FAST vs. Linear TV: Part 2 - What Are The Real Differences?
FAST can deliver the promise of true personalization intertwined with mass market reach. This heady mix can maximize advertising revenues from the large audiences currently turning away from traditional Pay-TV services towards free streaming services.
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Some clarification is needed about the key differences between FAST and Linear TV. Following Part 1’s description of the fundamental technical differences between the two delivery models, here we focus on some of the challenges facing FAST channels and how technology is driving progress.
Reconciling Viral & Personalized Content
It is only natural to expect personalization of viewing experiences to be a standard feature of all our future content services. VOD services surged in popularity for a very good reason – people like to have choice and freedom to choose. This natural human desire is why FAST channels will drive towards personalization, serving us with the content that we want to watch, when and how we prefer to watch it.
However, it is also true that our natural human condition makes us want to be part of a community, whether big or small. For much of the media we consume, we generally like to share, comment, watch, and talk about it, together. This need for togetherness is how we generate buzz and hype for popular content, and why popular content drives the biggest audiences and, as a result, the biggest advertising revenues.
These viral viewing moments are what the largest advertisers want to invest in, to reach the largest general customer base. It is obviously why the retail, automotive, fast-moving consumer goods, food, and drinks industries are the major advertisers during the largest TV events. While FAST is a model that can theoretically reach very specific levels of personalization, can the FAST delivery model succeed even for the largest viral events?
From a technical perspective, delivering specific content to meet an individual’s preferences is much easier with FAST. Because a single stream can be personalized to a viewer (or relatively small group of viewers), it is possible to combine content and ads to meet the viewer’s specific preferences. The content and ads held in a central storage system can be delivered on-demand, and on a schedule, to fit the viewer. And the extra bonus for content that is streamed is that this can be achieved efficiently, and with minimal up-front investment by the content provider, because it uses pay-as-you-go internet-based technology.
It is fair to say that the personalization opportunity exists precisely because of the latest technical efficiencies in the distribution of the content. Instead of buying hardware-based encoding and compression solutions plus satellite capacity for a linear channel which can cost millions of $/€ /etc. per year, FAST needs an ABR encoding, packaging and origin platform, and one or more CDNs. This software-defined infrastructure running on standard COTS hardware, and available on a self-service basis from the major cloud-providers or from media-centric managed service businesses, is much cheaper to set up and operate than traditional Linear TV. This lowers the barriers to entry for content that has smaller audiences, which perfectly suits the FAST model.
Through advances in cloud-processing, we now have new ways to create on-demand streaming channels in the final distribution technology domain (rather than in the contribution technology domain), which is laying the foundations for truly personalized linear channels. This approach uses pre-encoded and pre-segmented content and stitches it together. It delivers a much lower cost of channel production because the distribution bitrates are smaller than in the baseband contribution domain, so less compute is required, and the process is more efficient.
As Johan Bolin of Agile Content states, “Perhaps our industry has been a little over-excited about the re-invented business model called FAST and forgotten about the technology enabling a new era of TV. At the core of FAST sits technology that enables very cost-effective curation of channels and with a cost structure based on viewing rather than high fixed costs per channel. No matter how we use this technology to create TV that is free or not, or ad-supported or not, it is certainly streaming TV taking advantage of the benefits of the internet to deliver a more viewer-centric experience.”
The Importance of Scheduled Content
Personalization sounds great, but what does it mean for creating the viral experiences that are a hallmark of linear, appointment-TV?
In whichever way a FAST channel is created, scheduled content is a key aspect to consider. Just as linear TV and SVOD platforms create appointment-TV moments for pre-recorded content that drives large concurrent audiences, FAST needs to do the same. If FAST channels can achieve this, they can deliver both powerful audience segmentation as well as large, generally addressable audiences.
Let’s consider that FAST can have 3 general forms. First, it can be a playlist created from VOD assets. Second, it can be a curated, scheduled set of programmes. Third, it can be either of the former, with Live content added in.
Live content makes things extra interesting. In what could be a relatively niche FAST channel, how do larger Live events take place? Should they be like “breaking news” alerts and enter in across a range of channels simultaneously? Should they be simply scheduled in the EPG like they are today? Is there a way to make a scheduled event on one person’s personalized channel also present or even shareable into someone else’s personalized channel? The community-based viewing experience is an important factor for FAST channels as we consider how FAST could replace Linear TV in the long run.
Some industry experts foresee linear viewing experiences porting across to FAST services, because the lean-back, EPG-based linear viewing model is so familiar to us. The same experts also see FAST channels leveraging the flexibility in technology to experiment with viewer preferences and quickly scale up the most successful models. And they also see how FAST channels are going to need to adopt some Linear TV disciplines such as protecting brand security with robust delivery, and adoption of standards from Linear TV like loudness control and frequency of ad delivery.
It seems that in the near-term (i.e., the next 5 years) we will see a fairly even distribution of content delivery methods. Terrestrial over-the-air, CableTV, IPTV, Satellite, and OTT are likely to co-exist with sizeable percentages of viewers on each technology platform. But as the pendulum swings towards the all-IP world, and the OTT model of content distribution scales up to overtake the others, one of the big factors to consider in creating the viral content and large prime-time audiences for a FAST channel will be the network capacity to handle the demand.
CDNs are already stretched by the peaky viewership patterns of large live events that reach very significant percentages of the population in any country. Broadband generally is being built out to handle the demand, with many developed countries now averaging over 50Mbps per household. In theory this can handle several simultaneous HD or UHD streams – enough for almost every household. But the Edge capacity of the CDNs, and the core network and peering network capacity of ISPs, is generally not sufficient to manage prime-time viewing numbers – at least not at the required bitrates and latencies to satisfy viewers on large-screen TVs. A separate article will explore this subject in detail, but this could be a constraining factor in how FAST channels can reach large prime-time audiences.
The “A” in FAST
There is limited data available at the moment about the effectiveness and value of ad spots in FAST. The value of FAST overall is growing, as demonstrated by the growing channel count that has gone from almost 0 to over 1500 in the USA alone since 2019. Subscription fatigue is also helping drive the popularity of FAST. TiVo reported in Q4 2022 that the average household in the USA had 9 ways to access content.
Leading Content Providers are experimenting and investing in all types of content distribution methods to maximize revenues. An advantage of the FAST model is that it delivers additional user data about the audience that is not available in Linear channels, which increases the visibility of the consumer profile, and therefore increases the value of advertising inventory. Studies often report that advertising effectiveness is enhanced when an ad is delivered to the right person in the right context. FAST helps advertisers to achieve this outcome.
Media guru, Evan Shapiro, shared his views with us on the value of advertising in FAST versus Linear TV, “Linear networks have a smaller set of access points for advertisers to deal with when compared with FAST. Therefore, there are fewer partners with whom to share revenue (i.e., the media companies and largest pay-TV platforms), and simpler processes for buying ad inventory. FAST channels, on the other hand, are available on a wide array of device platforms like Roku, Samsung, LG, and Vizio, as well as aggregator platforms like Pluto, FreeVee, Sling, Xumo, Local Now, and many more. Generally, the channels and the platforms are both selling available ad inventory. Viewership measurement, while it can be accurate on each platform, is very difficult to aggregate across platforms to deduplicate viewers. Buying ads is also more complicated. Ad agencies can be frustrated by the maze of different platforms to work with and the myriad of back-end programmatic ad platforms. FAST has a way to go in this area to catch up with the mature world of Pay-TV in order to realize its full monetization potential.”
FAST has grown quickly, meeting a clear consumer demand for a free, lean-back viewing experience that is more personalized and easier to access than linear TV. The USA has seen the fastest growth in FAST services given its specific market dynamic of Pay-TV platforms that have long-dominated the industry. In Europe, FAST is now on an upward trend. Amagi reported that between Q3 2021 and Q3 2022, there was 90% growth in Europe’s FAST channel count, 50% growth in hours viewed, and 100% growth in ad impressions.
It could be argued that building brand awareness is best done to the largest audiences on the most wide-reaching TV services. But for selling products and services, it could be argued that addressing a very specific and well-defined audience is best. For advertisers, FAST introduces a powerful new way to increase their marketing ROI by meeting both needs through the same medium.
From a technical perspective, we are at the beginning of a personalization revolution thanks to technology advances. This will continue, but the combination of individual personalization and mass-audience standardization in FAST will need to be figured out. Network capacity to allow FAST to truly replace Linear TV will also need to be in place.
Depending on your own generation and frame of reference for the world of television, the concept of FAST can feel either very similar or very different to Linear TV. But however you feel about it, we can at least conclude that there is an important space in our media ecosystem for free, ad-supported services that can deliver to an audience of one as effectively as they can to an audience of millions.
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