FAST channels, Fast or Free?

In broadcasting we are fond of using acronyms and initials for everything, but in this case, it can lead to confusion rather than help. Because when we refer to FAST channels, we do not mean that they are ‘fast’ channels, even if they are fast to create, but Free Ad-supported Streaming Television instead. And wasn’t this the good old linear TV we all know? Not really. Let’s take a look.

By Yeray Alfageme, Business Development Manager at Optiva Media an EPAM company

 

The first thing is to make clear that the term FAST does not only refer to linear channels as we all understand them, but to any method for distribution of ‘linear’ content. Those quotation marks can be explained by the fact that this model is supported by advertising as platforms or other models. Not all content delivery models are the same -this is obvious- so let’s try to delve a little more to understand the FAST model.

 

AVOD, SVOD, TVOD and FAST

The first model, and perhaps the most obvious from a business point of view, is AVOD (Advertising Video On Demand). YouTube. Platforms that offer ‘free’ on-demand content in exchange for watching ads. These quotation marls are explained easily: the thing is that YouTube itself -sorry for resorting such an over-used example, but I think it is the most enlightening one- offers models without advertising, but at a direct cost. And it is important to mention ‘direct’ because, when something is free, even if it is supported by advertising, we are somehow paying for it.

The second and also a widespread model for ‘premium’ content is SVOD (Subscription Video On Demand). Netflix, again another widely used, well-known, crystal-clear example. In this model there is no advertising, although now this barrier is going to be knocked down and platforms are going to offer content under subscription with advertising at a lower cost. Will it be called ASVOD? We will find out when implementation starts, and the ‘streaming bubble’ is pricked. In exchange for zero advertising, there is a fixed cost per month regardless of the amount of content displayed.

The third model before the arrival of FAST is the TVOD (Transactional Video On Demand). Rental of content. The first service to offer this video-on-demand model was Apple followed by YouTube itself and even console platforms. The content is rented for a certain time, as in traditional video clubs -such good all times- or for a certain number of views for each payment made.
And here comes FAST. “Linear” channels with advertising, offered free of charge. Plain, traditional TV. Well, not exactly. It is clear that in the description of the model itself it is inevitable to mention traditional unidirectional linear television, whether terrestrial TV, cable TV or satellite TV, but there are important differences that we will now explain.

 

 

Channels that are not entirely ‘linear’

For this century’s generations, understanding TV as something linear -where one content follows another inevitably, no possibility to choose- is quite hard to do. This lack of freedom does not fit with their native digital experience, naturally.

However, the fact that there is the possibility of varying, even avoiding, a certain part of the content goes against the business model in which the viewing of advertising was what would pay for the existence of the broadcast itself. If I can skip something, what better than skipping adverting, right?

FAST channels offer this type of functionality halfway between a linear channel and VOD, with the possibility to rewind, pause or even jumping from one content to another, either between episodes or blocks. Therefore, the advertising model must be reinvented, since avoiding ads is just too easy.

This is why other advertising schemes such as pre-roll, post-roll or interstitial models, are required.

 

Beyond the traditional advertising model

By offering advanced features that allow ads to be skipped -if offered in a pure and simple linear way- there is a need to invent other advertising models. There are mainly three:

Pre-roll: A block of ads that is played at the start of each streaming session.

Post-roll: A block of ads that is played at the end of each streaming session.

Interstitial: A block of ads that is played every few minutes during the streaming session, for example, every 5 minutes.

In all three types, there is the possibility of offering the viewer the opportunity of avoiding advertising after the first few seconds, or forcing viewers watch them through the end. This mainly depends on the relevant commercial agreement in place.

The pre-roll model is the most widespread and also the one most accepted by viewers. When viewers have not yet started to watch the chosen content, they tend to accept the advertising better because they find it unintrusive. The interstitial model is also very interesting from a business standpoint, since viewers who surely will be watching the content with interest are then exposed to advertising that they will inevitably see, at least at an early stage. However, acceptance by viewers here is not that broad because we are actually interrupting them to show them soemthing they may not be willing to watch, That is why nearly in all instances a skip option is offered in this type of interstitial advertising.

For obvious reasons, the post-roll model is the least popular since, once the content is finished, what would force viewers to wacth ads? Even if we don’t allow them to skip ads within a few seconds, they will just shut down their browser, app or device and that’s it. However, on large screens it doesn’t work that badly. We’re lazy and it’s harder to turn them off.

This non-linear advertising model can be implemented in any of AVOD, SVOD, TVOD and FAST. So…

 

Why FAST?

For several reasons which, although not immediately obvious, have been proved right, and also because this is a model that works even better than certain now traditional VOD models.

Wide acceptance by viewers. By creating specific channels around certain themed content, viewers willingly accept to watch some advertising in return. This allows to increase the number viewers of specific content and make the model viable without having to resort to direct payments, which has been shown to be a huge entry barrier.

The channels have a lot of visibility. It’s easy for content aggregators to promote these FAST channels across their platform catalogs in an easier way than on-demand content. By knowing what content and when it will be watched, promotion among viewers more likely to watch such content becomes easier.

They have a better CPT (Cost Per Thousand). In a traditional linear channel, although difficult to measure -and thus the need to resort to specialized companies such as Kantar Media for this- it is estimated that the CPT of advertising, the return of an ad falls between €10 and €25 per thousand viewers who actually watch it. In a FAST channel -this being much easier to measure since it is streaming- we have metrics and comprehensive viewing reports that show that this CPT amounts to €40 or even €50. This is due to the first reason already mentioned: better acceptance by the viewer, and also because advertising is targeted, not everyone watches the same thing, and that makes it more interesting.

They’re easy to generate. FAST channels are sometimes referred to as VOD2Live, live on-demand video. This term is not really correct at all, but it does help to understand why they’re so easy to generate. Since these are linear channels based on VOD content that we have in our catalog, by using the right technology we can generate as many as we want, with the right advertising and for specific viewers, which makes a real difference between FAST channels and linear TV.

 

The real difference: a two-way channel

And here’s what really sets FAST channels apart from free linear television supported by advertising. It does not lie in the fact that it may allow us to skip certain content -including advertising- or pause and resume said content whenever we want, nor that the ad blocks are not positioned at exact times in a so-called broadcast, but in the fact that all this content and advertising are specific to each viewer, or type of viewer.

Bidirectionality has a huge acceptance among viewers. Being channels that can be dynamically generated with the right technology, it is enough to use viewer content consumption metrics and statistics to be able to generate a FAST channel exactly with the content they want to watch, without fail. Viewers access their content platform and, oh magic, find a free channel that shows exactly what they want to see.

In addition, the fact that certain specific information has been used to create that channel is not seen as something intrusive; on the contrary, it is accepted in a good way that we are offered content that we want to watch, and free of charge as well.

 

Conclusion

It looks like the squaring of the circle, and in a way it is. It is obvious that traditional linear channels are in the decline due to the lack of freedom and the too generic content they offer along with the large amount of advertising needed to make them viable.

In addition, the streaming boom -we will see how far it goes now that it seems that the bubble has been procked and watching ads in addition to paying for content is required- makes more attractive an offering that is also per payment but at least allows watching what you want whenever you want
And last, we don’t mind seeing advertising if it is of interest to us and thanks to it, we can see our desired content for free. This well-managed bidirectionality in the creation of FAST channels is the great differentiating factor of this new model.

So much so that certain operators of traditional linear channels are beginning to apply new technologies that allow, for example -through HbbTV- replacing ad blocks broadcast through DTT, with others generated specifically thanks to the metrics obtained from the relevant viewer through their Smart TV connected to the Internet.

Oh, such a magical bidirectionality. If even major traditional broadcasters find this model attractive -with age comes wisdom-, there must be something to it, for sure.

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