Lily Kholar's blog : Have We Switched from FAST to FAT? A Look at an Increasingly Saturated Market
Ad-supported was, in many ways, the battle cry of 2023. While we gave a lot of attention to the launch of a myriad of AVOD channels, let’s not forget that the free, ad-supported streaming TV era is also at its peak currently. With over 1,500 FAST channels now on offer in the US alone, has it become an oversaturated market? Our expert from Blake & Wang P.A., entertainment attorney in USA Brandon Blake, unpacks this thorny question- how much is too much for consumers to handle?
When an Industry Boom Turns
For viewers and distributors alike, it is starting to look like a very crowded market indeed. How lucrative the FAST TV industry will prove to be has also been a question on many people’s minds of late. Not that an industry boom like this is inherently bad, of course. Quite the contrary! However, all booms eventually lead to a consolidation period. Have we reached that yet? Or will this be a smart consolidation year where we see stakeholders raise their game to meet the challenge of selling in an ever-tightening share of the market?
The Perils of Fast Growth (or Is That FAST)?
As we saw in 2023 for the wider streaming industry, when there is a phase of rapid growth like this, stakeholders don’t always stop to plan for the future. Several of the pioneering FAST channels on the domestic market were launched rather haphazardly. As the industry matures into a multi-billion dollar one, there will inevitably come a time when both distributors and the advertisers they need to support them will be forced to reexamine their business models and put a competitive face on them. Inevitably, some will lose out.
1,500 individual services for an advertising-reliant industry is really a rather staggering amount. Each of those channels has to convince advertisers that their viewers will happily stay engaged through ad breaks. We are already hearing rumblings around optimization from the Mountain of Fox Corp. for its wildly successful Tubi platform.
Looking ahead, it is highly unlikely they will be the only ones, either. We’re entering an era where we can expect that ‘optimization’ to be a watchword. It won’t be cost-effective to launch, or even maintain, new channels in a saturated environment. Half the appeal of FAST services is that they take away the decision fatigue of choice-saturated premium and AVOD streaming offerings for viewers. Rather like slapping on the TV in the background as you work or play. With this many choices and channels, part of that appeal no longer exists.
What, then, can we expect? Some industry insiders suggest that the linear FAST model may move toward incorporating more on-demand viewing. Data from Pluto, which uses both, suggests it’s a model rising in popularity. Of course, solutions are rarely one-size-fits-all, especially in the entertainment industry. For now, only one thing is certain. Change is coming- and now is the time for smart producers, distributors, and smart FAST stakeholders to take a long, hard look at their successes and how to grow them for the future. Before they become one of the culled ones in the numbers game.
- Expert
- News