The FAST industry is showing signs of growing pains! Here are four challenges FAST tech provider Amagi sees confronting FAST viewers, content providers, services, and advertisers.
At the OTT.X X Fronts on Tuesday in LA, Siva Natarajan, Head of New Product Initiatives & Business Development at Amagi, laid out four challenges facing the FAST industry. Each relates directly to the four main constituents in the FAST ecosystem: viewers, content providers, FAST services, and advertisers.
Viewers: Too many channels
Each of the top FAST services in the US provides more than 300 channels. Mr. Natarajan says so many channels make it impossible for viewers to find one they might like to watch. He pointed out that each service takes a one-size-fits-all approach with little personalization for an individual viewer’s preferences.
He proposed two possible solutions to the problem, both rooted in personalization. Firstly, customize the list of channels the guide presents based on the viewer’s interests. Secondly, brands could use viewer data to customize the content in a channel.
Siva Natarajan – Amagi
There are some problems with the solutions that Mr. Natarajan suggests. For example, many FAST viewers do not log in, so no personalization information is available. It’s also unclear how pleased content providers would be if their channel were hidden from many service users. However, personalization is an important component of any solution to the problem.
Content providers: limited shelf space
To try and help with the channel overload problem, service providers are imposing an artificial limit on the number of channels available. As more content providers move to take advantage of the FAST opportunity, there is increased competition for the limited number of channel spots available.
Inevitably, service providers have begun to focus on more well-known and popular content. On the other hand, niche and enthusiast channel providers are finding it very difficult to get carriage. In other words, the diversity of content available on the services is declining.
FAST services: Lack of service differentiation
Mr. Nataranjan says more than 600 FAST channels are available in the US. With so many channels available, you might expect great variety across the 20 or so FAST services accessible in the US. However, most services seem to be trying to address the broad entertainment market with the most popular channels, leading to little real differentiation between them. There isn’t much differentiation in the experience either, with each service providing similar ad loads and tools for navigation.
Perhaps it is time for the emergence of more targeted FAST services, looking to address specific groups of viewers. For example, ViX is a Spanish-language FAST service, and Electric Now is targeting the fandom community with SciFi, action, thrillers, and Fantasy. Sharper differentiation between FAST services could help viewers, advertisers, and content providers better focus their efforts.
Advertisers: Lack of ad unit innovation
Though service providers like Peacock provide plenty of ad innovation in their on-demand content, there is little to be found in linear channels from FAST services. Mostly, 15, 30, and 60-second video ad units rule the medium. Mr. Nataranjan thinks there needs to be more innovation in linear channel ads. He suggested virtual product placement (VPP), where a product can be digitally inserted into a scene in a show or movie. The approach is something Amagi is well equipped to support after its integration with Mirriad AI, which specializes in VPP. There are plenty of other options, including overlays, picture-in-picture ads, and response ads.
Some providers are innovating their linear ad units. Some ads in Amazon’s Freevee are interactive. Also, Vizio introduced Jump View ads last year, allowing content providers to connect a viewer with more episodes of a show they were watching on linear channels. That said, most ads seen in FAST channels are plain old videos!
Mr. Nataranja’s challenges are by no means a complete list of problems facing FASTs. For example, platform fragmentation is causing serious problems in every part of the ecosystem. And while the industry has done a good job replicating the cable business – without the subscriptions – the ad experience leaves much to be desired. That said, the challenges Mr. Natarajan laid out are real and must be addressed for the industry to prosper.
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