What TV and Media Execs Really Think of CTV Advertising
by Stephen Graveman
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Free Ad-Supported Television channels are growing in popularity and boosting earnings reports
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The Roku Channel, Tubi, Pluto, Amazon FreeVee, WatchFree+ – maybe these aren’t the top-billed channels on your streaming device, but their popularity is growing and they are quietly making media companies lots of money. Q3 earnings have highlighted the importance of free content to consumers and advertisers alike.
FAST or “Free Ad-Supported Streaming Television” channels may feel both like a rarity in the world of multiplying service fees and also oddly familiar. Free content seems uncommon in the ever-increasing world of subscription prices. Cord-cutters learned quickly that despite ridding themselves of a massive monthly bill from their cable TV provider, the minor fees of all the fragmented streaming channels still add up quickly. Free content offers some rare credit card relief.
Yet, consumers may also feel these offerings are scratching an itch they didn’t know they had. Many FAST channels offer linear programming, a continuous stream of content much like the days of cable. They eliminate the need to scroll through rows of content before being able to watch, offering a nostalgic viewing experience. These linear TV streams are a hallmark of what sets FAST channels apart and often the default content shown upon opening the channel; however, most FAST channels also feature on-demand content, including movies and TV shows, both with ad breaks to help monetize the free channel.
Content providers and streaming device owners are continuing to grow their FAST offerings. WatchFree+, Vizio’s version, has gotten an old-fashioned makeover. Their new channel guide harkens back to the cable guides of yesteryear, while the picture-in-picture feature reintroduces the ability for viewers to watch something while scrolling through other options.
Roku has made a splash in headlines with the announcement of their original movie Weird: The Al Yankovic Story, a biopic of the parody singer starring Daniel Radcliffe. After the rounds at film festivals, Roku debuted the movie on their FAST channel offering, The Roku Channel. Their gamble paid off; Weird had the largest opening weekend for the streaming company and boasted “the most engagement with the platform throughout its history,” according to Collider.
Tubi, the Fox-owned FAST channel, recently announced that they will make World Cup reruns available, another notable content offering for the oft-overlooked category. Not to be outdone, David Zaslav, the Warner Bros Discovery CEO, said “We can create a Tubi and a Pluto. But instead of buying content for someone else to populate our AVOD, we can create the content ourselves.” As media companies have realized the importance of their content libraries, FAST channels offer another way to distribute the titles they own. There is no reason any owned content shouldn’t be programmed in some way.
Despite their lack of notoriety, FAST channels are clearly an important piece of the streaming puzzle for many; it’s hard to argue with a bottom line. Adam Bergman, Group Vice President of Advertising and Data Sales at Vizio highlighted the importance of their FAST channel to their cash flow. “WatchFree+ is the crown jewel as one of our most compelling and important assets where advertisers see unique and distinct value.” It also accounts for nearly 30% of Vizio’s revenue.
While Netflix and Disney+ have made headlines for offering an ad-supported tier at a reduced price, many others are making their ad option free altogether and viewers are tuning in. In their recently released “US Connected TV Advertising Forecast 2022,” eMarketer highlighted the growth of these channels, reaching 29.2% of the US population this year compared to just 9.3% in 2018. That viewership translates to a lot of potential ad impressions, presenting a vast monetization opportunity.
During their Q3 earnings call, Scripps demonstrated the upside of FAST channels. After launching four new channels across Vizio, The Roku Channel, and more, they announced a 57% year-over-year growth of CTV alone. The ad opportunity seems to be paying off in spades for the media companies that choose to distribute FAST offerings across the variety of streaming devices and channels available.
As the streaming landscape has rapidly evolved, there are a few reasons that FAST channels seem to be the silent winners. Many of these channels are built into smart TV systems, which are quickly becoming the streaming device of choice. The eMarketer report showed that more and more, people are choosing to stream via smart TVs as they continue to buy new devices with the technology built-in. These smart TVs often default to FAST channels at start-up, hooking potential viewers from the start of their streaming session.
Not only do they cut down on the initial decision-making, but many FAST channels don’t even require a login to watch, removing yet another barrier to entry. “Free Movies & TV/ Fewer Ads than Cable/ No Subscription Required,” touts the Tubi website. Instead of fumbling through different sign-in pages across the various apps, FAST channels allow viewers the true lean-back experience they are seeking when they turn on the TV.
FAST channels provide a content safety net of sorts. After finishing a binge or scrolling to the very ends of Netflix (it’s possible…we’ve done it), FAST channels provide an additional source of content. And as the price of streaming continues to rise, these channels help fill in the gaps in a viewer’s streaming portfolio without adding additional expense. The lack of barriers and price tags means that these channels can capture the residual viewing hours of dedicated TV watchers.
The streaming world has become overrun with choices. From which device to use to which services to subscribe to, by the time a viewer sits down with remote in hand, choosing what to watch can feel daunting. FAST channels lessen these choices; sure there are still dozens and dozens of channels and titles to choose from, but whatever you pick will already be streaming content. Love sports? Choosing the Fubo fast channel means something sports-related. Just like the comfort watch of cable television, linear programming means you can tune into what’s on. According to an article by Vox, in 2019, viewers spent an average of 7.4 minutes per day selecting something to watch–45 hours a year spent scrolling.
If there was ever a better case study for the idea that consumers don’t actually always want choice, you don’t have to look any further than TikTok, which has swiftly become the top social media channel. Scott Galloway, NYU Professor, entrepreneur, and tech soothsayer, has often highlighted this feature when discussing TikTok. “The biggest mistake we make in marketing is believing choice is a benefit. No, it’s a tax. Consumers don’t want more choices, they want more confidence in the choices presented. TikTok has taken this to a new level by eliminating the burden of choice entirely. Its content is a continuous stream of videos where the decisions are made for you. Your only choice: what not to watch.”
While TikTok has also set their sights on the TV screen, for the interim, FAST channels seem to be the go-to option to alleviate the burden of choice. Despite their lack of notoriety, these hidden gems are key players in the shifting streaming environment.