How FAST is redefining viewer engagement and monetization

By Markus Hejdenberg, Accedo One

Subscribe to NewscastStudio for the latest news, project case studies and product announcements in broadcast technology, creative design and engineering delivered to your inbox.

The results are in: FAST is the fastest growing streaming category in the U.S.

According to a recent report by Kantar, 47% of households in the region use a FAST (or free ad-supported streaming television) service each week, and in Q3 of this year, adoption of FAST services outpaced VoD streaming, two-fold. OEMs and major streaming platforms are evolving their businesses to include aggregated FAST offerings alongside their existing VOD services, and there are now over 1,600 unique FAST channels in the U.S. Omdia reports that a small number of players have generated much of the U.S. growth. The top five channels, owned by Paramount TV and its Pluto TV division, have a huge reach, and account for more than 20% of monthly consumption.

The market is already highly competitive and will only become more so as the number of available FAST channels keeps rising. While there’s no doubt that FAST is growing in popularity, has it reached its full potential on the monetization front?

FAST as it stands now

Viewer engagement is critical for an OTT service to succeed and effectively monetize its content in a competitive market. In its current format, all viewers of a FAST channel are served the same pre-programmed linear content. This model prevents channel owners from personalizing the viewing experience, which hampers engagement, making it harder for providers to keep viewers tuned in. There is also a risk that with so many channels to choose from, content discovery becomes more difficult, so users may suffer from decision fatigue and disengagement.

Viewers have grown used to the highly personalized viewing experiences that VOD services provide. Those services draw on huge amounts of data to personalize all aspects of the video service, from the homepage, to content recommendations, thumbnails, and ads. And this is where FAST is falling down, because it simply isn’t delivering anywhere near the level of personalization that is expected, or that is possible for providers of digital video services. To increase engagement and make FAST channels more profitable, it is absolutely crucial to focus on improving the viewing experience.

FAST reimagined

Rather than simply replicating the cable linear experience where all viewers of a channel are served the same content, FAST needs to evolve so that viewers are served curated channels as well as personalized in-channel programming. The depth of curation must go much further than simply serving an action movies fan a FAST channel that shows the most popular movies in that genre, or serving a snowboarding fan a winter sports channel. In practice, this could mean that FAST providers curate channels based on different metrics, like preferences, sentiment, actors, sub-genres, as well as many other metrics. A fan of Sylvester Stallone does not need to watch Arnold just because he likes action movies, just as a snowboarding enthusiast shouldn’t have to watch off-piste skiing content mixed with snowboarding.

What’s important here is the depth of curation that can be done, and needs to be done to elevate FAST. As you may imagine, this model would be very costly to run, with individualized playouts and curation per viewer. The model needs to adopt the same segmentation and cohort logic that we use in a VOD scenario today for personalization. This is not currently happening because FAST channel providers are working off their own content catalog and not doing enough syndication and collaboration. This needs to change because most FAST channels are operated by smaller outfits that do not hold a vast catalog.

Advertisement

Data is the driving force

By carefully curating channels and selecting and organizing content within them, FAST providers can ensure that content aligns with viewers preferences and needs. To get this right, it’s important to gauge user interests right at the start of the experience, when onboarding. This will help to create a more enjoyable viewing experience, which in turn will improve engagement. However, none of this is possible without access to the right data, as well as the skills required to turn data into actionable insights.

Data is a key enabler that will allow FAST service providers to better engage their audience and improve the key metrics for the FAST business model: viewing hours and advertising revenue. Providers need to invest in robust data collection and analysis mechanisms to understand user behavior, preferences, and engagement patterns. Metadata also plays a critical role in enabling effective personalization because if content is not tagged appropriately, it won’t be possible to connect users with the right content that matches their habits and tastes. With enough of the right data at their disposal, providers can personalize channel as well as in-channel content curation, which together will lead to an improved viewer experience and increased revenue.

To maximize the monetization potential of FAST channels, providers also need to get better at contextual advertising by leveraging available data and enabling ad bidding on the fly. To serve ads that are aligned with the content being viewed, providers need a deep understanding of both the content and the viewer. This will enable them to deliver a much more immersive and relevant advertising experience for users, which will help increase ad-revenue.

Realizing FAST’s potential

While FAST is undoubtedly making waves in the video industry, its true potential in terms of monetization is yet to be fully realized. To increase engagement and ad-revenue, providers need to deliver a first-rate user experience. Delivery of a cable-like linear experience where the same channels and programming are served to all viewers, will soon become a thing of the past in the OTT space. We’re currently seeing a lot of innovation around FAST, and as the industry continues down the hybrid monetization route, there is a strong possibility that FAST will become an important part of the OTT monetization strategy. But for FAST to thrive in the long run, it needs a far deeper level of in-channel curation, better-curated catalogs and more cross-channel curation for the viewers.

Subscribe to NewscastStudio for the latest news, project case studies and product announcements in broadcast technology, creative design and engineering delivered to your inbox.

Markus Hejdenberg, Accedo OneAs Head of Product Sales and Marketing, Markus Hejdenberg is responsible for the sales and marketing strategy for Accedo One, the company’s cloud platform for creating, delivering, and monetizing video experiences. Having previously been Head of Product at Accedo, Markus has a good understanding of the solution, the challenges faced by customers, and the product roadmap. Markus has extensive experience initiating and managing commercial companies in various sectors of the entertainment industry. Prior to joining Accedo in 2014, Markus was CEO for a startup company offering streaming services for iOS, Android, and web.

Author Avatar