DENVER — Free ad-supported streaming TV (FAST) was a hot topic at a Wednesday StreamTV Show panel, where executives in the space expressed optimism about FAST’s future. Some of them think FAST channels could eventually replace traditional TV, even though broadcast is still clinging onto its viewership.
Ashley Hovey, director of AVOD at The Roku Channel, believes it’s a matter of time before FAST surpasses linear. But before that happens, sports events would have to shift away from the broadcast model.
“What you see right now that is holding broadcast up is sports and news,” she said. “I think a lot of the other type of viewings, like scripted, have definitely gone down. There’s the question of, do sports need to go over to actually make [broadcast channels] go away?”
Sports is a huge content offering that could sway the tide for FAST channels, according to Taylor Sibbern, VP of business development at Tubi. The Fox-owned AVOD service recently announced it will make all the 2022 World Cup games available on-demand.
“I think we are heading more in that direction,” Sibbern said, noting Tubi’s World Cup offering will significantly impact U.S. based viewers and advertisers. “It comes down to what’s available and how the users know it’s available.”
Chris Knight, president and CEO of Gusto TV, also thinks it’s a matter of time before FAST takes over. Gusto TV is an OTT food channel that was originally on a Canadian linear pay TV channel.
“The way technology is evolving and changing, this is such an exciting time to be doing what we’re doing,” he said. “For me it’s a question of time and the evolution of the app.”
On the other hand, Will Gurman, VP of global partnerships and content strategy at Paramount Streaming, doesn’t see FAST replacing broadcast. Rather, he thinks of it as a “complementary ecosystem.” A portion of viewers will stick to a traditional linear model because it’s most familiar to them, while others more rapidly migrate to streaming.
“It’s on us to differentiate those experiences, make sure we’re balancing where our content lives, how we’re watching shows, how we’re advertising,” Gurman said. “Our goal is to keep these business models together and intact.”
FAST original content
The panel also touched upon the approach free AVOD services take to original content, and how it differs from the approach subscription-based services take.
Part of that strategy is not relying on one big content title to succeed, Sibbern noted.
“We want to have a little bit of something for everyone,” she said. “Being able to produce and work with every sort of genre of content…I think you can’t just put all your dollars in one place when it comes to ‘free.’”
Especially since originals are expensive to produce, Gurman pointed out, but Paramount’s advantage is its sizable amount of intellectual property.
“At Pluto TV, we’re threading that needle and looking at our alternatives, as we evaluate originals and exclusives, into driving highly marketable events and user acquisition areas,” he said. “We have the benefit of unlocking a massive amount of library within the Paramount Global catalog as well as working very closely with our other brands across our business.”
On the flip side, Gusto TV purely consists of original content, Knight noted, describing it as a sort of “white buffalo” in the streaming space. Gusto TV is also looking to produce Spanish-language content, and that's part of a trend of platforms seeking to reel in Hispanic viewers. Roku this week launched a dedicated Spanish-language hub, touting a robust set of content partners.
Hovey said Roku is doubling down on original content, both through production and acquisition. And that provides ample opportunity for advertisers, helping them understand and have access to content they can’t find anywhere else.
“These ad-supported services are an evolving business with a lot of personalization in them. That’s the ‘cherry-on-top’,” she said. “An extra-special experience that you can have on top of the free content.”
Where’s FAST revenue coming from?
With free-to-use services comes the question of how and where to find advertising revenue. Sibbern noted there’s been a recent wave of advanced advertising solutions designed to reach connected TV audiences.
“A lot of our audience is unreachable on cable, about three-quarters,” she said. “So we’re seeing a lot of traditional TV advertising coming over…advertisers will follow the eyeballs and CTV is much more of a ‘lean back’ experience.”
Hovey agreed with Sibbern that advertisers want to be where the viewers are, and Roku is leveraging its user data to decide which ad formats work best in the CTV format.
“We’re the #1 streaming platform in the U.S. When you have that volume of people, the advertisers are coming,” said Hovey. “We have a really strong relationship with the data we can help deliver to the advertiser. So when they want something really specific, we can deliver it in a way TV historically hasn’t been able [to do].”
Paramount has taken a holistic approach to ad revenue, Gurman said, helping advertisers who want to access a variety of streaming platforms as well as those who want to focus on broadcast reach.
“Being able to have that diversity of options for advertisers has really been successful,” he said.
“Advertising is a necessary evil,” said Knight, so the goal is to make ads less intrusive, whether that’s through split screens or L-shaped formats. He added a big part of Gusto TV’s advertising growth has come from commerce media, which uses commerce data to better connect with consumers.