TV Kids Summer Festival Spotlights FAST Opportunities

The TV Kids Summer Festival welcomed pocket.watch’s David B. Williams and WildBrain’s Lara Ilie to discuss opportunities in FAST channels.

Williams, senior VP and general manager of channels for pocket.watch, and Ilie, VP for revenue share and transactional at WildBrain, spoke with TV Kids’ Anna Carugati about their approaches to the FAST segment in a session you can view here.

WildBrain began its FAST channel business with Roku, Ilie said, growing that slate to 12, with another one on the way. Overall, the company now has 58 FAST channels across the U.S. and Europe.

Pocket.watch has also been in this space for a while, beginning in 2018. The FAST channels allowed the company an additional opportunity to “exemplify our brand voice and put our properties and our creator brands out there,” Williams said. “When you think about it from the standpoint of an electronic program guide, where there are limited slots in a sense, we felt that the real estate was really important and we wanted to be there. We knew this was a growing sector, so a lot of those early days were just about the hustle of getting the content out there, figuring out how to do the programming, expanding to as many platforms as we could. We’re on ten platforms now.”

Pocket.watch currently operates two FAST channels, one serving as a companion to its SVOD service. “The economics of the SVOD channel are frankly a lot better than they are on the FAST channels. We look at the FAST channels in a lot of ways as a platform for driving awareness and excitement about our SVOD platform. But then also our other businesses: the consumer products and the games. It also helps create market enthusiasm for all of our brands and all of our lines of business.”

It’s a different approach at WildBrain, Ilie said. “We have really focused on single IP channels. We have a healthy dynamic with our distribution arm. You’ll have a hard time finding a traditional broadcaster willing to buy 365 episodes of Teletubbies and air all those episodes. That left us with a lot of our beloved franchises that have found a new home in the FAST world. They thrived in this world.”

Williams highlighted pocket.watch’s role in the creator economy, bringing YouTube-originated content into “much more premium environments. FAST channels look and feel like traditional television. So from the parent optics and the business-to-business optics, it elevates the quality and perception versus just being on YouTube.”

He added that FAST channels present an “opportunity to eventize launches and bring shows to market in an exciting way that can be part of a broader life cycle for our programming.”

FAST channels require volume, Ilie noted, and properties with significant market awareness, so generally aren’t considered the primary home for new shows. They can be used as a promotional tool when launching brand-new IP, Williams explained. “There are some really great things you can do to launch shows and FAST can be an important ingredient in that.”

Discussing the FAST market internationally, Ilie expects Europe to soon catch up to the U.S., with one key difference: “The FAST channels in the U.S. started and still reside within the CTVs and the free AVOD apps. Europe is taking an already baked-in concept and making it available as an option to already well-established local broadcasters who put FAST channels on their sites, which is a completely different method of exploitation than how it started in the U.S. That’s not to say that the CTV’s of the world are not going to try to get their market share in Europe as well; they are. But if you think about it, a TF1 or an ITV has already a built-in audience and advertising, so if they’re going to launch FAST channels within their own experience, they’re going to have more viewers than anyone entering the market fresh.”

FAST begins to solve the discoverability challenge, Ilie added. “It makes it so much easier for people to actually find something quickly and actually watch content.” And while the FAST channel landscape becoming more crowded does complicate matters, Ilie expects discoverability to improve once operators improve their search engines.

The conversation then moved to revenue models. “When it started there were really two basic models: rev share and inventory share,” Williams explained. “We actually have a really healthy and growing ad business. We’ve got this terrific opportunity where we can work with our creator providers and their YouTube channels and create custom content. And then we have direct sales rights into YouTube and YouTube Kids so we can build these great media plans around custom content. Then we can extend those media plans into our FAST inventory and our other OTT inventories. So it gives us a great engine to monetize inventory. We were going pretty deep in inventory shares where we could get them. Especially in the long term, that’s where the biggest opportunity is. A lot of platforms don’t want to do inventory shares, so you limp along a little bit with a rev share that ends up not being the greatest yield in the world!”

There are other models emerging. “We’re going to be extending our channels in a new way with a new platform where we’re going to get essentially carriage fees. It will be part of a subscription tier and ad-free, so technically not FAST, but we’re looking at subscriber fees. We’ve even done fixed-fee licenses, and that was in an international territory because those international economics can be super challenging.”

WildBrain has also operated across inventory share, rev share and license fees. “We also have our own ad-sales team that has been focused on selling our YouTube content and now are looking into selling CTV ads from our FAST channels,” Ilie explained. “The one thing that’s very important for us is access to analytics. The revenue model that we choose comes hand-in-hand with certain perks or disadvantages. When it comes to license fees, they do their math pretty well. It’s somewhat in keeping with what we would have made ourselves if we were to go on a rev-share partnership. Internationally it’s a different conversation; it’s harder to go rev-share.”

Analytics remain a challenge given the lack of standardization, Williams said. “We invested substantially in some proprietary tools to help normalize the data and give us a consolidated view of our whole network. It’s great to get the data. Some of it is hard to interpret and the definitions are all over the map. Some give you more than some give you less. But the insights into your programming, to get that direct audience context is just so invaluable. We use it constantly to make decisions.”

There are lots of reasons to feel optimistic for the future of FAST, Ilie said. “In the U.S. alone, there are still a lot of people who are not aware that the option exists to begin with. There are still smart TVs to be sold. The quality of the shows being made available on FAST is going to improve, so people are going to spend more time watching on FAST. That will come hand-in-hand with the monetization.”

Williams added: “The economic piece is going to be a big part of the story in the next couple of years. The traditional linear model is close to breaking when it comes to the concentration of ad dollars in those traditional models. A lot of places are increasing their ad load on the traditional side while the ad loads on the digital side are decreasing or just smaller in general. From a value proposition to the consumer, it’s getting more and more compelling to be in a FAST environment. One has to expect that there will be kind of a watershed moment in the near future. All boats are going to rise with that tide on the FAST side. That change in economics will bring great opportunities to increase our investments in this programming.”