Free Opens Opportunities for Services, Creators, Consumers

Content Insider #939 – Budget Easers Faster

By Andy Marken – andy@markencom.com

                       
“There is another theory: that two states continue to exist … separate and decoherent from each other, each creating a new branch of reality … based on the two outcomes. Quantum decoherence ensures that the different outcomes … have no interaction with each other.” – Hugh, “Coherence‘, Bellanova Films, 2014.

For folks in the US, cutting the cable TV bundle wasn’t/isn’t done on impulse. It’s more an act of rebellion
against paying $100 plus for a big bundle of channels very few folks ever watched.

At the same time, they just got tired of sitting through 20 minutes of ads an hour–especially when the Brits pay 22 pounds (roughly $30 US) for their bundle and endure only seven minutes of ads per hour.

The neat thing is that the British ads are far less intrusive, and it’s a totally different kind of video content.

US networks steadily cut back on scripted – more expensive and arguably more creative-content to stuff that is cheap to make – game shows, “reality/unscripted” stuff.

There’s a reason the TV set in the US is referred to as an idiot box rather than the news, information, entertainment central. Instead, the British viewer gets great documentaries and shows with depth, complex narratives.

Most other countries’ services follow similar entertainment practices.

But we’re past those “minor” issues because we moved to streaming entertainment … what we want, when we want, on the screen we want … once we find what we want.

It’s relatively easy to spend a third of your viewing time going from one streamer to another in your entertainment search or, let the first service you click on suggest stuff you’ll probably be interested in based on their experience with you.

According to Deloitte’s latest Digital Media Trends report, over 84 percent of households have at east one SVOD subscription and the average household has 4.1 services, paying about $69/mo.

To solve that issue for our household, we lowered our monthly entertainment bill by moving to ad-supported options where they were available.

Like many folks, we felt watching a few ads (typically 3-5 min/hr).) for a discounted subscription fee was a fair trade.

Of course, as one of our “ads never” friends constantly reminds us, “That low ad-supported rate was only to get you in and encourage you not to switch back and forth between services. And once they’re growth phase is over, you know they’ll increase the subscription fee and … the number of ads. It’s in their DNA.”

Yeah, we know they just can’t seem to help themselves and we’ll visit that issue when it comes.

Then there’s Amazon Prime for the wife’s free shipping and yes, Prime Video is already upping their ad count, and they dropped FreeVee because Bezos had to pay for his garish wedding.

Still, all of the big streamers – Netflix, Disney+, Max, Paramount +, Peacock, Amazon Primeand Apple 

TV+ – have diminished their value proposition over time (and it continues) a combination of price hikes, slimmer libraries of movies and TV shows.

Fortunately, there are other options in town that make free streaming even freer.

Pluto TV (now owned by Viacom) and Tubi (now owned by Fox) launched their FAST (free ad-supported streaming TV) in 2013 and 2014 respectively.

In addition, new services are emerging in the UK, Canada, Germany as well as SEA, Africa, Australia and New Zealand with more than 2,000 – and growing -channels available. When they first launched, FAST services suffered from a common criticism – reruns of old TV shows and older movies adding almost anything they could to build library volume.

Figure 6

While a lot of that content is still available, Nielsen Gracenote reports that more than 70 percent of the content available today is less than 15 years old (post 2010).

An important note here for indie filmmakers and folks who enjoy projects they may never see on Netflix is that the services are actively interested in considering and working with independent filmmakers in every genre – anime, westerns, new wave, popcorn horror, documentary, reality, you name it – assuming it’s well done and in good taste.

The platforms won’t go so far as to underwrite the cost of productions yet, but they aree increasingly considering exploring co-produtions with established studios as well as strategic distribution deals across multiple channels to minimize the indies’ risks and maximize their reach and monetary return.

The best thing we like about our FAST services (we alternate between Pluto TV and Tubi since there’s none of that intrusive sign-up process required) is getting back the one thing we missed when we cut our cable bundle–local news shows.

Local stations and networks realize that traditional bundle TV viewership is shrinking and most – if not all – have developed relationships with the major FAST services giving viewers access to the 6 o’clock news at 6 as well as other local, regional and national program/show coverage.

Before you ask; yes, they do air with the same volume of redundant ads.

According to Gracenote, 40 percent of live viewing is typically done on FAST services – 53 percent of ages 18-34 years old, 47 percent of ages 35-49 and 29 percent of the 50+ crowd.

It’s a way for them to hang onto the cash flow while easing into tomorrow since the vast majority of ads are still on linear services.

Of course, there are folks out there–usually older folks –who hang onto their pay-tv bundle so they can watch out of habit or they are firmly committed to watching “their” sports.

It’s tough to break bad habits but FAST services are trying …

Tubi – thanks to its Fox ownership – added last year’s Super Bowl and more recently WWE, Fox Sports, World Cup and other sporting events to suck in more viewers to their service.

Even though that might sound like a complete viewing service for folks, Hub Research found that more than 80 percent of FAST users also subscribed to more than three SVOD services.

So, the in and out of one service after another continues to be a frustrating exercise for most folks and a frustration for subscription services.

Naturally, there are folks out there who promise to relieve you of these frustrations.

Yep, the consumer electronics folks have stepped in to provide the solution which they like to pitch as the definitive entertainment and control center for all of your smart home … the connected TV.

All of the TV set manufacturers – Samsung, LG, Hisense, Vizio (Walmart) – have introduced their easy-to-connect, easy-to-use solution that can make your home easier to live with because it can also connect to and manage your vacuum, thermostat, stove, refrigerator, garage door, security system.

Of course, they can also gather – and use – all of your home’s and family’s data and activities and the age/use of your appliances, etc., which is just a little creepy.

The self-serving findings are part of the AVOD’s proprietary report, “The Stream 2025: Audience Insights Shaping Streaming,” conducted with The Harris Poll to analyze the streaming behaviors of 2,502 U.S. adults, who stream at least one hour a week, in an online survey from Oct. 21, 2024, to Nov. 1, 2024, and how marketers can reach these audiences amid the shifting entertainment landscape.

Almost 60 percent of respondents said they stream TV and movies for 1-3 hours in one sitting, and 38 percent said

In addition, advertisers have no idea where their ads run other than some vague genre reference and content owners have little visibility into who’s watching their shows, where they live, when they watch and which shows are most popular.

Yeah, it’s a crap shoot.

The challenge facing FAST services is similar to what studios and networks had when they rushed into the streaming market following the successes of Netflix and their tech-based counterparts.

They have movies and shows and increasingly, they are gaining the audiences.

What they lack is data.

From the outset, Netflix and the everything-for-everyone service – Google’s YouTube – have controlled their own destiny with delivery tools and measurement and creative formats so they understood the fundamentals surrounding the content that was created, developed and distributed.

In addition, they developed detailed profiles (which they aggressively protected) of viewers, what programs they watched and how long they watched them, times of day viewed, genre variances and similar information. It helped them and their creative partners develop shows and movies that would build interest and keep viewers interested/involved.

So, when Netflix finally made the move to a lower-cost ad-supported service, they could accurately and effectively assist (and educate) advertisers in the value of reaching interested viewers rather than a big bunch of people.

The result – and one FAST services are working toward – was more meaningful, less intrusive/dull ads and a
more receptive audience.

A win for the FAST service … a win for marketers … a win for the viewer.

With around 1.8B global video streaming subscriptions recorded this year, and a user penetration of less than 20 percent, there are plenty of opportunities for FAST services in the years ahead — especially as they are in a better position to show their value to marketers and viewers.

Statista estimates that the FAST market will reach $11.7B in revenues this year and exceed $17B by 2030.

The key to the future is focusing on high-quality content that will attract and retain viewers (including news/sports) and improve their ability to show marketers and viewers that there is value (and opportunities) in free video content.

At the same time, the content services can improve their value to both parties by ensuring they don’t abuse viewers with too many ads, so they don’t feel they’ve returned to the “good old” pay-tv days … or worse.

Today, consumers have a better understanding of the options they have available to them. If they feel FAST services are abusing the relationship, they will probably respond as Mike did in Coherence, “If we’re collapsing right now, I’m gonna collapse on them. I’m not gonna wait for them to collapse on us..”

With the growing number of privacy regulations and third-party cookies leaving the scene, FAST services can strengthen their position by helping marketers craft ads that align with what the viewers are watching, driving higher engagement and delivering a more satisfactory return on investment for everyone.

Today, consumers have a better understanding of the options they have available to them.  If they feel FAST services are abusing the relationship, they will probably respond as Mike did in Coherence, “If we’re collapsing right now, I’m gonna collapse on them. I’m not gonna wait for them to collapse on us..”

With the growing number of privacy regulations and third-party cookies leaving the scene, FAST services can strengthen their position by helping marketers craft ads that align with what the viewers are watching, driving higher engagement and delivering a more satisfactory return on investment for everyone.

Source – worldhealth.net

There’s a reason the TV set in the US is referred to as an idiot box rather than a news/information/entertainment central.

Instead, the British viewer gets great documentaries and shows with depth and complex narratives.

Most other countries’ services follow similar entertainment practices.

But we’re past those “minor” issues because we moved to streaming entertainment … what we want, when we want, on the screen we want–once we find what we want. 

It’s relatively easy to spend a third of your viewing time going from one streamer to another in your entertainment search or let the first service you click on suggest stuff you’ll probably be interested in based on their experience with you.

According to Deloitte’s latest Digital Media Trends report, over 84 percent of households have at least one SVOD subscription and the average household has 4.1 services and pays about $69/mo.

Figure 3

Source – nScreenMedia 

While the cost is significantly less than what they were paying for their cable bundle, 47 percent still feel they’re paying too much.

To solve that issue for our household, we lowered our monthly entertainment bill by moving to ad-supported options where they were available.

Like many folks, we felt watching a few ads (typically 3-5 min/hr.) for a discounted subscription fee was a fair trade.

Of course, as one of our “ads never” friends constantly reminds us, that low ad-supported rate was only to get you in and encourage you not to switch back and forth between services.  And once they’re growth phase is over, you know they’ll increase the subscription fee and … the number of ads. It’s in their DNA.”

Yeah, we know they just can’t seem to help themselves and we’ll visit that issue when it comes.

We’re still paying full price for Apple TV + because our daughter would “simply die” without all of her Apple One services and yes, we enjoy some of them too–the music, the Apple TV movies, news and Fitness +.

Then there’s Amazon Prime for the wife’s free shipping and yes Prime Video is already upping their ad count, and they dropped FreeVee because Bezos had to pay for his garish wedding.

Still, all of the big streamers – Netflix, Disney+, Max, Paramount +, Peacock, Amazon Prime and Apple TV+ –have diminished their value proposition over time (and it continues) with a combination of price hikes and slimmer libraries of movies and TV shows.

Figure 4

Source – NYTimes

Figure 5

Source – Omdia

Fortunately, there are other options in town that make free streaming even freer.

Pluto TV (now owned by Viacom) and Tubi (now owned by Fox) launched their FAST (free ad-supported streaming TV) in 2013 and 2014 respectively.

They are emerging in the UK, Canada, Germany as well as SEA, Africa, Australia and New Zealand with more than 2,000 – and growing – channels available.

When they first launched, FAST services, they suffered from a common criticism – reruns of old TV shows and older movies plus adding almost anything they could to build library volume.

Figure 5

Source – Omdia

While a lot of that content is still available, Nielsen Gracenote reports that more than 70 percent of the content available today is less than 15 years old (post 2010).

Source 6

Source – Gracenote

Figure 7

Source – NoFilmSchool

Figure 8

Source – BroadbandTV

Figure 9

Source – Hub Research

An important note here for indie filmmakers and folks who enjoy projects they may never see on Netflix is that

the services are actively interested in working with independent filmmakers in every genre – anime, westerns, new wave, popcorn horror, documentary, reality, you name it – assuming it’s well done and in good taste.

The platforms won’t go so far as to underwrite the cost of productions yet, but they are increasingly exploring co-productions with established studios as well as strategic distribution deals across multiple channels to minimize the indies’ risks and to maximize their reach and monetary return.

FAST services are giving viewers access to the 6 o’clock news at 6 as well as other local, regional and national program/show coverage.

According to Gracenote, 40 percent of live viewing is typically done on FAST services – 53 percent of ages 18-34 years old, 47 percent of ages 35-49, 29 percent of the 50+ crowd.

It’s a way for them to hang onto the cash flow while easing into tomorrow since the vast majority of ads are still on linear services.

Of course, there are those folks out there – usually older folks – who hang onto their pay-tv bundle out of habit or they are firmly committed to watching “their” sports.

It’s tough to break bad habits but FAST services are trying …

Tubi – thanks to its Fox ownership – added last year’s Super Bowl and more recently WWE, Fox Sports, World Cup and other sporting events to suck in more viewers to their service.

Even though that might sound like a complete viewing service for folks, Hub Research found that more than 80 percent of FAST users also subscribed to more than three SVOD services.

So, the in and out of one service after another continues to be an exercise for most folks and a frustration for subscription services.

Naturally, there are folks out there who promise to relieve you of these frustrations.

Yep, the consumer electronics folks have stepped in to provide the solution which they like to pitch as the definitive entertainment and control center for all of your smart home … the connected TV.

Figure 10

Source – Connected TV Association

Figure 10

All of the TV set manufacturers that have introduced their version of the smart/connected TV – Samsung, LG, Hisense, Vizio (Walmart) – have introduced their easy-to-connect, easy-to-use solution that can make your home easier to live in.

In addition to being a source for all of your entertainment, the sets can also connect to and manage your vacuum, thermostat, stove, refrigerator, garage door and security system.

Of course, they can also gather – and use – all of your home and family’s data, activities, age/use of your appliances, etc., which is just a little creepy.

In addition, they’re all still sticking with their own operating systems which makes it “a little difficult” to change screen manufacturers down the road.

It’s another issue for … later.

But right now, FAST services have a more pressing issue – building a profitable business.

Advertiser Education/Proof

FAST services have a core group of linear channels and on-demand libraries creating a quasi-economy of scale which advertisers can understand because it is similar to CPM (cost per million) in the older pay-tv days.

The challenge is that a lot of those FAST channels and on-demand libraries only get a couple of viewers per week and almost no ads while others get 10s of thousands and plenty of ads.

Fig 11

Advertisers have no idea where their ads run other than some vague genre reference. In addition, content owners have little visibility as to who’s watching their shows, where they live, when they watch and which shows are most popular.

Yeah, it’s a crap shoot.

The challenge facing FAST services is similar to what studios and networks had when they rushed into the
streaming market following the successes of Netflix and their tech-based counterparts.

Figure 12

They have movies and shows and increasingly, they are gaining the audiences.

What they lack is data.

From the outset, Netflix and the everything for everyone service – Google’s YouTube – have controlled their own destiny with delivery tools, measurement and creative formats so they understood the fundamentals surrounding the content that was created, developed and distributed.

In addition they developed detailed profiles (which they aggressively protected) of viewers, what programs they watched and how long they watched them, times of day viewed, genre variances and similar information that helped them and their creative partners develop shows/movies that would interest and keep viewers interested/involved or, when Netflix finally made the move to a lower-cost ad-supported service, they could accurately and effectively assist (and educate) advertisers in the value of reaching interested viewers rather than a big bunch of people.

The result – and one FAST services are working toward – was more meaningful, less intrusive/dull ads and a more receptive audience for those ads.

It’s a win for the FAST service … a win for marketers … a win for the viewer.

Figure 13

With around 1.8B global video streaming subscriptions recorded this year and a user penetration of less than 20 percent, there are plenty of opportunities for FAST services in the years ahead – especially as they are in a better position to show their value to marketers and viewers.

Statista estimates that the FAST market will reach $11.7B in revenues this year and exceed $17B by 2030.

At the same time, the content services can improve their value to both parties by ensuring they don’t abuse viewers with too many ads, so they don’t feel they’ve returned to the “good old” pay-tv days … or worse.

Figure 14

      Source  Bellanova Films

Today, consumers have a better understanding of the options they have available to them. And if they feel FAST services are abusing the relationship, they will probably respond as Mike did in Coherence, “If we’re collapsing right now, I’m gonna collapse on them. I’m not gonna wait for them to collapse on us.”

With the growing number of privacy regulations and third-party cookies leaving the scene, FAST services can
strengthen their position by helping marketers craft ads that align with what the viewers are watching, driving
higher engagement and delivering a more satisfactory return on investment for everyone.

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.
An internationally recognized marketing/communications consultant, he has a broad range of technical and
industry expertise especially in 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.