Traditional Broadcasters need and want to adopt Streaming, but how?
View TV, an original streaming company with two decades of experience, has powered and experienced the success of streaming media and the transformation of audiences’ media consumption from traditional broadcast networks to digital streaming services.
Now that Streaming for broadcasters has been honed and aligned as another contribution service, traditional broadcasters can be confident that it is simply business as usual, with little change to each channel operationally, but this new form of contribution enables viewers to engage with more flexibility and from the wider area whilst providing automated premium revenues using accurate data.
View TV understands change within an organisation is costly, consuming, and timely, but with the Broadcast CDN product from View TV, you simply get into global streaming easier and far cheaper than adding another satellite or cable platform. Once on the Broadcast CDN platform, channels and content can be pushed to an unlimited number of platforms and devices with no further integration.
Why is Television Changing?
Broadcast Television has become an integral part of human life which covers the daily entertainment and information needs of consumers. According to various sources, the average time spent watching TV in 2021 by US adults was shy of 100 hours per month, and they can do this via any device, from Smart TV to desktop pc, tablet computers and mobiles.
Today, state-of-the-art TV channel alternatives allow users to watch their favourite shows, movies, documentaries, and other video formats under the various conditions offered by different platforms — from linear to connected TV. The TV industry is considered one of the most popular and engaging options for advertisers to cater to demanding viewers with exceptional advertising content as well as offer the chance to evolve ROI. In 2022, the TV advertising world is forecasted to exceed a revenue of $159 billion which is 10% higher than in 2021.
An established trend of Free-to-watch Advertising-supported Streaming Television (FAST) has appeared thanks to the quick growth of this market across the globe. So What is FAST? Why is it gaining interest among media companies and advertising agencies?
What Are FAST Channels?
FAST denotes a free ad-supported streaming TV service. It is much the same as live linear TV from cable and satellite providers but without a subscription. The FAST media format also enables broadcasters, streaming providers and advertisers to build ad-funded business models for content acquisition and monetising exclusive content.
As the COVID-19 pandemic has led to a significant introduction of smart TV (CTV) to audiences, FAST services have gained a boost as the manufacturers have embedded these services into their device software. For example, in the USA in 2021, more than 80% of American households had at least one CTV. In the wake of this, advertisers have shifted their monetization from traditional television to streaming TV with studies indicating that marketers intend to spend over $25 billion on ad-supported video by 2025.
FAST is mainly embedded in Internet-connected CTV platforms. If a linear model TV provides a standard package of video content and costly subscriptions, FAST Channels improve the viewer’s experience by offering personalized content and organically placed advertisements. Ads are typically inserted in various FAST TV channels with the programming scheduled no different to ad placements in traditional broadcast television. Accordingly, they carry such common features as:
- in total ads take around 8-14 minutes per hour;
- ad breaks appear every 10-12 minutes, with 3-6 30-second traditional broadcast adverts ads per break;
- as viewers report, they spend more than 30 minutes per day with FAST services.
FAST and AVOD work in Tandem
When dealing with the advertising of video content in the TV industry, acronyms VOD and AVOD are to come up first. VOD stands for video-on-demand available to viewers for free or for purchase. To access VOD content, one should have an account on streaming platforms. Such video streaming introduces various VOD monetization models, including AVOD.
AVOD signifies an ad-supported video on demand. In a nutshell, it is VOD content monetized with ads instead of a subscription. Viewers are offered to watch ads appearing within the content they want to watch for free. Typically, ads are uploaded through video commercials, sponsored content, display banners, and more. An example of AVOD is a popular YouTube.
In FAST, monetization works via ad-supported live content. AVOD and FAST Linear reach the same objective but with a focus on different types of content consumption.
FAST and AVOD are both decent solutions to apply with ads to monetize and generate revenue. They also reduce the need for an expensive cable subscription. One recent report states that 53% of smart TV owners are watching FAST services, and 55% watch AVOD. Such a growth rate of free ad-supported TV has made consumers gradually lose interest in subscription video on demand (SVOD). As statistics declare, the share of US homes with SVOD decreased by more than 15% in the third quarter of 2021.
FAST Service Types
When it comes to implementing FAST services to enhance revenue on ad spend, it is essential to distinguish between the different types of FAST business models. There are several classifications that can be used to discern between them.
The approach in scaling the service:
- Multi-operational — available across most platforms like Kapang, Roku, Xumo, Peacock, and Pluto TV;
- Platform exclusive — available only via one particular platform, sometimes known as o&O (owned-and-operated) (LG, Samsung TV Plus, and Vizio Watchfree);
Conditions to access FAST service:
- Free — when used with only AVOD and/or linear TV channels;
- Premium version — when supported with offers like pay-per-view or an SVOD option, where the subscription revenue and ad revenue are both taken to support the origin costs i.e. national sports
FAST is gaining pace by providing consumers with premium content and targeted, personalized ads in such regions as the USA, Canada, EMEA, APAC, and Latin America. It allows distributors and addressable advertisers to notice the genre preferences in various regions. For example, the news segment is leading in the US, while in Latina America viewers prefer watching movies and EMEA prefers documentaries. When it comes to the APAC region, news also takes a leading position, and music is showing a good ad conversion. These insights allow advertisers and marketers to provide personalized ad streaming to win a broader audience of viewers.
How much revenue can be earned on FAST Channels?
The payoff from the FAST service is calculated by “ad impressions” which are delivered as an “AdPOD”. These are CPMs (Cost Per Milles) that show the amount of ad views the content provider gets paid for per 1,000 ad views.
This parameter is difficult to measure as it can vary depending on the ad content and time of the day, but it usually fluctuates between $10 and $25. FAST allows distributors to provide ad content more dynamically and makes it consumer-centred whether to a household in general or just one individual. The CPM model in FAST TV channels is measured in $40-$50 per 1,000 impressions. Thus, TV content providers can earn $0.60-$1 for every hour a single consumer watches their FAST channel. With an audience of millions of viewers, the cumulative number ends up being impressive and profitable.
Considering the leading platforms in free ad-supported TV, it is easy to see the benefits they obtain from launching their FAST channels. For example, Hulu makes around $15 per month on advertising per subscriber which is more than they charge for their premium ad-free package, which is currently less.
Another large FAST channel aggregator is Pluto, which earned its 1st $1 million in 2019 and today earns $3 million a day across 200 channels thanks to increased content consumption exclusively support by FAST.
What should broadcasters take from the FAST Approach?
The new brand of FAST channels is succeeding hand in hand with AVOD delivery. Each region accounts for the ad content preferences of an average consumer and picks the best solutions for viewers and advertisers to receive an impressive streaming package while also making a reasonable profit through the ad-only business model respectively.
Thus, according to the advantages of reaching a target audience with exclusive content and gaining immediate ad revenue, free ad-supported streaming TV services are expected to make strides and move forward across the world in the coming years.
So how do Traditional Broadcasters get in on the action?
So now we have informed you of how great FAST channels are and that some key players have some game-changing audiences, how can a traditional broadcast business adopt FAST without changing the workflow and working practices within their businesses?
Back to the beginning of this article, View TV has been across both the Broadcast industry and the Streaming Media industry for many years and the audience is not changing what they want, they just want to consume it easier, everywhere and on any device.
View TV has built both Broadcast CDN and a Cloud Playout solution, Cloudie TV to provide every traditional broadcaster with a number of options to cash in on the audience demands for “proper television on streaming services”.
View TV allows any broadcaster to have a single linear television service distributed to an unlimited number of platforms globally, if licensing allows, providing time-shift, EPG conversions, transcoding and carrier-grade content delivery by providing a single mezzanine feed from their existing source, on-premise or via the designated service provider.
For Broadcasters that have exclusive licensing agreements with traditional platforms that restrict simulcast streaming then Cloudie TV is a cloud-playout service which is accessed via a web browser to allow a B-channel or sister channel to be created from the same branding but with a different schedule which could be offered per country, region or device.
Traditional Broadcasters can breathe a sigh of relief that Cloudie TV & Broadcast CDN from View TV allows them to get involved with streaming with very little or no change to any local or national broadcast business.
View TV says that BroadcastCDN working in line with Kapang can get any existing broadcast television channel feed onto FAST in full quality 1080HD with dynamic ad replacement, live on a nationally accessible vMVPD Kapang and 100% fill national addressable advertising within a few days and delivered to in the inbox of the Top Smart TV broadcasters at the point of sign off.
BroadcstCDN collects, verifies, transcodes, distributes, monetizes and monitors the end-to-end processes across more than 65 FAST Platforms so you do not have to.