Note: This guest column extrapolates from the VIP+ report “Life in the FAST Lane,” which delves into the state — and future — of free ad-supported streaming TV, available only to subscribers.
The streaming landscape is facing a period of immense growth — and tumultuous disruption. In response to a record-breaking number of global subscribers during the COVID-19 pandemic, many large streamers bolstered headcounts to meet demand, only to cede to major layoffs as the pandemic waned, the economy wavered and their level of growth proved unsustainable.
And with an increasing number of streaming video on demand (SVOD) platforms entering the market, driving acceleration but furthering fragmentation, it’s now far more challenging for content owners to secure a slice of viewers’ engagement — and wallets.
Amid the chaos, niche SVOD content platforms and free ad-supported streaming TV (FAST) are two services carving their own corners of success. While this proliferation contributes to both competition and splintering within the market, the unique value proposition for users and brands alike is helping to drive the industry forward.
And with that, specialized SVOD platforms and FAST offerings, especially in concert, are uniquely positioned to engage viewers with customized content, reach them at scale and unlock previously unforeseen revenue streams.
The Rise of the Niche
While relatively small, niche platforms can be mighty. In fact, the growth of specialized platforms — with cohesive and tailored content models and unparalleled engagement — is outpacing that of the established streaming giants.
Data released by Antenna in the second half of 2021 found that 10 specialized SVOD platforms (including AMC+, BET+, Cinemax and CuriosityStream) saw a compound annual growth rate of 74% over the past two years, nearly double the 38% growth rate of the marquee platforms (Netflix, Hulu, Apple TV+, and HBO Max).
This spike isn’t surprising, as on one hand the streaming behemoths are tasked with curating a breadth and depth of verticalized content across their massive audience bases in a manner that maintains a high level of personalization for specific cohorts. No channel can be all things to all people.
Niche players, on the other hand, are in many ways better positioned to cater offerings to their more honed user bases. With authentic expertise in their particular topic areas, they’re able to understand audiences’ content and frequency needs more granularly and thus continually sate their ravenous hunger by filling in the gaps the giants struggle to address.
Of course, not all emerging niche streamers function the same. Some can more efficiently access their audiences through pairing with large platforms that offer significant overlap with their consumer base, as evidenced by Endeavor’s Professional Bull Riders RidePass. In July 2021, RidePass inked a deal with Pluto TV to convert from subscription to ad-supported.
This made PBR the first dedicated live sports channel on Pluto TV, with marketing efforts able to tout “thousands of hours of great western sports programming now available for free” without PBR needing to invest in the same amount of audience development costs.
The key for these specialized players is to exist at the intersection of value creation for the niche customer and the ability to find enough users for meaningful revenue growth. UFC Fight Pass, for example, is a must-have for any fight fan, with a full slate of powerhouse content beyond the actual bouts.
The platforms seeing the strongest and most sustained increases have figured out their differentiated value proposition — hence, what makes theirs a magnet for users each month.
FAST as an Accelerant
And then there’s streaming’s noteworthy disruptor: FAST. Back in January, Variety Intelligence Platform partnered with FAST channel creator Wurl to gauge consumer sentiment on TV offerings and found large channels that launched a FAST option saw huge increases in average viewer counts and monthly viewing time after two years. Average monthly viewers more than tripled (208%), while monthly viewing time nearly quadrupled (280%). Also notable was that large studios running FAST platforms brought in an average of $23.2 million in additional revenue over those two years.
And FAST can work its monetary magic on streaming platforms big and small, niche and beyond, serving as a complimentary strategy to what a service is already doing in the SVOD space. The format allows for both an owned-and-operated subscription product and free, distributed, ad-supported products for more price-sensitive users.
For users who may not be as comfortable with media’s brave new worlds, FAST provides a linear viewing experience that feels similar to traditional cable but without the cost.
While many brands have newly generated content that holds its treasures behind a paywall, FAST provides a strategic outlet for providers with legacy content to spare. Sports leagues and teams are great candidates to launch FAST channels given their vast — and generally underutilized — libraries of highlights, studio shows and older matches.
The NFL is a perfect example, as currently there are four FAST services carrying the NFL’s FAST channel: Peacock, Pluto, Tubi and Vizio WatchFree+. This is anticipated to grow with the start of the new season, with Amazon-owned Freevee a logical go-to for this channel given Prime Video’s Thursday Night Football rights. VIP+ senior media analyst Gavin Bridge sees lots of opportunities for viewer enticements.
FAST is also widely leveraged by content owners to offer viewers access to classic movies or older seasons of their most popular TV series. For niche platforms, FAST has two main benefits. First, as mentioned, it’s an additional way to boost access and monetize existing intellectual property (IP) while scaling up audiences across multiple distribution avenues outside of their owned-and-operated apps, such as the Roku Channel, Amazon Freevee and Samsung TV Plus.
By reaching new pools of viewers with advertising-fueled offerings, niche platforms can participate in an additional — and once unforeseen — revenue stream.
Second, and more important, FAST acts as top-of-funnel lead generation and awareness for established media companies. With increased distribution, strong content and strategic channel placement, brands can access eyeballs they might not have been privy to before.
The Bottom Line
Throughout the pandemic, the streaming industry saw an influx of new entrants introduce and enhance themselves by leveraging the full breadth of their archives alongside a multipronged distribution strategy.
The adoption of FAST by niche platforms has proven itself as a way to reach passionate audiences in an industry poised for continued growth, with myriad advantages for deploying both an SVOD and FAST strategy for viewers and content owners alike. In leveraging FAST, providers can unlock advertising revenue, reach new audiences and steer users into a more direct relationship at a premium price point.
To stay relevant moving forward, brands seeking to stand out should strive to offer something truly differentiated in an increasingly crowded marketplace. Embracing specialization and FAST is the key to maximizing the value of legacy content, both sharpening content owners’ competitive edge and capitalizing on the pandemic streaming boom.
Fred Santarpia is a digital media and business transformation expert. He currently serves as president of Endeavor Streaming, where he spearheads the company’s global expansion strategy.