For the past few years, Free Ad-supported Streaming TV (FAST) streaming services have been one of the most talked about and contested topics in the streaming media market, as everyone following the sector knows. Many people have differing views about the success of these offers, from definition to growth, and there are plenty of high-level statistics published regarding the popularity of FAST services. But popularity and profitability are not the same, and there are almost no business measures available in the sector to gauge FAST's success.
None of the companies running FAST services want to publicly acknowledge what they tell me privately — that 90% of their viewing hours come from less than 10% of their FAST channels — or reveal CPMs, P&L, or usage by viewing hours across channels. Other than Vizio, no company shares their FAST service revenue or ARPU. I anticipate we'll also lose the few hard data points we now have from Vizio if Walmart's acquisition of the company goes through. Apart from the occasional remark, FOX, Comcast, Paramount, Roku, Amazon, Sling, Samsung, LG, Plex, and many more companies that own or operate FAST services don't disclose their revenue, profit, loss, or revenue growth for FAST offerings.
READ MORE: How FAST enhances streaming's business models
Since FAST services first came to the market, they have always been considered primarily stand-alone services, not integrated with SVOD offerings. Peacock TV is a rare example, as it was one of the first to offer FAST channels as a core part of its service. But in light of the recent announcements from Roku and Fubo (more on those below), streaming services are beginning to consider FAST services an integral part of their whole portfolio, leveraging them to advertise other video services.
Fubo and FAST: Retain customers, increase engagement
Fubo’s Free tier was introduced in May and is currently accessible to individuals who have paid for Fubo's live linear service in the past and who have paused or canceled their Fubo membership. They also provide it to customers who have accessed Fubo's linear services during a free trial but have not yet decided to pay for the service. With its FAST offering, Fubo hopes to retain customers on its platform and increase user engagement to potentially convert users who have left their linear service when something like the start of the new NFL season occurs.
In the meantime, Fubo earns ad money from those who use the free service. In theory, this strategy makes sense, but it's too soon to tell if Fubo will successfully convince people to pay for a vMVPD subscription by using free FAST content. Fubo uses it primarily as a test, but the model is intelligent, incurs minimal operational costs, and will give them data to evaluate the outcomes.
Roku, sports and premium content
Roku, which has been offering FAST channels for years, recently announced the new Roku Sports Channel. In a departure from having premium sports content behind an SVOD service, the new FAST channel will include live top-tier, premium sports content, including baseball games with MLB Sunday Leadoff and live races from Formula E. Roku is using the new channel as a way to lead viewers through the wide variety of premium sports content available on their platform, exposing them to premium content for one of the most popular channel genres.
Roku currently has more than 400 live linear television channels and licenses and distributes content from more than 250 partners. With so much FAST content available, in addition to over 80,000 on-demand movies and programs, Roku is using the Roku Sports Channel to pull some of the most popular content front and center.
This will keep users on the platform for longer periods, earn Roku advertising revenue and, more importantly, provide a window into the depth of sports-related content Roku has on-demand. If you like watching live baseball, Roku hopes you may also enjoy watching on-demand documentaries on the same topic. Since Roku's primary business is advertising, time spent on the platform significantly impacts revenue generation — unlike Fubo, which gets nearly all its revenue from a vMVPD subscription service.
FAST in the near future: Diversifying revenue models and methods
Many FAST services continue to focus on one business strategy that promotes the availability of hundreds of FAST channels. However, as FAST gains traction, its use is starting to be seen as a component of a larger content strategy, wherein content owners and broadcasters are beginning to emphasize a variety of revenue models and methods for packaging videos with as many options as possible. With the media businesses consolidating, causing overlapping of video content libraries, we should anticipate even more evolving and essential use cases for FAST in the coming years.
About the author: Dan Rayburn is a 25-year streaming media veteran and Conference Chairman for the NAB Show Streaming Summit and his streamingmediablog.com.
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