

Common FAST services include Pluto TV, Sling TV, Xumo, the Roku Channel, and Peacock Channels. Take a look at Pluto TV's vast offering of FAST channels.

Screenshot of Pluto TV's FAST channels

But what exactly are FASTs? The definition of the streaming service was once fairly simple. Unlike other streaming services,

FAST channels were the only video-on-demand model to have linear channels.
FASTs were ad-supported but did not charge a monthly subscription fee.

But the definition of FAST channels is evolving. Now, free and subscription services also offer linear channels. FASTs offer pre-programmed content, typically found exclusively on linear channels, but also offer on-demand content.

In other words, the line is blurry. A more straightforward way to distinguish one service from another is to think of FAST and SVOD as two key business models where services fall into one of two buckets.

How do you determine one from the other? If content is free to watch, it's a FAST service. Think of a business model where either linear or on-demand video content is free and ad-supported. If it's not free, it's an SVOD model — or a service that charges a recurring fee and includes ad-free or ad-supported content. TVRev’s diagram below illustrates this well.

Nomenclature graph by TVRev

The History Behind FAST Channels

FAST services initially served on-demand content, allowing viewers to choose and watch their favorite shows, movies, and videos at their preferred times.

However, an explosion of streaming services and on-demand content had become too much of a good thing. Subscription fatigue was on the rise. Viewers were inundated with hundreds of thousands of movies and series to choose from — and subscribing to multiple SVODs to access content had become cumbersome.

Pluto TV found a way to solve this. The FAST service was the first to introduce linear channels to its streaming service, catching the attention of advertisers and viewers.

Now, linear channels once only available on broadcast and cable TV could be accessed on-demand. It was a welcome change for viewers — rather than scroll through hundreds of series and movies; viewers could channel-surf just as they would on cable.

The result: a viewing experience that combines the familiarity of traditional cable TV with the advancements of modern streaming technology. Picture yourself enjoying live sporting events, up-to-the-minute news, or your favorite pre-recorded TV shows and movies from anywhere you desire, with only an internet connection and a compatible device like a smart TV, smartphone, or tablet needed.

Breaking Down the FAST ecosystem

The FAST ecosystem is anything but straightforward. Several players exist — and understanding who fits where can quickly become confusing. To better understand the playing field, check out the infographic below.

Infographic of FAST services

In the FAST ecosystem, movies stand out as the most viewed content category, as represented by the "movie cars." Dedicated movie channels include Hallmark and Popcorn Flix, which are directly identifiable on the race track.

However, the platforms (Pluto, Tubi, Peacock, Xumo) are positioned in the infield, the Fueling Platform area, rather than directly on the main race track. Yet, the movie channels they host are still present and can be recognized by their distinctive "green glow." Why? Many of the major platforms and device-makers in the FAST industry operate their own free streaming channels. These channels, being part of large vertically integrated media companies, tend to be highly popular and heavily watched by users on their respective platforms.

News, or the “news cruise,” comes in second — including ABC, CBS and NBC. Sports cars denotes the big players in the sports category. Lastly, the kid’s corner represents children’s programming, and has few players in the FAST arena.

Streaming/connected TV devices like Roku, Fire TV, and Samsung are grouped together in the Device Depot infield section. Note that these streaming devices, despite being part of the Device Depot infield, also have their own individual FAST channels or streaming platforms. To distinguish these channels or platforms associated with each device, they are denoted by their respective flags.

Who are the major players in the FAST landscape?

While several players in the FAST ecosystem exist, a handful are responsible for controlling what FAST content is shown and where.

OEMs and connected device manufacturers

Imagine turning on your Samsung smart TV. Immediately, the Samsung Smart Hub appears.

Samsung TV Smart Hub

This interface is a coveted spot for players within the TV ecosystem. Why? Whoever controls the interface determines which apps and content can be displayed on the TV's screen. In other words, the company that controls the interface has considerable power over what content providers and respective apps are available to viewers, including FAST services.

There are two major players in control of the interface: OEMs and connected device manufacturers.

An OEM (Original Equipment Manufacturer) refers to companies like Samsung, LG, and VIZIO that produce televisions with their own proprietary operating systems. FASTs owned by OEMs include Amazon Freevee, The Roku Channel, and Samsung TV Plus, to name a few.

Content device manufacturers are responsible for the dongles that provide wi-fi for streaming, like Roku, Amazon and Google. Like OEMs, device manufacturers control which apps appear on their TV interface.

Both parties have considerable control over FASTs because they decide which FAST apps appear on their interface and where.

Aggregators

As the name suggests, aggregators aggregate both linear and on-demand content from various sources. Take Pluto TV, which has over 250 channels, including a specially curated channel called "Totally Turtles," which allows viewers to stream episodes of the popular '90s show Teenage Mutant Ninja Turtles.

Single Publisher Apps

Single publisher apps offer content from a singular publisher, such as Cheddar.

Seems simple enough, right? Here’s where it gets tricky — many single publisher apps choose to license their content to various aggregators. Consequently, their content can appear in multiple forms, either as a linear channel or as part of a grouped collection within a linear channel or even as part of the aggregator's on-demand catalog.

Content Providers

Last, but not least, are the content providers who own the rights to certain video content. While providers sometimes distribute their content via their own apps, they typically license their content out to aggregators to reach a wider audience. Think of A+E, AMC series or Filmrise.

Take Stories by AMC, a FAST channel available on Xumo. While the cable network has a dedicated fan base thanks to the hit show The Walking Dead, the network does not have the means to create its own streaming service. Rather, AMC licenses its content out to aggregators like Xumo to reach streamers on a larger scale.

What challenges do FAST advertisers face versus when they advertise on non-TV channels?

While FAST services are steadily growing in popularity, that’s not to say they’re without their flaws. Serving ads in the FAST ecosystem comes with several challenges, including:

  • Lack of transparency: Transparency is murky. In the world of streaming TV, content is delivered through various platforms and apps, each with its own infrastructure and architecture. Unlike websites with unique URLs, streaming platforms and apps typically do not have individual addresses corresponding to specific content or ad placements. As a result, advertisers face difficulties in precisely determining where their ads are being shown without a universal identification system.
  • Over frequency: The abundance of content libraries poses difficulties in accurately predicting and maintaining consistent viewership on an individual level. The situation becomes even more intricate with numerous vendors providing diverse programmatic options, particularly open programmatic. These vendors often operate independently and do not communicate with each other. As a result, viewers may encounter the same advertisement multiple times.
  • Disparity between digital and TV advertising: TV advertising often requires different data types, focusing on households and broader viewership metrics rather than individual-specific data used in digital advertising. Brands may need to adjust their data strategies and access new sources of information to target TV audiences effectively. In digital advertising, brands can use various data points and user-specific information to target individuals with personalized ads. On the other hand, TV advertising operates on a household-level or TV set-level basis, making it more challenging to target individual viewers with the same precision as digital advertising.

FAST Advertising for Your Brand

FAST platforms offer a remarkable chance for advertisers to connect with enthusiastic viewers who are deeply engaged with the content they love. But where do you begin?

Look no further than Simulmedia's TV+® platform! With over 250 direct integrations with networks and publishers, we empower advertisers to seamlessly plan, purchase, launch, and measure campaigns across FAST programming. Our cutting-edge technology optimizes ad strategies based on target audiences, programs, and platforms, ensuring a successful and predictable campaign outcome that aligns perfectly with your objectives.

Ready to dive in? Reach out to one of our experts to get started.