On the FAST Track

Amid SVOD woes, continued cord-cutting and challenging macroeconomic trends that are dampening global ad forecasts, FAST has emerged as a considerable bright spot for companies across the ecosystem, from distributors shoring up valuable additional revenues from library titles to AVOD platforms using FAST channels to deepen engagement to broadcasters and legacy pay channels eyeing a lucrative opportunity to reach viewers in a new (and yet old) way to the tech companies that have emerged to help everyone navigate this new space.

Beyond optimistic growth forecasts, the other aspect that makes FAST the buzzword of the moment is that there are lots of different ways to participate. If you have enough content, you can deploy your own channels. If you’re a linear pay-TV channel, you can look at FAST as a new way to expand your reach. SVOD operators, too, are using FAST channels as shop windows of sorts. And if you have high-quality back catalog to sell, there’s a good chance you’ll find a channel operator that wants some of those shows. The question then, of course, is if what you’re getting for that deal is worth the time and investment required.

For many companies of sizable scale, the FAST opportunity emerged early—back when these free ad-supported channels started streaming online via the likes of Pluto TV and Samsung TV Plus.

“There were opportunities for us to monetize our deep library of content that we wholly own around the world,” says Mark Garner, the executive VP and head of global FAST channels at A+E Networks (who some say coined the FAST moniker). “In this ecosystem of potential opportunities, we indeed saw FAST as a strong contender—and so very early on, we adopted a strategy. For A+E Networks, this made great sense, as we have a long legacy in curating entertainment brands and content. This was a natural evolution for us to extend our content and brands and create new channels, taking advantage of new business models, doing what we’ve always done but adjusting to shifting consumer habits and doing it well. Our perspective is we would do it better than anybody else.”

Fremantle, too, was early, extending the BUZZR brand for classic game shows, first rolled out in U.S. syndication, into FAST in 2019. “Year one was a good experience,” says Jens Richter, CEO of commercial and international. “In year two, we saw quite some traffic, and then in year three, we saw traffic and also revenues.”

BBC Studios unveiled its first U.S. FAST channel in 2020. “BBC Studios has a tremendous amount of content that has yet to be exposed to viewers, especially in North America,” says Sarah Shriver, VP of programming and marketing for FAST channels and VOD sales.

All3Media International also joined the fray early with the 2019 rollout of the So…Real channel in North America, tapping into its vast lifestyle and reality slate.

“It’s really about adding extra windows, adding value for distributors and bringing in new opportunities while also trying to make those channels something of a fan experience,” says Gary Woolf, executive VP of strategic development at All3Media International.

Banijay Rights has also been in the FAST space since 2019. “The catalog now is spanning 172,000 hours of content,” says Shaun Keeble, VP of digital. “We’re certainly looking at all of those IPs that may have already had market awareness or a presence in a first- or second-window run and then looking at a third- or fourth-window run in the FAST space.”

Mike Gould, the senior VP of digital at Cineflix Rights, observes: “A distributor of any scale needs to be in this space to some extent. There’s been so much growth, and it’s a significant revenue opportunity.”

SPI International has long been in the pay-TV channels business, so extending into the FAST space was a logical growth opportunity.

CHANNEL SAVVY
“I believe the future of the TV experience will be a hybrid: a combination of a vast VOD selection with a lot of verticals and genres as well as linear,” says Haymi Behar, chief marketing and digital officer.

SPI International has rolled out a suite of 200 Smart Channels sourced from its extensive library curated across key verticals. “People are experiencing choice fatigue,” Behar says. “When it comes to entertainment, we prefer that somebody makes those choices for us.”

And curation is indeed paramount; selecting the right brands, the right refresh rate and the right flow from one show to the next in order to create a schedule that will deepen engagement and limit churn.

As for what makes for a brand that can carry its own channel, it comes down to two factors, A+E Networks’ Garner notes. “You need to have enough volume to support a single-IP FAST channel. You have to have brand recognition and brand equity. It’s about generating an audience, so you can have thousands of episodes of something, but if nobody knows it, it doesn’t do anything for anybody. Volume, brand equity and discoverability are important.”

“Recognizable talent or IP supports a single-IP channel,” agrees Shriver. “There’s also the idea of building a genre channel and then using that as an incubator to see where the viewership is, where the monetization is, and then blowing that out as a single-series or even a dual-series channel. A lot of it depends on the number of hours per series. In the early days, you could get away with a channel with 75 hours. Now you need 250 hours; you have to keep it fresh. Otherwise, people will tune out.”

As Fremantle’s Richter notes, “It’s a game of the right shows, volume, scheduling and refresh rates. You need to constantly put something up, and then you have to think about engaging with your audience.”

On Cineflix Rights’ approach to scheduling its FAST channels, Gould notes: “We don’t want any two consecutive days to be the same, two consecutive weeks to be the same, two consecutive eight-hour periods to be the same. Each time a viewer visits the channel, even if it’s the same format they’re expecting to see at that time of day, we want them to see a different episode of that format. We tend to work to about a 25 percent refresh rate on the channel per month. That doesn’t mean 25 net new content to that channel forever, but at least it means that on a month-to-month basis, the general spread of content feels different. That is different for a single-IP channel—there’s much more acceptance from the user and the platforms for those to feel more repetitive.”

DUAL TRACK
Autentic is approaching FAST from both sides: as a channel provider and a distributor licensing content to third-party services. “One of the reasons for this is, to be quite frank, we don’t know which horse is going to run faster, and we are still learning about FAST,” says Patrick Hörl, founder and managing director. “If you just look at Europe, it’s difficult to say how much of a business this is and how the dynamics work. We are still trying to figure that out and have our hands in all pots possible.”

FOX Entertainment Group (FEG), meanwhile, is taking a slightly different approach, bringing its AVOD programming expertise via sister company Tubi and considerable library of TV movies to help international partners roll out their own services.

“TV movies are well designed for FAST channels,” says Tony Vassiliadis, executive VP of FEG and COO of MarVista Entertainment. “They have two important things: volume and similar themes. You’re not bouncing between various genres because you’re trying to create a destination in a specific theme with a particular affinity. We have several threads of TV movies in different genres, so we can help—whether that’s romance, thriller, true crime or holiday—design packages of content that will feed a FAST channel.”

Vassiliadis continues: “Our goal is not necessarily to launch a whole host of FAST channels; it’s to work with those launching FAST channels to provide content and leverage our expertise as an organization. Fox Corporation has FOX Entertainment, which programs a network, and Tubi, which has deep knowledge of content that works in the AVOD space. We can be impactful with international buyers in the FAST space by helping provide content tailored to AVOD.”

“Movies have always worked very well in VOD,” agrees Scott Kirkpatrick, executive VP of distribution and co-productions at Nicely Entertainment. “They’re very short, digestible pieces of media property. There’s not a massive time commitment. In the FAST space specifically, they work great because they can be programmed neatly into slots, and you can theme and bulk a lot of them together. Once audiences have a vertical or a type of genre they prefer, they can sit down with one channel, invest in it and find movie after movie.”

WHERE’S THE MONEY?
For content owners licensing to channel operators, a traditional license fee is the preferred model, “though we are increasingly analyzing where to pursue a rev-share, especially as we get into deeper relationships with some of these clients,” FEG’s Vassiliadis says. “We want to be committed partners in helping them grow their businesses in local markets. A license fee is great because it reduces our risk, but as FAST grows, we want to be on the cutting edge, looking at where we can create smart and unique partnerships with our clients where we both capitalize on the upside.”

For those building their own slates of owned-and-operated channels, there are a couple of models in use, Fremantle’s Richter explains. In a standard rev-share, “the platform monetizes the inventory, and you share with the platform the advertising revenues. The next level up could be a revenue-share model with the backfill rights. You, the channel provider, have the opportunity to sell idle, unsold inventory. Another model would be an inventory-share model. You have the advertising inventory around your show, and you share that inventory, the minutes of advertising spots, with the platform, and each side can sell individually. Then you can retain and keep the revenues you make from selling the advertising.”

What route you take depends on the market, A+E Networks’ Garner says. “Right now, with the ad market being challenged—hopefully not as challenged as we all thought it was going to be—different models make sense in different places for different reasons. Factors include the type of FAST platform, its technology, capabilities and what’s visible to us as a publisher and seller.”

MINING THE DATA
Data from platforms is essential, BBC Studios’ Shriver notes. “It’s hugely important for us to be able to have insight into performance so that we can make the best channel that we possibly can. It’s not about the secret sauce and trying to find out what’s happening on their platforms. It’s not second-guessing monetization. It’s truly about the metrics in our channels.”

Garner adds that A+E Networks’ FAST programming teams have long used traditional tele­vision ratings in making content decisions. “They understand the science of scheduling and audience generation. Data and near real-time visibility of content performance is, in some cases, much more readily available via FAST, so decisions can be made in a much more dynamic and timely way.”

“It’s almost taking the overnights and reflecting that against our programming decision-making, particularly against the genre-specific channels,” notes Banijay’s Keeble.

With FAST still in relative infancy, accessing and understanding all of that data, from disparate sources, can be a challenge. “We are looking at solutions to aggregate FAST data across all its sources,” says Kasia Jabłońska, head of VOD for EMEA at BBC Studios. “This…year will be, in many ways, about finding the right solution to do it.”

Garner agrees that the metrics situation needs improvement. “The FAST space is certainly challenged when it comes to data because of different viewpoints on what is shared and what should be proprietary. That said, we have the good fortune of having been in the business for 30-some years. We’ve sold content worldwide. We’ve aired it on linear. We’ve done it digitally. There is data that’s available to us in FAST. When you can take all of that and work with world-class research, analytics, marketing and programming teams, you get creative and figure it out. That’s not to say that we as an industry shouldn’t create greater availability and transparency of data; we should. In the interim, it’s about utilizing and being creative with what you have.”

The other hurdle for anyone getting involved in FAST is simply managing the deliverables.

“Every platform partner has their particular flavor, and they like it a very specific way,” Nicely’s Kirkpatrick says. “There’s a bit of a learning curve, and it does take some time and financial investment up front to place these things. Especially on the independent side, you need to do some cost/benefit to figure out which platforms are worth it and which ones aren’t, and it’s not always the best strategy to go with everyone, everywhere, all at once. It is sometimes smarter to take a step back for those specific reasons and say, we’re going to focus on these platforms, channels and outlets rather than go everywhere.”

“It’s much more complex in the FAST world than we as a company expected,” Autentic’s Hörl adds. “And it’s sometimes also frustrating to realize that there are so many different norms and standards between the platforms. This will be sorted out one day so that there will be one standard that probably applies to most of the platforms. But we are suffering because we have to deliver to various platforms with completely different standards.”

GLOBAL SCALE
The U.S. remains the most developed FAST market, but other territories are coming up quickly. However, given the steep learning curve and financial investment required, IP owners should be cautious when approaching opportunities in emerging territories.

“We have to be mindful about content, localization and cost,” Keeble says. “As distributors, we are going to be wearing those costs. We’ve seen significant opportunity in Asia, but we need to be mindful that while viewership may be high, advertising and the CPMs reflected may need to increase in the region.”

All3Media International’s Woolf agrees, noting: “High viewing and low ad revenue is disastrous because you’re paying for the bandwidth. You can have as many viewers as you want, but if the money’s not there, your channel is running at a loss. There are a lot of countries we could be doing something in, but the time is not quite right yet. Equally, the way dubs are licensed, if it’s not a production you own, you’ve either got to acquire them back from the local broadcaster or you’re creating new dubs. So it’s another layer of costs.”

It’s also a different set of players internationally, with some markets having a better free-TV landscape than others.

“There are well-developed, free-to-air channels and cheaper basic-cable services in Europe,” explains BBC Studios’ Jabłońska. “So, the FAST model has been developing slower. However, we do believe the model has turned the corner. Germany, the U.K., Italy, France and Spain will likely be the next major growth areas for FAST. In Europe, broadcasters and telcos will add FAST to the BVOD platforms.”

Woolf notes that some 70 channels are freely available to U.K. viewers via digital terrestrial, which is not the case in the U.S. “That also impacts how we program channels and what you think the role of FAST is as it comes into Europe as opposed to what FAST is in the U.S.”

Cineflix’s Gould adds: “The extent of [the U.S.] market share will probably drop over the coming years as some other big English-speaking markets come into the frame. FAST is a very local space. In many other regions, broadcasters have such a strong hold on users’ access to content in a way that was not quite the case in the U.S. It’s going to be interesting to see who else emerges.”

“The opportunity outside of the U.S. is tremendous,” says Garner at A+E Networks. “We are seeing the growth curves, which are similar to what the U.S. was two or three years ago. Outside of the U.S., those growth curves are probably faster than what they were in the U.S. It’s also very different outside of the U.S. Many major markets have a healthy dose of free TV. It has been interesting learning why FAST would be compelling in those markets. It’s about the variety of choice, with fewer limitations on capacity.”

THE GREAT CULLING
But there is such a thing as too much choice, and given that FAST is seen as a way to promote discoverability, rather than make it harder, a culling is to be expected in the sheer volume of services available.

“What’s interesting in the U.S. is the number of channels,” says Fremantle’s Richter. “That growth rate was higher than the growth rate of the advertising revenues. More money gets spread across a lot more channels and a lot more inventory. That’s a little bit of the challenge. A platform that maybe three or four years ago was eager to take on any kind of channel might be more selective now. They’re looking for strong, highly professional, premium brands with great viewer experiences, and they might filter out some channels that underperform. Some platforms carry 300, 400, 500 channels. That becomes a crowded space. That said, we’re working on some exciting new channels for the U.S. There’s not an absolute limit. What’s happening now is a little bit of a filtering. Strong new offerings will come to the market, and some will go out.”

“Volume is important because everybody’s trying to block shelf space,” says Autentic’s Hörl. “But viewers don’t want to be swamped with content they don’t find attractive enough. So, it’s more like a B2B challenge to block the shelf space from other competitors. But ultimately, I think the market will move toward a scenario where it’s more about quality than quantity in the FAST space. We all know that the shelf space is limited. We know that people’s time is limited. We need to figure out the best shows to put on the air.”

BBC Studios’ Shriver also expects user interfaces to improve. “Two hundred used to be the maximum; for the bigger platforms, the maximum will probably be around 400 channels. But the algorithm and the AI will serve you the channels you want to see. It will also suggest new channels based on your interests. I think the technology is going to get better.”