Streaming Revenue Will Overtake Pay TV in Q3 of 2024
by Frankie Karrer
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8 Min Read
Sure, streaming services have a lot of buzzy content. But what’s better than TV you have to pay for? Free TV! Read on to learn more about free ad-supported TV—which is admittedly a lot like old-fashioned TV, but with a lot of new tech that makes it extremely compelling to viewers and advertisers alike.
Free ad-supported TV is a streaming format that is free to the viewer because it’s supported by ads. These platforms are also referred to as FAST channels or FAST streaming services.
It’s pretty close to the old days of network viewing, but FAST channels are rapidly gaining in popularity, with over 1400 FAST channels available in the US.
FAST streaming services work by offering a wide range of content, including movies, TV shows, and live channels, for free to users while generating revenue through advertisements.
The content is streamed over the internet, similar to other over-the-top (OTT) platforms, but unlike subscription-based services, users do not have to pay a monthly fee. The ads are interspersed throughout the content, often in a manner akin to traditional TV advertising, and the service providers may use targeted advertising based on user preferences and behavior to increase ad effectiveness.
While some channels are “single-show” channels (all Baywatch, all day) there’s quite a lot of diversity in their programming, which tends to be based on older licensed content, rather than the ocean of new and licensed content that defines Premium Video on Demand (PVOD) services like Netflix and Apple TV or Ad-Supported Video on Demand (AVOD) services like the ad-supported tiers of Hulu and HBO Max.
It turns out that a lot of viewers may miss the old days of just seeing what’s on, combined with the ease of streaming: the key difference between a FAST channel and watching old-fashioned linear TV or cable TV is that you can access it on your favorite Connected TV platform or device, in the same way that you’d watch any other streaming service. Of course, that extends to mobile phones and tablets, too.
You can find a FAST channel that’s appealing to you by looking at a grid (let’s face it, like an old TV guide) and clicking on whatever looks good.
One thing’s for sure, these FAST channels (both as free streaming services and free streaming apps) are gaining in popularity. Consider these statistics:
So what’s behind this resurgence in a format that many even recently thought had gone the way of the dodo?
It may have to do with exhaustion brought on by the plethora of streaming services and options, with too many options out there when all you want to do is just find something fun to watch.
Related to that, there’s the expense of PVOD and even some AVOD services, many of which may be cheaper than PVOD (eg, the ad-supported Hulu tier vs its pure subscription service), but can still get pricey, particularly if you’re someone with several different subscriptions.
Audiences turning away from premium streaming devices to free ad-supported platforms is good — nay, great— news for advertisers looking to enhance their lead generation and demand generation initiatives.
Viewers are getting exhausted from having to subscribe to too many premium streaming services and opting for the familiarity and variety of FAST channels. What that means for marketers is that they have to pivot their attention to this growing segment of the US entertainment economy.
To get a sense of the numbers involved, read on.
With the explosion in the sheer number of FAST channels and free ad-supported streaming TV platforms out there, here are some that are making the greatest impact:
Roku is widely used as an over-the-top (OTT) device to bring streaming services to viewers. Roku (the device) is widely used, with 50+ million accounts in the US.
But Roku also has a channel, which makes originals — including the upcoming, buzzy “Weird” Al Yankovic biopic, starring Daniel Radcliffe — and shows licensed content. The Roku channel is now the industry’s fifth most popular streaming service, reaching an estimated 70 million viewers in the US. By many measures, Roku is also growing faster than its competition.
This may be related to the reach of the Roku device, or it may be because of the diverse entertainment offerings on the Roku Channel.
Tubi had 3.6 billion hours streamed in 2021, a 40% increase in total viewing time from the prior year. Owned by Fox, so you can stream popular shows like The Masked Singer, Tubi logged 51 million monthly active users in the last quarter of 2021. The service is touting “exponential growth,” and is adding additional content-focused channels for Gordon Ramsay and TMZ-themed content (to name two), as well as Tubi Originals and Tubi en Español.
According to its owner Paramount TV, Pluto TV had nearly 70 million monthly viewers worldwide, an increase of about 30 million more users than were reported for the same timeframe, a year earlier.
As you would expect from a site affiliated with IMDb, the Internet Movie Database, Amazon Freevee usually offers a compelling assortment of classic movies, supported by advertising, as well as a slew of new originals, and classic series like Mad Men. According to Amazon, all of its ad-supported OTT TV reaches more than 120 million monthly viewers, a sixfold increase from January 2020. (Those numbers include Twitch and other Amazon holdings, like its news app. Still, the overall trend and numbers are pretty remarkable).
According to its LinkedIn bio, Crackle Plus (comprising Crackle and Popcornflix) reaches 30 million active users monthly.
Xumo, owned by Comcast, had 24 million monthly active users in October 2020.
Peacock, also owned by Comcast, offers various tiers of subscription but does offer some of its content free, supported by ads. Peacock as a whole claimed 24.5 million active accounts at the end of 2021, of which roughly one-third were of the free variety. Peacock’s free programming still includes hits like The Office and Parks and Recreation.
Sling TV, operated by Dish Network, reportedly had just under 2.49 million subscribers in 2021.
Vudu is both a movie and TV rental site and a free, ad-supported TV platform. According to some measures, Vudu gets 11.2M unique viewers a month.
Performance TV turns your connected TV device into a performance marketing channel. From a marketing standpoint, the numbers for free ad-supported TV are impossible to ignore.
Roku, for example, outperformed predictions in the fourth quarter of 2020, with a 58% increase in revenue, and has continued to experience phenomenal growth. And as outlined above, many of the players in the FAST channel space have deep-pocketed investors behind them, eager to keep fueling their growth with more quality originals and licensed classics.
The appeal of FAST channels is simple: they’re free for viewers, and often actually have the shows and movies on them that consumers are looking for.
But it takes a smart, focused approach to advertising to harness all that consumer interest. Network TV is on its way out, but it makes a lot of sense to spend in the Connected TV space: 72% of households with Wi-Fi stream video on their Connected TV screens.
MNTN Performance TV uses data and programmatic real-time bidding fueled by AI technology to precisely match audiences with content. Thus, it ensures that your ad campaigns are reaching the right viewers in the most targeted fashion possible.
In short, MNTN Performance TV takes your CTV device and turns those free streaming services into lean, mean marketing channels for connected TV advertising. And as viewers switch between these free streaming services on their TVs, phones, and other mobile devices, MNTN Performance TV marketing can follow their attention across multiple devices and platforms.
While Netflix and other similar PVOD services have been hogging many of the headlines, a quiet revolution has been taking place in the world of free streaming services and apps, supported by advertising.
This has not escaped the attention of giant players like Amazon and Comcast, and if you’re an advertiser it shouldn’t escape your notice, either.
Fortunately, MNTN is on top of the trends in the fast-evolving world of FAST channels.
MNTN can use its mastery of Performance TV to help you craft a campaign that’s targeted, affordable, and effective, so you can focus some of the tens of millions of eyeballs watching on FAST channels onto your products.
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