OTT and the realities of FAST channels
The recent surge in FAST channels is having a significant impact on the OTT industry. Few predicted their sudden rise over the past 18 months, which has left many wondering what they’ve missed. In this blog, we explore what FAST channels are, why they are growing in popularity, and how they affect the OTT industry.
What are FAST Channels?
FAST (Free Ad-supported Streaming TV) channels are a type of OTT content that allows users to stream high-quality linear content with no additional fees or subscriptions required. Simply put, FAST channels are an extended version of traditional TV streamed over internet-connected devices.
FAST vs AVOD
FAST channels operate in much the same way as traditional linear TV, with a programme schedule and ad breaks. AVOD (Advertising Video-On-Demand), on the other hand, is a streaming service business model that enables viewers to watch Video-On-Demand content in exchange for watching ads.
The positives and pitfalls for viewers
FAST channels replicate the traditional ‘free’ TV experience as they are supported by ads, which has led to significant gains in viewership over the last few months for these online-only services. While seemingly advantageous to viewers on the surface, there are drawbacks to consider, including:
- Due to their relatively new nature, some channels may have yet to be adequately tested or optimised for all types of devices, leading to viewers having potential issues with compatibility or performance.
- FAST channels may not be able to offer the same level of content selection as larger subscription services either. This could limit their appeal to viewers who are looking for a specific film, TV show, or other types of program.
- FAST channels can be resource-intensive, which may result in users experiencing buffering or other issues during peak viewing times.
What impact are FAST channels having on the OTT industry?
If you have attended a conference within the broadcast sector in the last two years, you will have heard all about FAST channels. The acronym has created a brand in itself and as ever, companies are jumping on the bandwagon for this ‘new’ business vertical. However, essentially this is merely the move from traditional linear TV via cable and satellite channels, to the future of OTT delivery. The good news is that it is now much easier to ‘spin up’ 24/7/365 linear channels through strong technology provisions, the bad news is that the fight for viewership remains exceptionally competitive, so as before the 80/20 rule will apply. If you are not in the top channels on Samsung, LG, or other, then the viewers will not find you, not watch your content and therefore your share of the advertising revenues will be significantly lower than those at the top.
However, the news isn’t all bad, all the data we see here at Magine Pro speaks to ‘lazy’ weekday viewing, that is to say after a hard day at work the average consumer will switch on linear channels and settle for something, rather than spending the time and effort to choose something from a vast array of VOD catalogues. (This behaviour switches entirely from Friday night to Sunday night). So if you have your own OTT platform, have plenty of content, and work with a good advertising platform, then it is definitely worth providing channels to enable an easier and quicker choice for your viewers.
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Want to discuss the pros and cons of FAST channels further? Get in touch with the Magine Pro team.
You can also head over to our homepage to find out more about our flexible OTT platform. Discover how we enable our partners to monetize their Live Events, Linear Channels, and VOD content with a customisable video streaming service.
OTT Industry predictions for 2019
2018 was an exciting year for the OTT industry. We saw a lot of positive developments, most of which we encountered firsthand at IBC2018 in September. Check out our post where we summarised our findings and reflected on the event, here. Now that we’re heading into the second full working week of January, we’re all starting to wonder what could be on the horizon.
In this post, we’re laying it out there and sharing our top OTT industry predictions 2019 (with a few expected additions of course). Reach out and let us know your thoughts and whether you think we’ve missed something vital.
Service shut downs and consolidations
In 2018 we started to see more OTT services consolidate or shut down entirely. This was largely due to market saturation, as the OTT industry grew so rapidly in the early days. Over the next year though, it’s likely we will see more of this affecting both smaller niche players and big incumbents, as the pressure to maintain sustainable and competitive OTT businesses increases.
In fact in 2018, WarnerMedia, for example, shut down its two-year-old indie and classic cinema streaming service FilmStruck not long after closing its Korean streaming service, DramaFever. WarnerMedia’s CEO John Stankey had announced only a few months prior to the closures though that the WarnerMedia division of AT&T has plans to launch a new ad-supported video streaming service by the end of 2019. We’re expecting the new service to launch in the fourth quarter and combine HBO (which AT&T picked up in its takeover of Time Warner in 2018) with other WarnerMedia brands including, Warner Bros, Turner, Cartoon Network and more.
New players from the big brands
We are also expecting to see Disney launch their much-hyped direct-to-consumer service later this year (the result of their acquisition of BamTech). It will certainly be interesting to see how well it’s received and the market uptake. We’re already wondering whether there’s going to be a Disney OR Netflix scenario. Or if subscribers will be willing to opt-in and subscribe to both.
It’s also not too far fetched to expect Apple to launch their secretive yet expected streaming service later this year. We’re curious to see if they’ve managed to secure content partnerships that to date others haven’t been able to. It’s also going to be interesting to see Apple’s interpretation of the best UI/UX and find out whether they are able to truly revolutionize the TV experience. Stay tuned!
Partnerships with Telcos & Operators
This year, we think we’re also likely to see more Telcos and Operators move out of the own-operated OTT space and begin partnering with existing and better established OTT players. In the last year, the increased customer value propositions enabled through partnerships have become more apparent, so it’s likely Telcos and Operators will be less inclined to view OTT Players as a threat going forward. Our former Head of Commercial Operations, Fredrik Engdahl spoke on the subject at IBC 2018. Check out the video of his talk here.
AVOD to mature
Advertising (AVOD) models for OTT are also likely to mature this year and become much more feasible for new and existing OTT Players. John Stankey, CEO of WarnerMedia, said himself at their November investor event, “Consumers clearly like the breadth of content that is available today. They like the choice. And a lot of that choice comes on the back of ad-supported models,” But added, “Things have to change [with ad models]” and suggested that less intrusive and more targeted ads are the way forward if AVOD is to really become a serious standalone model for OTT players in future. We couldn’t agree more.
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It’s certainly going to be an exciting year full of developments. To keep up-to-date on the latest, sign up to our monthly e-newsletter and check back in to the Magine Pro blog.