FAST Matures for Advertisers, Creator, Viewer

Content Insider #973 – Feasting

Source – “Birds of Prey,” Warner Bros.

“I’m telling you, if you want boys to respect you, you have to show them that you’re serious. Blow something up. Shoot someone. Nothing gets a guy’s attention like violence.” —Harley Quinn, “Birds of Prey,” Warner Bros., 2020

We don’t really care if Ted (Sarandos), Netflix co-CEO, had his fingers crossed behind his back or not when he reassured theater owners that the company would maintain the 45-day theatrical window when he triedto wrap up the WBD deal. (It would have taken years before lawyers/legislators were finished).

We’re still not going to a movie house unless it’s…we’re not exactly sure.

And the one thing that is certain is that regardless of whether they keep HBO as a separate SVOD (profit center) or merge it with their service (highly unlikely), they will raise their subscription fee(s)!

In addition, when/if we finally see the film, it will be “new.”

Cripes, France enforces a staggered release schedule that can take up to 15 months – theater first, then pay TV and finally streaming and that was reduced because it used to be 36 months.

Source – Reddit

Besides, if we actually watched every movie/show we said we’ve just gotta watch, we’d become one with our couch.

That’s a real challenge since the global industry produced more than 9,500 films last year.

Yes, we like to watch the new video stories too but there are only so many you can watch without your eyes getting bleary and your behind blistered.

Source – Luminate

Shrinkage – The development of new TV shows has steadily shrunk across all platforms but hopefully, SVOD and free services will experience at least a modest return to growth in coming years.

Eventually, we’ll grab the flick at home. When/where will be determined by how the subscription fees go up as all of the streamers reduce the number of projects they greenlight and look to increase income from subscribers–either with the SVOD fee or the fee plus ad revenue.

You probably haven’t noticed, but even Netflix has cut back on their projects. Instead of doing what they do best with the viewer data they have, they’re focusing on projects that travel well globally and reducing churn by adding games, social video and specialty sports.

One of the few things Netflix (and the rest of the streamers) got wrong was they thought folks were cutting their cable bundles in droves because they despised ads. Okay, we know a couple of people like that, but it was really the cost–especially since the volume of anytime, any screen, anywhere content was available at a very reasonable cost.

Ironically, once people gave up the day/time pay TV for the overabundance of streamers and shows/movies, the biggest complaint people had was the frustration of trying to find something to watch (an average of 10.5 minutes).

Fifty percent of users say that’s too much time because the sheer volume of available content – more than 2.7M titles – is overwhelming.

We usually end up watching something the streamer recommends based on our viewing habits. And honestly, Netflix probably has the best AI-driven recommendation engine. We’re seldom disappointed.

We’re just hoping Tubi and Pluto take an AI hint from Netflix and beef up/enhance their recommendation tools because then they would be unstoppable.

And look at our other AVOD service – Disney+.

Source – Hub Research

Well, we’re like a lot of families. We have kids and they like to watch the Mouse House’s stuff–a lot.

In addition, there are a lot of titles that are just sorta fun for the adults to watch again. You know, relive those “good ‘ol days.”

Of course, the kids are one reason we lose a lot of time with the family room TV.

The only Disney shortfall is the fact that their content discovery engine needs “a little” work and, when Bob Iger’s replacement gets onboard, we hope he or she will make it faster, easier (less frustrating) for people to find the project they’re looking for.

Again, a little hint…study the Netflix recommendation engine.

Source – Nielsen Med

Like everyone in the Gen Alpha/Gen Z crowd, people have also gotten into the habit of watching more and more of their video entertainment – including short stuff – on the home screen.

Despite the fact that Nielsen includes YouTube in the same class as other streaming services, we can’t shake the idea that it’s just a nice upgraded social video service…great for marketing to use to promote/explain products and an excellent opportunity for next-generation creatives to show/hone their talents.

And yes, it is a great place for filmmakers, talent and production folks to keep their names and talents in front of the folks who make the greenlight decisions.

The heck of it is, thanks to their parent’s – Google – techie teams, they have a lot of experience in making it easy and perhaps a little addictive – in “helping” people find something they want to watch and keep watching more until BAM! the screen time hours just fly by.

Source – Morning Consult

But the free-to-view content is also why people are increasingly trying–and liking–FAST entertainment options, especially in today’s uncertain economy.

In addition, they can make the move with enhanced shared revenue opportunities.

MrBeast and other creators such as Like Nastya, Gemma Stafford and others can combine their audience data with that of the FAST services and connected TV service to develop and jointly promote brand values while driving meaningful engagement.

Watching “a few” ads is a small price to pay for the over abundance of shows/movies that are available for more and more people.

The ads are typically 4-10 min/hr., which is a lot lower than the old pay TV ad load of 15-20 min/hr. That we all put up with for years.

It was the totality of the inflexible cable bundle being overpriced, their “take it or leave it this is the pile of crap you get” attitude and oh, by the way, here’s a crap load of lawyer, drug store product ads for you to watch.

That’s right, people (especially young people) want/expect choice and options…lots of options.

A steady flow of stuff to watch and a lot of variety at their convenience (especially with the younger crowd) not the “service’s,” channels or advertiser’s.

Or, as the younger crowd constantly says today; they want what they want, when they want it, and on the screen they’re closest to…right now!

And increasingly, some of us are willing to trade some of our viewing time with advertisers as long as the content costs less and yes, free is better yet.

The number and global distribution of FAST services is steadily advancing due in no small part because they are being integrated into broader streaming ecosystems.

Amazon moved Frevee’s free programming into Prime Video and the growing prominence of FAST hubs in smart TV screens – Vizio, LG, Samsung, TCL etc. – they come preloaded and ready for free enjoyment.

What consumers actually hated was the over-priced, inflexible cable bundle oligarchy, not linear TV, nor even the ads. Viewers (even younger audiences) want choice. They want a steady flow of stuff to watch.

Their first (second, third, and fourth) priority is the relevancy and depth of the content they get, not the format, nor the ad load.

The days of throwing whatever they can find, whatever they can license and throw ads around it is gone.

Folks used to look down on FAST services saying they only had “old stuff.”

Source – Gracenote Global Video

Misconception – The idea that if the service is free it must only have very old content isn’t exactly true and sometimes old is good/new.

It’s not true and, more importantly, people are realizing that they really liked some of the content they left behind when they cut the cord.

Netflix rode to the top of the leader board with Friends, The Walking Dead, The Sopranos, and other series. Other streamers followed with such series as The Wire, The Twilight Zone, Breaking Bad, The Office, The Boys, Better Call Saul and probably some of your favorites.

There’s also a large “niche” group who really enjoy stuff like The Price is Right, Wheel of Fortune, Jeopardy!, Family Feud, Let’s Make a Deal, The Traitors, Survivor, The Voice, The Great British Bake Off, Wipeout and other high-engagement staples that resonate with viewers in multiple countries.

Lots of people love to dig into libraries of shows like SVU, NCIS, Law & Order, Criminal Mind and It’s Always Sunny in Philadelphia. Sorry if we missed your faves.

Source – Warner Bros.

But free volume just won’t hack it.

Just as subscription streamers are cutting back on their content, free/ad-supported services are focusing on studying audience intention and building channels around themes.

Source – Gracenote Global Video

Top of Line – FAST services are adding shows/films that meet the majority and large viewer segments to keep pace with interest/demand.

With films people are even more particular and for Millennials plus enjoy revisiting movies that they loved in the old days and appreciate even more the second, third, fourth or whatever time around.

As for Gen Alpha, Gen Z solid creative work is great entertainment…regardless of age.

People aren’t just sitting in front of the screen and staring, they want films/shows with edge, a statement, a point of view and creative stories that make a statement.

Source – Parks Associates

More Than Free – Increasingly, people are understanding that free doesn’t mean limited viewing/entertainment options but a rich array of content to enjoy.

And FAST services are responding to their audiences with content that is more than just free.

As we noted, we can expect to see an increase in creator-led channels, lifestyle verticals and even some additions of brand-aligned projects that feel more like destinations.

The other big leap will be in live content – concerts, sports and even news – all selected and created around viewer data that will find a ready-made audience that wants to meet their entertainment consumption needs and stay for longer-periods.

Source – Digital TV Research

Growing Profits – As SVOD services continue to increase their subscription fees, FAST channels are attracting larger audiences and they are in turn developing enhanced advertising options to more effectively help advertisers and make them more profitable.

In the years ahead, SVOD services will place more of their focus on their ad-supported service as they reach the upper limit of subscription fee increases and see people transferring to ad-supported versions because they will realize the time vs. money is a worthwhile investment.

With the growing maturity and focus of FAST channels and content, the services will move to more recognizable brands, franchises and profitability.

They will become less of a free afterthought and more of a premium, intent-driven viewing option which will also be more attractive to advertisers including local, regional and specialized marketers.

To fill the gap, FAST platforms are strengthening their ad tech, refining their data partnerships and positioning themselves as reliable, brand-safe environments that are willing to work with and assist companies in refining their messaging.

They will also improve program guides (which will assist advertisers and viewers) and offer more flexible, meaningful advertising formats and options that meet the advertisers’ and audience’s needs and desires.

Advertisers will set aside even more of their budgets for the FAST platforms and the North American services will dominate the market with more than $9B this year and growing to more than $12B by 2028.

Internationally, the growth will be even more dramatic (starting from a low base) with revenue growth of more than 250 percent in the UK and 300 percent in Canada. Australia will see an expansion of 565 percent and growth of nearly 400 percent is expected in Mexico and 300 percent in Brazil.

Source – Warner Bros.

At the same time, FAST advertising is enjoying a major uptick in APAC and EMEA.

Personalized AI-enabled advertising is helping target down to the ZIP code level.

Overall, home/mobile viewers we’re certain will agree with Harley Quinn in Birds of Prey when she said, “Consider this your first lesson: paying is for dummies.”

After all, FAST services have gone beyond just content volume and are now meeting the needs of viewers, advertisers and content providers.

Free/interesting content and intelligent ads… yes, life is good!

Andy Marken – andy@markencom.com – is an author of more than 900 articles on management, marketing, communications, industry trends in media & entertainment, consumer electronics, software and applications. He is an internationally recognized marketing/communications consultant with a broad range of technical and industry expertise, especially in the storage, storage management and film/video production fields. He also has an extended range of relationships with business, industry trade press, online media and industry analysts/consultants.