FAST or famine

Free advertising-supported streaming TV remains a hot topic on the industry conference circuit thanks to its rapid growth, with hundreds of FAST channels launching in the US and beyond. But what does the future hold for this sector?

By Jonathan Webdale

The free advertising-supported streaming TV, or ‘FAST,’ channels market is moving, well, rather quickly. From a standing start just a few years ago, the sector is now expected to generate US$18bn in revenue globally by 2028 – triple the figure for 2022. Even Netflix – once a diehard subscription video stalwart – is “keeping an eye on that segment,” according to co-CEO Ted Sarandos, speaking earlier this year, shortly after the company introduced its cheaper ad-supported VoD tier.

For the uninitiated, the distinction between FAST and AVoD is that the former is essentially linear TV delivered via the internet, whereas the latter requires the viewer’s active participation in navigating between on-demand shows. FAST channels can be dedicated to individual titles – like Fremantle’s Baywatch and American Idol, for example, playing on a loop across platforms like Paramount’s Pluto TV, Samsung TV Plus, Roku and Amazon’s Freevee.

All3Media’s Midsomer Murders and BBC Studios’ (BBCS) Top Gear are in the same vein, and all three distributors operate their own genre-based destinations too, featuring a mix of titles.

Fremantle has gameshow-based

Buzzr, All3 runs reality-focused So... Real, and BBCS has Homes & Gardens to name but a few.

Major US IP owners such as A+E Group have gone down the same route, propagating a range of genre and single-series outlets, with the fi rm rolling out a trio of crime, mystery and war-themed networks on Samsung TV Plus in Europe in May. Other prominent players include Banijay, Canada’s Blue Ant Media and US independents Filmrise and Cineverse (fka Cinedigm), all of which are dedicating increased resources to FAST.

More and more distributors and IP owners are spying the opportunity, with Guinness World Records and Cineflix Rights among those recently taking to the field, the latter with Real Disaster Channel.

Platforms beyond the market leaders are myriad, spanning the likes of Comcast’s Xumo, LG, Vizio, Fubo TV, Rakuten TV, Rlaxx TV and more. Chicken Soup for the Soul Entertainment’s Redbox Free Live TV, for example, recently struck a deal with AMC Networks for FAST channels dedicated to hit series The Walking Dead and Portlandia. Also worthy of note is that Amazon will soon launch a new Fire TV Channels hub, having unveiled the move at its NewFronts presentation in May.

Most of the action in this space so far has taken place in the US, since FAST has emerged in parallel with the cord-cutting phenomenon associated with the demise of cable. But other territories are on the rise and, while the US will still account for the lion’s share of that US$18bn 2028 projection by Digital TV Research, the fi rm suggests this

AMC recently struck a deal with Redbox Free Live TV for a Walking Dead FAST channel

Tim Mutimer, CEO Rights, Cineflix Media FAST is becoming an integral part of our business, enabling us to launch our must-watch shows direct to audiences worldwide.

Maximising IP returns for our producer partners has always been central to our strategy, and rolling out FAST channels will harness the potential of our growing catalogue of content.

Cedric Dufour, CEO, Rakuten TV FAST and AVoD currently represent a significant portion of our business, with healthy doubledigit year-on-year growth. Aside from our FAST channels line-up and the Rakuten TV Originals being offered to all 43 countries in Europe, we will also continue to invest in original productions.

Julie Mitchelmore, VP of digital, A+E Networks EMEA

Samsung TV Plus is a leading free adsupported platform, and through our partnership, even more fans can now enjoy quality programming from our strong A+E Networks EMEA programme catalogue, demonstrating how popular our true crime, mystery, and World War content is.

Laura Florence, senior VP and general manager of digital, Chicken Soup for the Soul Entertainment

The Walking Dead and Portlandia are some of AMC Networks’ most iconic series, and the ability of our consumers to watch them 24 hours a day will be an immediate hit. Our Redbox Free Live TV app continues to scale. We should quickly reach 200 channels by summer and have plans to scale even further later this year.

Charlotte Maines, director of Fire TV advertising, monetisation and engagement, Amazon With Fire TV Channels, we’re delivering a simple, category-based experience that makes it easy to discover what you want to watch while constantly expanding content offerings.

Kathryn Hubbard, head of content licensing, Guinness World Records

This is a pinnacle moment for both GWR Studios and Guinness World Records in general, where we get to launch our first ever branded television channel. It presents an amazing opportunity to curate and showcase the very best of our content.

Aline Jabbour, director of business development and content acquisitions for Latin America, Samsung TV Plus

Currently, the number of Samsung TV Plus users is greater than the number of subscribers in the entire pay TV sector in Brazil. I don’t think FAST is a substitute for a premium subscription service. It’s not our intention. Our platform is about ‘zapping,’ of passive content – that ‘lean-back’ experience at the end of the day in which the viewer seeks comfort.

Maria Rua Aguete, senior director, Omdia dominance will narrow from 67% in 2022 to 55% in fi ve years’ time.

US$12bn in revenues for FAST channels is impressive, but when viewed in the wider context of online video, social video remains the growth story for the next five years. FAST channels are another window to monetise content, but not the only one.

Analytics outfit Omdia puts US dominance even higher. At the outset of 2023, it identified the country as responsible for 90% of global FAST revenues, though – perhaps indicative of how quickly the sector is evolving – this figure was revised down to 80% in April. Omdia names the UK, Canada and Australia as markets most likely to witness major FAST growth over the next four years, but also says Germany, Brazil, Italy, Mexico, France, Spain and Sweden are primed for expansion. The firm predicts a US$1.6bn revenue opportunity outside the US by 2027, while the US will exceed US$10bn.

The UK and Canada are predicted to have FAST markets worth more than US$500m and US$300m, respectively, by 2027. FAST channels in Germany will generate just over US$200m in the same year, while those in Brazil will hit US$100m – representing around half of the total Latin American FAST market, which will be worth US$207m in 2027. FAST revenue in Mexico will be US$93m in 2027, making it the seventh-largest individual FAST market.

Global FAST revenue grew almost 20 times between 2019 and 2022, according to Omdia, and is set to triple between 2022 and 2027 to US$12bn – broadly in line with Digital TV Research estimates.

While these figures are indeed exciting, they need to be put into context, however, with the latter firm expecting global pay TV revenues to stand at US$125bn in 2028. This is down from US$151bn in 2022 and very nearly at parity with global SVoD revenues, tipped to hit US$124bn by then, up from US$99bn in 2022. Global AVoD revenue for TV series and movies will more than double from US$41bn last year to US$91bn in 2028.

Social video, meanwhile – served up via the likes of TikTok, YouTube, Snapchat and Meta’s Facebook and Instagram – is on course to top a trillion dollars in global revenues by 2027, per Omdia. FAST may be growing quickly, but it will remain a thin slice of the overall media pie.

Having spent 2022 cutting costs and restructuring its colossal business, 2023 has seen Warner Bros Discovery (WBD) look to make streaming profitable while reopening previously closed revenue streams and reducing operating expenses.

This process has not been without its casualties, with widespread redundancies and torpedoed projects meaning that if last year’s megamerger between WarnerMedia and Discovery had a honeymoon period it didn’t last long and wasn’t particularly happy.

But this May, WBD president and CEO David Zaslav said the company had taken a “meaningful turn” in its quest to achieve a profit on streaming, with its US direct-to-consumer (D2C) business “no longer a bleeder.”

Indeed, the US$50m in adjusted earnings in the first quarter of 2023 stood in stark contrast to D2C losses of US$654m a year ago and US$217m in the previous quarter.

Meanwhile, WBD-owned HBO continues to air some of the most talked about shows on the globe, from hit video game adaptation The Last of Us to the recently concluded drama Succession

Its originals output outside of the US, however, has taken a hit. The company’s bold proclamations, made in April 2022, to produce around 40 original series for HBO Max in Europe by the end of 2023 feel like they were made in a different era. Since then, HBO Max has been rebranded as Max in the US and its international ambitions have been pegged back significantly.

HBO Europe, the Bucharest-based content hub for Central and Eastern Europe (CEE) that opened in 1991, has borne the brunt of this abrupt U-turn, with originals scaled back in the large and complex region, key creative executives let go and the recent content it has produced sold to rival streamer SkyShowtime.

“We will continue to commission local content for Warner Bros Discovery’s linear networks in these regions and we remain substantial acquirers of local third-party content for use on our streaming services,” WBD said in a statement a year ago.

Jamie Cooke, WBD’s Londonbased general manager for CEE, Baltics, Middle East, Mediterranean and Turkey (CEE MENAT), says while the volume of its output in the region will be affected, the quality will be maintained.