Exploring FAST Channels and Advertising Trends
E2 Marketing Solutions
February 1, 2024
Originating in the mid-2010s, and exploding in growth during the 2020s, the FAST Channel model has been changing the way we watch Streaming and Linear TV. From cable subscription services to on-demand subscription based streaming platforms, FAST has emerged to complete the full circle back to Live TV. In this latest addition to The Beta Blog we will break down everything you need to know about the FAST services and channels.
What are FAST Channels?
Free Ad Supported Streaming Television (FAST) refers to a category of internet based streaming television services that offer traditional Linear TV style programming (a.k.a. Live TV), movies, and other content. Examples of FAST platforms include Pluto, Roku, and Tubi.
The main differentiator (in most cases) is that users pay no fees for the service, instead these platforms are exclusively funded by advertising within commercial breaks.
In addition to a Live TV feed with a programming grid style format, many FAST platforms also offer on demand services. Once again very similar to what we see today with most cable subscription services, but our key phrase here is “No User Fees”.
The Rise and Evolution of FAST Channels
Before we get into the history of FAST format channels and platforms, we must acknowledge an internet based streaming service that introduced viewers to a new TV experience. Netflix can be thanked for being one of the first Subscription Based Video On-Demand (SVOD) services to do so. Launched in 2007, Netflix as we know, provided on demand movies and other content that users had to pay monthly subscription fees to access. Wildly successful, the new Netflix experience gave viewers alternatives to traditional Pay-TV services and experiences, and other platforms such as Hulu started to emerge shortly after.
Now let’s fast forward to 2014, a group of entrepreneurs had an idea to take YouTube and Vimeo online content and curate it into Linear TV style channels that would be free for users and funded by commercial ad breaks. With that vision, Pluto TV was born and can be considered the very first major FAST provider. Within the first year of Pluto TV’s creation, their service caught the attention of Hulu to partner and distribute current season episodes from ABC, NBC, and FOX programming as well as older classic television series. This partnership moved Pluto away from providing only User Generated Content (UGC) and into higher quality content such as popular TV Shows and Movies.
In 2016, Pluto signed a deal to be distributed on PlayStation consoles, and by 2017 they signed with Samsung to integrate the Pluto app within their Smart TV’s. In 2018, Pluto focused on its global expansion starting with European countries, and finally in 2019 they struck a massive $300M acquisition deal with Viacom (now Paramount Global). Pluto’s growth has been impressive, starting at just a few hundred thousand subscribers and growing to 80M subscribers worldwide over the course of 9 years.
During that same length of time, the space exploded, and several other FAST Channels and Aggregators jumped on the bandwagon, creating more standalone services.
Differentiating FAST From Other Services and Streaming Platforms
Now that you know the history and the basic definition of FAST, it’s also important to understand what services and platforms are not considered FAST. The landscape is overlapping and confusing, so let’s break down some other definitions and acronyms with a chronologically ordered list by the year they were concepted:
Subscription service providers that deliver multiple TV channels with a live TV and programming experience. These are your traditional subscription services such as Comcast, Spectrum, and DirectTV and are also referred to as Linear TV. These services have existed since the late 1940’s, however in addition to Live TV, the majority now provide on demand content as well.
OTT is the overarching term that refers to internet delivered services that go around traditional delivery methods such as Broadcast, Cable, and Satellite television (or MVPD services). Netflix can be considered one of the first OTT services when it began in 1997.
CTV refers to any content that is delivered through an internet connection through devices such as smart TV’s, gaming consoles, mobile, and tablet applications. CTV has a similar definition to OTT, however often advertisers and marketers use the term to only reference OTT concepts that appear on TV screens.
Free for users as they are ad supported with a Video on Demand experience instead of a Linear TV style live programming grid. Technically YouTube created this concept in 2005 even though it is an online computer-based experience rather than a TV screen-based experience.
Users pay a subscription fee to access advertisement free videos on demand. Examples are Netflix, Hulu, and Amazon Prime Video. Netflix and Hulu originated this concept in 2007 and many MVPDs soon copied the on-demand concept adding the additional service to their packages.
Similar to MVPD’s (Subscription based and live TV), the only difference is the delivery method being over the internet rather than traditional cable and satellite means. Examples such as Hulu+Live TV, YouTube TV, and Philo being one of the first to launch a service of this kind back in 2011.
The acronyms and definitions go on and on. Transactional Video on Demand (TVOD), for example, which originated in the late 1990s offers single use content in exchange for a one-time payment. Think Pay-Per-View boxing matches. Regardless of all the ad jargon out there, it’s more important to understand the above and distinguish the differences from FAST.
| Attribute | AVOD | SVOD | TVOD | FAST | MVPD | vMVPD |
|---|---|---|---|---|---|---|
| Live TV User Experience | ✓ | ✓ | ✓ | |||
| Ad Supported | ✓ | ✓ | ✓ | ✓ | ||
| Ad Free | ✓ | ✓ | ||||
| Video On Demand | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| User Subscription Fees | ✓ | ✓ | ✓ | |||
| No User Subscription Fees | ✓ | ✓ | ✓ |
To boil things down to its simplest terms, FAST is free for its users and provides a 24/7 linear programming experience with ad breaks.
Breaking Down the FAST Channel Ecosystem
The FAST ecosystem is extremely multilayered and when we talk about the providers, we can break things out into three categories.
These giants are at the top of the hierarchy with some examples being Pluto, Tubi, and Xumo. Each one of these services is owned by a major media company (i.e. Paramount, Fox, and Comcast) so they can rely on the unique content that their parent company produces, as well as offer programming from other unaffiliated providers.
These are large manufacturers such as Amazon and Roku which have launched their own FAST services (Amazon Freevee & Roku Channel). Additionally, every major Smart TV manufacturer such as Samsung, Vizio, and LG also have launched their own FAST style platforms preinstalled in their TV’s.
These can often be referred to as FAST Channels (instead of platforms), but not always. For example, Crackle is a stand-alone AVOD app that offers on demand movies for users, but they are not a FAST based platform because everything is on demand. However, Crackle also distributes their content to Media companies like Xumo in the form of a TV channel on Xumo’s platform as “The Crackle Channel”.
Another example is Cheddar News, which has its own stand-alone app in which viewers can watch their content and only their content. However, Cheddar is more known for being a FAST channel (rather than platform) and many of the major aggregators carry this channel.
And not to make things more complicated, but the FAST Channel’s web of content can be even more tangled. For example, Samsung provides its Samsung TV Plus FAST service preinstalled on their smart TV’s, but users can also download other major FAST apps such as Pluto TV or single provider apps such as Crackle.
A separate complication is that some SVOD/vMVPD services, such as Peacock, also offer an AVOD/FAST option to their customers. Peacock has 31 million total subscribers but only 13 million of those are paying subscribers. The free subs receive Peacock’s ad supported version which consists of on demand shows as well as 50 “always on” FAST channels.
This all leads to a common problem that we are hearing from consumers today. There are too many streaming services to choose from (also referred to as “choice fatigue”) and more importantly, how do I make sense of it all? The lines between AVOD, SVOD, and FAST services are certainly starting to blur as most of them intermingle all 3 business models.
FAST Channel Providers and Reach
Who are all these FAST channel companies?
We’ve compiled a list of the major ones and at the time of writing this article there are over 15 large companies operating on the FAST business model. We’ve researched the total number of FAST channels and subscriber counts as of 4th Quarter 2023. The total number of available channels is approaching 2000 compared to 500 available channels in 2020, and the estimated ad value was pinned at $4.5B in 2023 compared to $1.2B in 2020
| Platform | Channels | Subscribers |
|---|---|---|
| Roku | 447 | 80,000,000 |
| PlutoTV | 366 | 80,000,000 |
| Tubi | 240 | 74,000,000 |
| Freevee | 336 | 65,000,000 |
| LG Channels | 284 | 50,000,000 |
| Xumo Play | 330 | 40,000,000 |
| Redbox | 180 | 40,000,000 |
| Samsung TV+ | 265 | 30,000,000 |
| Vix | 108 | 25,000,000 |
| Vizio Watchfree+ | 286 | 18,000,000 |
| Peacock | 50 | 18,000,000 |
| Plex | 456 | 16,000,000 |
| Local Now | 467 | 15,000,000 |
| TCLtv+ | 200 | 15,000,000 |
| Stirr TV | 100 | 10,000,000 |
| Google TV | 800 | 8,000,000 |
| Sling Freestream | 371 | 2,100,000 |
Advertising on FAST Channels
FAST Channels are similar in nature to Linear TV, both providing an “always on”, 24/7 style programming experience. They each have searchable menu guides and programming grids containing hundreds of channels catering to various demographics, and they both have your traditional in program ad breaks that are usually non skippable. However, media buying is extremely different than how you would approach Linear TV and is bought through digital means in a programmatic way.
With Linear TV a media buyer will purchase directly from the TV Stations and Media Groups in the form of upfronts, scatter, or remnant buys. Purchase contracts are on the TV channel level either bought within Program or on a Daypart Rotation. Buyers typically use in-house data, station rate cards, and Nielsen audience data to plan media. They can also work in guaranteed impression delivery or preemptable lower rates through their negotiations.
FAST operates much like digital media buying by targeting audiences to deliver ads to a household/individual level across all channels available. However, much like Linear, there are TV Channel and In-Program ways to buy FAST as well, so the options are versatile. Media Buyers typically work within a Demand-Side Platform (DSP) to plan, bid, and execute their ad campaigns but there are also ways to buy Channel direct. Buyers typically bid with a Cost per Thousand (CPM) metric that can range anywhere from $5 to $50+ dollars. For example, if a Buyer places a $10 CPM bid, they will pay $10 for every 1000 ads served.
Let’s look at the other media buying benefits of FAST that differentiate it from traditional methods:
- Personalized Targeting on Hundreds of Demographical Data Points
- Localized Targeting Capability
- Bidding System to Control Budgets and Cost Efficiencies
- Ability to Control Frequency to Limit Ad Fatigue
- Retargeting the Funnel Beyond FAST Abilities
- Greater Data Attribution for Improved Measurement on ROI
- High Automation and Optimization Abilities
FAST Channels are Growing…Fast
The benefits of FAST TV along with the downsides of Linear TV and other Streaming business models are shaping up for an optimistic future. Let’s break down that list again:
FAST
- No Subscription Fees
- No Registration Required (some)
- Massive Channel List & Content Library
- Live Programming & AVOD Included (most)
- Program & Targeting Based Advertising Options
- User Acceptance of Non Skippable Ads for Free Service
- International Reach (some)
MVPD, SVOD, & AVOD
- Expensive Subscription Fees
- High Churn Rates
- Limited & Fragmented Content
- No Live Programming (SVOD & AVOD)
- Non Targeted Advertising (MVPD)
- Non Skippable Ads for a Fee (MVPD)
- Territory Restricted (most)
The number of streaming options available has grown overwhelmingly, leading to “choice fatigue”, and hitting the consumer’s pocketbooks. The FAST model solves this problem with ad supported free live TV and on demand content, and studies have shown that 57% of consumers are willing to watch ads to save money on their multiple streaming subscription costs.
For the advertiser, and especially the brands that have global reach, the landscape is not bounded by territory lines in many cases. Pluto, Roku, and Tubi already have a significant global presence and the FAST Channel expansion is estimated to increase by 300% over the next 5 years in some European and South American countries.
Additionally for the advertiser, the media buying capability resembles a more digital model with abilities to hyper target audiences, demographics, and local based targeting options.
Summing it Up
Streaming subscription services changed the way people watch TV by providing on demand content. But that landscape has once again changed with FAST Channel services allowing viewers to circle back to a live programming style TV experience. What’s even more exciting is that the fate of MVPDs, SVODs, and FAST Channels is in the hands of the viewer and the services they prefer. Surely media companies and platforms will continue to adapt their offerings to follow the data and trends so expect future changes.
Brands should be giving considerate thought to incorporating FAST Channels into their advertising budgets if they haven’t already. As we discussed, the viewers on these platforms are highly receptive to advertisements as opposed to other disruptive experiences we see on SVOD & AVOD models. They have accepted the barter of sitting through non skippable ad breaks in return for a free TV service. The audience numbers are experiencing high YoY growth, poaching viewers away from traditional MVPDs as well as gaining supplemental new local and global users.
E2 Marketing Solutions offers marketing consultation and specialty services for brands and agencies. If you are looking for more information on the FAST Channel landscape, or how to execute FAST ad campaigns, contact us today!