Three’s Company, Tiny House Nation, and Bar Rescue are all part of my streaming TV routine as all have enough episodes to create a never-ending loop as free ad-supported streaming TV (FAST) channels. But this programming and viewership dynamic is about to evolve. More people are tuning-into free streaming services as the content is getting newer, better, and, at times, exclusive. There’s a seismic shift happening that will impact content licensing, the services viewers use to watch TV and, as a result, the locations where brands advertise their products.
Let’s explore that new, exclusive content trend…
Remember that water cooler talk thing where we huddled around to impress our colleagues by being the first to recommend the hot new TV show to watch? Recently, that chatter has been about Jury Duty, a free streaming series that dropped two episodes a week during April. Notably, it's not a big budget Netflix series that viewers binged in a weekend. Rather, it’s free with ads on Freevee, Amazon’s FAST/AVOD (Advertising-Video-on-Demand) service. And, the service’s reach is far from niche as 25% of U.S. internet households say they tune in (according to Circana’s TV Switching Study).
Across Prime Video during Q2 2023 (the combined force of Prime Subscription Video-on-Demand (SVOD), Freevee and Amazon Channels), original series Jury Duty ranked 5th generating 1.5% of all views (according to Circana’s Subscription Video Track). That puts this new, exclusive, and free series in the company of tent-pole titles like The Marvelous Mrs. Maisel. Another original, Judy Justice, ranked 3rd pulling in 2.6% of all views across the collective Prime Video service. For those of you that aren’t aware, Judy Justice isn’t behind the subscription wall; like Jury Duty, it’s also available on Freevee so ranking 3rd is quite impressive. In fact, Judy Justice has 120 episodes available to stream while Jury Duty released merely eight. That gives you a sense of the viewership magnitude a new original like Jury Duty can bring to a service such as Freevee. Sorry John Taffer, but I may need to “shut it down” and tune into Jury Duty next.
New exclusive programs change the demo…
The free streaming distribution channel is maturing; the audience size is growing and programming mix is improving. As a result, the demographic that tunes in is beginning to align more with the established SVOD and Transactional Video-on-Demand (TVOD) channels. Interestingly, 37% of the audience for SVOD, TVOD and FAST is aged 35-54. This audience demo is something for brands to consider as they look for the most effective TV service to run their ads. FAST is no longer the land of cash strapped cord cutters, but rather a viewing destination for more than half (55%) of homes.
It’s not all good news for FAST services. Families with younger children have a higher proclivity to churn. Of course, this potentially provides an opportunity for content owners and producers, who should consider this demographic target when determining which titles to license to FAST services. The value of these programs should not be underestimated as they will be the catalyst to attract new users and increase audience engagement. More to the point, programs that reach this audience are the magic bullet that will keep viewers tuned in and allows for the services to land more ad deals.
But they’re just so many hours in the day…
There has been some talk about the audience for free streaming being different than those who watch cable TV. In some ways that’s true, since viewers over age 55 are less likely to stream while they remain the core cable TV audience. But as you dig into the viewership habits, there is another pattern forming. Viewers that stream free programming tune into their pay service less often. Here’s a couple of stats about pay TV subscribers to consider. If they don’t use FAST services, 76% of the time they use their pay TV every day. However, if they do use FAST, it drops to 67%. This decline gets worse as viewers tune into FAST services more frequently. With FAST offering content akin to many basic cable channels, the viewer’s time is shifting over to platforms like Pluto and Tubi TV.
Change is the only constant…
Looking ahead, we can count on more change. Free streaming services will evolve their programming strategy to grow viewership and attract advertisers. This will make content licensing more complex as it will increase the need to find programs that best fit each service. And, as newer and sometimes exclusive programs land on FAST services, these shows will drop off SVOD services. If you think you’ve figured out where to find your comfort TV programs, think again; watching TV won’t be as straight forward as it used to be. Yet, FAST popularity is growing at the perfect time for consumers as their wallets are feeling the pinch of inflation while monthly subscription fees are increasing for SVOD services. The good news for our industry is there’s a lot of money to be made through content licenses and advertising on streaming services. Make sure your strategy is buttoned up.
John Buffone is a vice president and industry advisor at Circana (formerly The NPD Group). With over 20 years of experience in the consumer research and entertainment industries, John has advised many of the largest media and consumer technology brands in the industry.
He offers his industry expertise on trends that focus on how connected devices are rapidly changing the way consumers use technology at home and on the go. His research focuses on the confluence of digital content distribution and consumer electronics trends.
Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by StreamTV Insider staff. They do not represent the opinions of StreamTV Insider.