For the last few years, Free Ad-Supported Streaming TV (FAST) has explosively impacted the market. As subscription fatigue takes its toll, viewers enjoy the more lean-back viewing it can provide. FAST is essentially streaming “live” TV, without paying for a subscription, it allows users to choose from many channels and gives the impression of linear TV, with dynamically inserted ad breaks.
According to recent stats, more than half of the TV views in the US are from FAST platforms such as Pluto TV, Tubi and The Roku Channel. FAST is proving to be a more accessible option for people to watch some of their favorite TV shows, mainly from the archives being licensed to FAST channels. Omdia has predicted that by 2027 the FAST market will be generating more than $10 billion in annual revenue. Not only does this provide an opportunity for content owners to find new audiences for their shows, but also for advertisers to reach new segments. With subscription fatigue at an all-time high, could this be the way to give viewers a different outlook on their TV habits? However, have we been spoilt with the user experience of subscriptions, are FAST services doing enough to keep their consumers engaged?
The Perfect Background Noise
The subscription market is widely crowded, with a US household now having an average of four subscription services. Due to the saturation within the SVOD market, the growth has slowed down significantly. The rate of churn for streaming services is at 37% in the US and no signs of slowing down. As the cost of living is rising across the world, more consumers are turning to free, non-committal alternatives. According to a new report by Amagi, 67% of consumers said they would switch from SVOD to FAST to save on their TV expenses.
In a FAST environment, users can pick up and watch a program as they would on linear TV. Users seem to enjoy content without spending too much time deciding what to watch. In a recent survey, Pluto TV is most popular within the midweek compared to Netflix, meaning that the more relaxed viewing experience is more suitable for people when they are busy.
Too Much Choice, Too Little Personalization
Content is the way to attract people to your service, but the experience is the way to keep your audience. More channels are being added all the time; the Amagi platform saw a 99% growth in channels between 2020 and 2021, with an abundance of choices; how do you create loyal watchers?
Although viewers have been enjoying the more lean-back viewing, there’s still a challenge for FAST Services. Personalization. Audiences are used to the hyper-personalized experiences they have been exposed to with subscription services, an area that is still missing within Free Ad-Supported Streaming TV.
FAST creates a frictionless environment with no login required, which is the main issue that channel owners and platform providers face. As FAST becomes more popular and users’ behaviors become more complex across different devices, the problem of personalization will only increase. Although some services can offer personalization locally as users can opt-in to receive it, there are other ways to subtly personalize services, just like other streaming platforms, in which FAST services can provide unique experiences for their users.
Most users of FAST services start their journey with the EPG (Electronic Program Guide), showing the vast range of content readily available. One way providers can help users with that choice is by re-arranging their guide for each user based on their viewing behavior, so it’s personalized to their preferences. After a viewer has watched a certain channel or genre of program, for example, a comedy channel showing Friends’, their EPG will be rearranged to have comedy channels at the top and other channels showing sitcoms to be the first thing the user sees when accessing the guide. Creating an environment where users have their interests central to their watching experience will help drive more engagement on their channels and, in return, more ad impressions.
There is a great opportunity for content owners and streaming services to entice new audiences with some of their new shows by putting on earlier series on FAST channels and the later series on paid platforms. For example, Pluto TV has been used to promote Paramount Plus with shows like ‘StarTrek Universe’.
Not only is FAST proving a success for content owners, it also is for advertisers- according to LG Ads Solutions, nearly half of FAST channel viewers show a high TV ad receptivity. They have higher receptivity compared to linear TV because adverts can be more suited to the content and, therefore, more suited for the audience. Even further, if done correctly, advertisers can build deeper, personal segments based on an entire user content profile and increase their ROI. Targeted ads that are used on FAST channels generate five to ten times more revenue than regular, non-targeted ads.
How to add value to your FAST Service
XroadMedia offers real-time personalization that breaks down some barriers for players within the FAST space. We assist in creating personalized experiences through EPG re-sorting, channel personalization or offering our ad decision engine to serve the right ads to the right people. Using personalization helps content owners and advertisers get more out of their content by ensuring it is seen by those people who want to watch it the most.
Our cloud-based solution is flexible and can be managed to meet any business rules, so you can still offer users the most personalized experience within FAST but at the same time keep your stakeholders, such as content owners, advertisers and your shareholders, happy. All of the first-party data utilized to generate individual experiences and enhance your users’ profiles are anonymized. Overall this helps you drive larger audiences for your targeted segments. If you are offering advertisers an audience based on the relevant characteristics of the program they are currently viewing, we can also provide a list of all current users who may be watching something different at that moment but who is also a high match for the audience segment you are selling to.
If you want to understand more about how XroadMedia can positively impact your FAST service, no matter where you are in the ecosystem, then please get in touch today.