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15 September 2022

FAST fad lacking at IBC, poor ROIs loom

Trade shows are usually the perfect storm for hyperbole, at least until Faultline arrives, so we were surprised by the lack of a notable craze surrounding free ad-supported streaming television (FAST) at IBC 2022.

It is hard to attend a virtual summit these days where there are not at least a few sessions dedicated to the burgeoning ad-supported streaming format. However, 2022 has upheld our certainty that brick-and-mortar events are the best test of what actually brings the crowds in, as well as – more importantly – what actually keeps the lights on.

While FAST is of intrigue to many, highly profitable it is not. Many of our conversations with vendors centered around their nimble strategies for serving a low ARPU vertical.

Viaccess-Orca is seeing most traction for FAST in low ARPU markets, specifically APAC. The company’s VP of Partnerships and Security Product Management, Pierre-Alexandre Bidard, tells us that the US market is also faring well, largely because the vast demand for purely English content makes it easier for FAST platforms to operate at scale.

Europe, on the other hand, is suffering from a fragmented language landscape, which makes wholesale rights deals harder to come by.

This provides a perfect illustration of the razor thin profit margins that FAST platforms are shooting for.

Service providers can easily fall into the trap of over-investing in a black hole of content, so Bidard advises treading carefully, and that operators should be ready to pull the plug at any moment if early results are not pointing the right way.

“FAST either works or it doesn’t,” Bidard told us, arguing that anyone looking for a profitable FAST business needs to avoid capex like the plague.

“You barely invest at the start of the project, and use cloud infrastructure only,” he argued. “If it doesn’t work, cut it straight away. FAST has to be extremely optimized.” Optimization can also come at the cloud level.

The other option is you pursue FAST as a loss-leader to retain the stickiness of your wider pay TV offering. Here profit is less of a concern, meaning that your content library can be optimized to suit the tastes of your end users and the advertisers serving them.

In this latter scenario, Bidard sees FAST as an opportunity for operators to take back a revenue stream from the content owners that are selling their rights to direct-to-consumer platforms outside of the pay TV ecosystem. VO can provide the content and channels, while ad tech partners like FreeWheel or Equativ can provide the ad sales strategy.

While VO is preaching frugality first, content management system supplier Quickplay (formerly Firstlight Media) is encouraging spending like it’s the roaring twenties. Most FAST services run on a single manifest, but Quickplay is advocating that FAST services should begin personalized FAST streams. “One person’s MTV 90s Channel gets Madonna, while another person’s gets Nirvana,” Pastor explained.

The improved user experience and higher CPMs are two obvious pros, but multiple manifests also give operators a chance to turn once-syndicated feeds into fully owned and operated services with a higher revenue share. Furthermore, hyper-personalized technologies like multiple manifests provide a perfect sandbox for A/B testing when it comes to programming.

However, the turd in the punchbowl is laying there in plain sight. Faultline has heard from both vendors and FAST service providers that personalized channel streams are still years away from being economically viable.

Pastor says that Quickplay can cut costs dramatically as it is only promoting multiple manifests for customers of its flagship CMS, where the ingest of content has already taken place. “We aren’t doing FAST for anyone – we aren’t Amagi,” Pastor explained. “We could deliver it standalone, but the focus is on existing customers and proposing additional CMS functionality.”

To the surprise of no one, it turns out that the return to the Quickplay brand, following a two-year stint as Firstlight, was simply a case of brand recognition. “Everyone would say ‘who?’, so we decided to go back to the name people were familiar with,” he explained.

Had the company listened to Faultline from the beginning, it could have saved tens of thousands of dollars on the double rebrand.

While Quickplay is shooting for hyper-personalized content delivery, others are still trying to lay the supporting groundwork. ThinkAnalytics’ CEO of APAC and Europe, Samuel Sweet, says that the priority for FAST services is still seamless discovery.

FAST is one of the few novelty areas of video where viewers do not yet feel as though they’ve hit their limit just yet, so ensuring that fast becomes a natural extension of video consumption is therefore key. Sweet says that ThinkAnalytics’ advanced search platform offers the perfect springboard, merging FAST assets among more familiar VoD and linear titles within the UX.

ThinkAnalytics is also looking to get stuck in with the ad tech side of things, offering service providers granular user profiles, compiled from the company’s library of advanced content metadata and first-party viewing data via the ThinkAdvertising platform.

One point echoed by both Sweet and VO’s Bidard is that FAST is likely to blossom amid the current global economic downturn. With subscription fatigue setting in, freely available content that is presented like a premium pay TV offering will be attractive to many, even if the content on offer is rarely up to scratch.