The future of FASTs and broadcasters are intertwined. Broadcasters are helping FASTs catch up to their over-the-air channels, and FAST revenues offset traditional TV losses.
The FAST market passed a couple of important milestones in the last few weeks, and US broadcasters have been helping them do it. This week, I will look at the milestones and how the future of FASTs and broadcasters look inextricably linked. But first…
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FASTs catch up to over-the-air (1:30)
According to data from Hub Entertainment Research, over-the-air (OTA) antenna usage has remained steady in the US for the last several years. About a third of consumers say they watch TV via an antenna, and 10% say they rely only on one.
Interestingly, the rollout of NextGen TV does not seem to be impacting the usage of OTA. Proponents claim it will soon be available to 75% of US households by the end of 2023, and six stations in the Philadelphia area began broadcasting in the format this week. However, the Hub data shows it does not seem to motivate viewers to start watching OTA TV.
Over the same period, the number of people using free ad-supported TV (FAST) has exploded. TiVo says the number of free TV services used by US and Canadian adults increased from 2.4 in 2021 to 3.9 in 2022. Pluto TV confirms the trend, with monthly active users almost doubling between 2020 and 2023, from 43 million to 79 million.
Today, about the same number of people are watching live channels via FASTs as are watching them via OTA. TiVo says that 64% said they watched FAST services, with about half watching “live channel” content.
The Roku Channel offers network-owned local news channels from ABC, CBS, Fox, and NBC (4:40)
Broadcasters are finally making the move to FASTs in earnest. There have been many local channel launches over the last few months from station owners like Sinclair, Paramount Global, and NBCU. This week, The Roku Channel launched 30 or so local channels from CBS and Fox. The channels are franchised by CBS-owned Pluto TV and Fox-owned Tubi and cover a basket of major DMAs, including Seattle, Los Angeles, New York, Atlanta, Detroit, Chicago, Boston, and the Bay Area.
The Desk claims that The Roku Channel is the first FAST service to launch network-owned stations from each of the big four broadcasters. But this really isn’t a significant milestone since other services have affiliates from the top four broadcasters. For example, LocalNow, which specializes in local TV stations, has many affiliates from each of the big four available.
There are some caveats about the FAST versions of the local stations. They generally only provide content that the stations own, not network-provided content. So, that means local news and interest shows are programmed into the channel, and Jeopardy, SNL, and The Late Show are not.
Also, if you live in New York or LA, you probably have several local stations to choose from. You’re probably out of luck if you live in Zanesville, Ohio. (NBC WHIZ-TV.)
The top 14 FASTs have 5000 channels available (7:40)
Stream-Metrics.com says the top 14 FAST services have about 1900 unique channels available. All the channels are available to anyone in the US with an internet connection.
However, availability depends on a viewer’s proximity to a major metropolitan area. For example, residents can access three channels in Zanesville, Ohio, while New Yorkers can watch 87.
FAST channels are being added all the time. So, expect the number of unique channels to climb over 2000 soon. Along with Local TV channels, the fastest-growing category is so-called single-IP channels that show only one show. For example, this week, NBCU announced the availability of a bunch of its shows in a single IP channel form on The Roku Channel. You can find channels devoted to Murder, She Wrote, Little House on the Prairie, and Saved By the Bell. NBCU also launched the Universal Crime channel, featuring episodes of classic shows like Columbo, Kojak, and The Rockford Files. Expect more soon.
FAST and broadcaster futures are linked (11:30)
FAST revenue is becoming increasingly important to broadcasters. For example, in the latest quarter, For Corp said that ad revenue for the quarter was marginally lower than the same quarter last year ($688M versus $698M.) The television side of the equation saw continued declines, but growth at Tubi was instrumental in making up the difference.
Pluto TV provides the same support to Paramount Global. TV channel ad revenue was off 10% in Q2 versus last year’s quarter, a decrease of $228M. Meanwhile, direct-to-consumer ad revenue grew 21% in the same period to $441M.
As the traditional TV business continues to decline, watch broadcasters move ever more deeply into the FAST market.
