The Free Ad-Supported Streaming TV (FAST) channel market has seen remarkable growth in recent years, with consumers gravitating toward free, accessible content. As a content provider, choosing the right business model is crucial to growing your audience and ensuring profitability. The linear and ad-based streaming model offers a powerful solution for driving revenue and enhancing user experience in the FAST channel landscape. Here’s what a Liner OTT and Ad-based streaming model is, why it’s worth it for the FAST channel, and how it differs from Linear TV.
What is Linear OTT?
Linear OTT (Over-the-Top) refers to the streaming of scheduled, real-time content over the Internet, similar to how traditional linear TV works but without the need for cable or satellite services.
OTT platforms deliver content directly to viewers via the Internet on a variety of devices, such as smart TVs, smartphones, laptops, and tablets. Unlike on-demand services (where viewers select what to watch and when), linear OTT follows a predetermined schedule, just like traditional broadcast TV.
What is the Ad-Based Streaming Model?
The ad-based streaming model is a business model used by streaming services to deliver content to viewers for free or at a low cost, with revenue generated from advertisements shown during the content. This model is common in Free Ad-Supported Streaming TV (FAST) platforms and some video-on-demand (AVOD) services.
It’s a popular alternative to subscription-based models (SVOD) like Netflix, as it allows viewers to access content without paying upfront fees, in exchange for watching ads.
The ad-based streaming model has proven very beneficial to platforms like Pluto TV, Freevee, and the Roku Channel; they offer content in exchange for watching ads just like traditional TV does. There are various benefits of the ad-based streaming model for FAST, let’s explore expert advice on the same:
Key Features of the Ad-Based Streaming Model:
- Free or Low-Cost Content
- Advertisements as the Primary Revenue Source
- Targeted and Personalized Ads
- Interruptive Advertising
- Pre-roll ads: Shown before the content starts.
- Mid-roll ads: Inserted during natural breaks in the content (e.g., in the middle of a movie or show).
- Post-roll ads: Played after the content finishes. This mirrors the traditional TV commercial experience but can be more targeted and often shorter.
- Scalable Revenue
How Linear OTT Surpasses Traditional Linear TV?
Linear OTT (Over-the-Top) streaming surpasses traditional linear TV in several key ways, driven by its flexibility, accessibility, and data-driven capabilities. Here’s how linear OTT excels beyond the limitations of traditional TV:
| Feature | Traditional Linear TV | Linear OTT |
| Content Delivery | Delivered via cable or satellite services. | Delivered via the Internet (Over-the-Top). |
| Access Flexibility | Viewers are limited to specific time slots. | Offers both scheduled programming and often on-demand access. |
| Global Accessibility | Geographically restricted by region, it requires specific hardware. | Accessible globally on any internet-enabled device. |
| Device Compatibility | Requires a television and often a set-top box. | Compatible across devices like smart TVs, phones, tablets, and PCs. |
| Ad Targeting | Broad, non-targeted ads are shown to all viewers. | Targeted ads based on viewer data, preferences, and demographics. |
| Viewer Cost | High cost, often bundled with unwanted channels. | Free or low-cost (often ad-supported), with flexible pricing models. |
| Personalization | No personalization—same content for everyone. | Personalized recommendations based on viewing history. |
| Interactivity | No interactive features; passive viewing experience. | Interactive features like live chats, polls, and clickable ads. |
| Analytics & Insights | Relies on Nielsen ratings and estimates, often not real-time. | Real-time, detailed analytics on viewer behavior and engagement. |
| Content Variety | Limited to popular channels and genres. | Wide variety of niche channels catering to specific interests. |
| Agility in Programming | Changes to programming schedules are slow and inflexible. | Agile, with quick updates and real-time adjustments to schedules. |
| Cost for Providers | High infrastructure costs for content delivery. | Lower infrastructure costs (internet-based delivery). |
| Viewer Experience | Linear, scheduled, with no flexibility or on-demand options. | Combines real-time linear streaming with the flexibility of on-demand. |
How Linear OTT and AVOD are Perfect Match?
As the streaming industry evolves, two distinct yet complementary models—Linear OTT (Over-the-Top) and AVOD (Ad-Supported Video on Demand)—are increasingly being seen as the perfect pairing for delivering diverse content while maximizing revenue.
Together, they create a powerful ecosystem that benefits both viewers and content providers by blending the best of live TV with the flexibility of on-demand streaming, all supported by advertising. Let’s explore why Linear OTT and AVOD make such an ideal match.
Seamless Content Delivery for All Viewing Preferences
According to an eMarketer report on linear TV viewing share, US adults spend around 23% of their media time watching linear TV. While the younger age group spends 9.2% on YouTube and 8.5% on Netflix.
Source: (eMarketer)
Linear OTT brings the traditional TV experience to the internet by offering real-time, scheduled content. Viewers can “tune in” to live streams of shows, sports, news, and events, just like they would with traditional TV, but with the added convenience of being able to watch from any device connected to the internet. This scheduled, live-streaming format appeals to viewers who enjoy real-time programming and the excitement of live events.
AVOD, on the other hand, complements this by offering on-demand content, allowing viewers to access a wide library of shows and movies whenever they want. Viewers can pause, rewind, or replay content at their convenience. This combination of live programming through Linear OTT and on-demand flexibility through AVOD caters to a broader audience, ensuring that everyone’s viewing habits are met, whether they prefer live events or binge-watching series at their own pace.
Revenue Generation Through Advertising
Both Linear OTT and AVOD thrive on the same advertising-supported model, making them a natural fit for content providers looking to generate revenue without charging viewers high subscription fees. According to a TechCrunch report, almost 1 in 3 US viewers turn to ad-supported TV streaming services.
Source: (Techcrunch)
In Linear OTT, advertisements are served in much the same way as traditional TV, with scheduled ad breaks during live broadcasts. This familiarity helps viewers easily transition from cable TV to OTT services, as they are already accustomed to seeing ads at regular intervals.
With AVOD, ads are dynamically inserted into on-demand content, either before, during, or after shows. The advantage here is that these ads can be more targeted based on viewer data, such as their watch history and demographics, making the ads more relevant and engaging. For advertisers, this means greater precision in reaching the right audience, while viewers receive content for free in exchange for short ad interruptions.
By combining Linear OTT’s live, scheduled content with AVOD’s targeted, data-driven ads in on-demand viewing, content providers can optimize their ad inventory, making every minute of streaming a revenue opportunity.
Cost Efficiency for Viewers
One of the major reasons why this pairing is so effective is that both Linear OTT and AVOD offer low-cost or free access to content. Platforms like Pluto TV or Tubi, which blend both models, allow viewers to watch a wide variety of content without paying subscription fees. This appeals to a broad segment of the population that is either unwilling or unable to pay for premium, subscription-based services.
Since the ad-based model supports both formats, it provides a sustainable way to deliver high-quality content to viewers at no or minimal cost, removing the financial barriers typically associated with premium streaming platforms.
Engagement and Ad Personalization
The ability of both Linear OTT and AVOD to collect and analyze viewer data makes them especially valuable for advertisers. With traditional TV, ads are broadcast to everyone, with little to no targeting. However, in the OTT environment, ads are tailored based on detailed viewer profiles, which are built using data from their behavior, preferences, and demographics.
Linear OTT allows ads to be inserted during live streaming sessions, where viewer engagement tends to be high, especially during live sports, news, or exclusive events. With AVOD, the flexibility to insert personalized ads into on-demand content means that every viewer can have a unique ad experience tailored to their interests. This targeted approach not only improves ad effectiveness but also enhances the overall viewer experience by reducing irrelevant or repetitive ads.
For content providers, this creates a highly efficient monetization strategy, driving up the value of each ad impression while ensuring that ads remain engaging for viewers.
Flexibility and Accessibility Across Devices
Both Linear OTT and AVOD offer viewers the flexibility to stream content on a variety of devices, including smart TVs, mobile phones, tablets, and laptops. Unlike traditional TV, which is limited to a fixed location (the TV set), OTT allows viewers to access live and on-demand content from anywhere, anytime, as long as they have an internet connection.
This flexibility makes OTT services far more convenient for the modern viewer, who often consumes content on the go or across different screens throughout the day. The seamless accessibility across multiple devices ensures that viewers are continuously engaged, whether they are watching a live event or catching up on a show later.
Scalability for Content Providers
For content providers, both Linear OTT and AVOD offer scalable models. As viewership grows, so does the potential for ad revenue. Since both models rely on internet-based delivery, the infrastructure costs are lower compared to traditional broadcast or cable TV. This scalability allows content providers to serve larger audiences with minimal added costs, making it easier to expand offerings and diversify content.
Platforms that utilize both Linear OTT and AVOD can attract a wider audience—those interested in live streaming as well as those who prefer on-demand content—while benefiting from multiple revenue streams.
Conclusion
The linear and ad-based streaming model is a natural fit for the FAST channel ecosystem. It offers a win-win situation: viewers get access to free, curated content, while channel operators and content owners generate consistent ad revenue. This model brings together scalability, flexibility, and revenue potential, making it the optimal choice for content providers looking to capitalize on the growing demand for free streaming entertainment.
By leveraging the linear, ad-supported approach, you ensure both profitability and a seamless, enjoyable experience for your viewers. To effectively implement this model in your streaming platform, we focus on developing a robust FAST TV app infrastructure, integrating advanced ad insertion technologies, and utilizing data analytics to optimize content and advertising strategies.
As you embrace this innovative model, you will not only meet the evolving needs of your audience but also create a sustainable revenue stream that supports the growth and success of your platform in the competitive streaming landscape.
FAQs About Linear and Ad-Based Streaming Models for FAST Channels
How does the linear and ad-based streaming model work?
This model combines scheduled, real-time content delivery (linear OTT) with ad-supported programming (AVOD). Content is streamed according to a predefined schedule, similar to traditional TV, while advertisements generate revenue. Viewers can enjoy free content in exchange for watching ads during their viewing experience.
What are the benefits of the linear and ad-based streaming model?
The model offers several benefits:
- Free Access
- Curated Content
- Revenue Generation
- Scalability
- Flexibility
What types of ads are used in the ad-based streaming model?
The ad-based streaming model typically employs:
- Pre-roll Ads
- Mid-roll Ads
- Post-roll Ads
How can content providers optimize their ad revenue with this model?
Content providers can optimize ad revenue by:
- Utilizing targeted advertising based on viewer data to enhance relevance and engagement.
- Analyzing viewer preferences and behavior to schedule ad placements effectively.
- Continuously refining content offerings and ad strategies based on performance metrics.
What is the future of FAST channels with this model?
The future of FAST channels looks promising, as demand for free, accessible content continues to grow. With advancements in technology, data analytics, and advertising strategies, the linear and ad-based streaming model will likely become an increasingly popular choice for both content providers and viewers, enhancing the overall streaming landscape.
Can advertisers track the performance of their ads on FAST channels?
Yes, advertisers can track the performance of their ads through various metrics, such as impressions, click-through rates, and viewer engagement. This data allows them to assess the effectiveness of their advertising campaigns and make necessary adjustments.