Streaming experts say they expect that the looming recession will cause the streaming industry to merge more quickly into the lane where it is heading: Free ad-supported streaming television (FAST) for short. The FAST networks include Tubi, Amazon’s Freevee, and Pluto. Read the blog to learn about life in the FAST lance and how ad-supported streaming changes television.
The premium subscription streaming services scramble to increase ad-supported tiers to offset the slower-than-predicted growth and loss of subscribers (Netflix, Disney+). Dealmakers and industry players observe that FAST is stereotyped as a haven for a financially stumbling Gen Z audience to want dusty network reruns for free. It’s poised to integrate credentials to content into its mix without the hefty price tag.
Comcast Advertising report shows that the use of FAST has doubled year over year. In 2021 it increased from 8 to 18%; six out of 10 households with connected TVs or Smart TVs (traditional TV sets with interactive web and integrated internet features) have turned to FAST services or in combo with other streaming services.
Ad tech firms stated that data they get from streaming TV users is supercharging what a booming business is. TV ad spending is forecasted to increase by $21.2 billion this year, up from $15.2 billion in 2021.
Digital video ads increased by 21% in 2021; it’s forecasted to increase by 26% in 2022, and it is expected to reach $49.2 billion. Both Netflix and Disney were developing ad-supported tiers and posed to shake up the TV ad world.
Life in The FAST Lane: Ad-Supported Streaming TV Changed Dramatically
Undoubtedly free ad-supported streaming TV has changed dramatically. In 2020, the big media company to have FAST service included ViacomCBS, following its acquisition of Pluto. It’s joined by Fox, NBCUniversal, and Amazon, with Google soon adding FAST functions to Chromecast.
With FAST changing steadily, VIP+ has announced an updated version of the “Life in the FAST Lane.” The FAST is booming steadily; there are over 1,000 channels in the United States alone, versus 550 in 2020. The time is ripe for those with FAST knowledge and looking to understand it better and explore VIP+’s latest analysis.
FASTs as a Complement
It does not look as though many customers tapping FAST services like Xumo are using the streaming option to complement the OTT video options like AVOD and SVOD services. XUMO 70% of users are cord-cutters; however, the high percentages use SVOD services. Among Xumo users, around 77% subscribe to Netflix, 80% subscribe to Hulu, and the remaining 65% subscribe to Prime Video.
Meanwhile, Paramount has expanded its rollout of Pluto TV internationally, where it is partnering with local broadcasters for ad sales and local content support, including launches in Canada and the Nordics.
It made changes to its channel lineup for easier discovery and navigation, adding five new categories along with The Judge Judy Channel, Let’s Make a Deal, Jeopardy! and Wheel of Fortune.
Senior Director of Partnerships at Paramount+, Amanda Garcia, said in the Comcast report, “As consumers are searching for modes to watch the content they enjoy across a mix of services, FAST services have become a prior part of the media mix for awareness & acquisition, and targeted campaigns to super-serve targeted audiences.”
Advertisers Looking to FASTs
FAST represents a new way for advertisers to reach and engage more viewers and targeted audiences across different platforms. FAST provides unique opportunities to reach cord-cutters while they’re scrolling, discovering new content, and surfing channels. This might now be possible with free-ad services like Netflix or ad-supported on-demand services such as Crackle.
More advertisers are looking to put a budget into streaming and CTV. CTV accounts for around 63% of digital ad views in 2021. Around 1% began shifting investments to Connected TV advertising between one and three years ago. However, 50% began either less than a year ago (24%) or have not started at all (24%), which means many brand marketers are still figuring out or have reservations about how to reach consumers through CTV.
An eMarketer report shows that OTT ad spending is predicted to reach $19.1 billion and about $30 billion by 2024, showing 7% of all ad spending. CTV advertising was a beneficiary of pandemic trends and remained one of digital advertising’s fastest-growing channels. Linear TV declined in importance to advertisers as cord-cutting boosted, and programmatic CTV inventory became more available than ever before.
ConnectedTV Market is Increasing with FAST
CTV ad spending is increasing quickly, and each time we update the forecasts, we end up growing the estimates. In 2022 US CTV ad spending is forecast to increase from $17.44 billion to $19.10 billion. FAST is a growing ad-supported medium for viewers to discover and watch premium streaming content in an environment that mimics linear TV.
Comcast Advertising president James Rooke says as advertisers are looking to maximize their reach in an increasingly fragmented viewing landscape, FAST services are a helpful complement to traditional TV and AVOD streaming options as a piece of a holistic multi-screen media plan.
One of the surveys shows that, on average, 74.9% of TV audiences watch SVOD services, which is 5.33 hours per week. Whereas 59.3% watch AVOD services, 2.78 hours per week, and 45.2% watch FAST channels, 2.45 hours per week. It’s also found that 73.7% watch broadcast TV or traditional cable, averaging 8.3 hours per week.
As for FAST, advertisers see more value. The FAST has grown exponentially and overlaps a bit now with what traditional TV has to provide in terms of both audience and content. Advertising on FAST enables users to reach the targeted audience, and it’s a valuable complement to the TV budget.
New Frontier
The ad-supported streaming is increasing for many reasons, the obvious being the decrease in traditional TV and the corresponding growth in streaming. In Q2 2022, traditional Pay-TV providers (telcos, cable, and satellite) lost 1.94 million subscribers, resulting in a decline of 9%; MoffettNathanson forecasted its latest Cord-Cutting Monitor report.
Advertisers are turning to streaming video, whereas ad-supported services are taking off. Paramount’s Pluto TV has around 64 million monthly active users; the viewing hours grew by 50% last year.
Fox’s Tubi increased its viewing hours by 40%, while it has 40 million active users. Hulu’s 70% of its viewers are on an ad-supported plan; an HBO Max executive says “droves” of viewers are choosing the ad-supported plan it announced last year.
Advertisers are not following the eyeballs from linear TV but are also responding to industry changes that can hinder tracking on other platforms. On Apple’s iOS, apps need users’ permission to track the activity in other apps as it’s part of the app tracking transparency initiative.
Google plans to make cross-app tracking easier on Android and aims to phase out cookies in its Chrome browser next year, making it more difficult for advertisers to monitor individual users’ behavior. The boost of private search engines and web browsers is giving users ways to curb data collection on their devices.
With the potential for new privacy laws that further limit data collection, advertisers fear that they spend more to reach the targeted audience, so they are starting to experiment with different options. CTV ads are experiencing a natural reaction to the increased acquisition costs.
Join the Revolution: Experience the Future of TV with FAST Streaming
The rise of Free Ad-Supported Streaming Television (FAST) is revolutionizing the TV landscape, offering viewers a cost-effective alternative to traditional and subscription-based services. Platforms like Tubi, Pluto TV, and Amazon’s Freevee provide a wide range of free content supported by ads, attracting a growing audience amid economic pressures and changing viewing habits. This shift is not only beneficial for viewers but also for advertisers seeking targeted and engaged audiences.
As FAST continues to expand, integrating with other streaming services and innovating in content delivery, it is reshaping how television is consumed and monetized. Embracing FAST is essential for anyone looking to stay ahead in the evolving world of television. Whether you’re a viewer, advertiser, or content provider, the FAST lane is the future of streaming.
You can be part of this exciting journey with the FAST TV App. Download it today to explore a world of free, premium content and experience the future of television firsthand.
Frequently Asked Questions
Why is FAST growing in popularity?
FAST is growing due to a combination of factors including economic pressures, increased cord-cutting, and the appeal of free access to a wide variety of content. The looming recession and the high costs associated with traditional cable and subscription-based streaming services have driven many viewers to ad-supported options.
How does FAST benefit advertisers?
FAST provides advertisers with a growing and engaged audience, particularly among cord-cutters and those who prefer streaming over traditional TV. It offers unique opportunities for targeted advertising based on viewing habits and preferences.
What kind of content is available on FAST services?
FAST services offer a mix of content, including classic TV shows, movies, and even some premium content. Some services are expanding to include more premium and exclusive content to attract a broader audience.
Are there any major players in the FAST market?
Major players in the FAST market include Tubi, Pluto TV, Amazon’s Freevee, Fox’s Tubi, NBCUniversal’s Peacock (ad-supported tier), and services from ViacomCBS.
How has the advertising landscape changed with the rise of FAST?
The rise of FAST has led to a significant increase in TV ad spending. Digital video ads are seeing substantial growth, with a forecasted increase in spending due to the shifting viewing habits towards streaming.
How do FAST services integrate with other streaming options?
Many FAST services complement subscription-based services (SVOD) and ad-supported on-demand services (AVOD). Users often combine FAST with these other services to maximize their content options without incurring high costs.
How are traditional TV networks responding to the rise of FAST?
Traditional TV networks are adapting by launching their own FAST services or tiers, expanding their ad-supported content, and partnering with FAST platforms to reach wider audiences.