4 Challenges of Free Ad-Supported Streaming TV

By The Zype Team on November 16, 2022

Free ad-supported streaming television (FAST) is rapidly growing, and big players like Viacom and Comcast are diversifying their portfolios by investing in it. By the end of 2021, the FAST market's size was almost equivalent to that of advertising video on demand (AVOD), with a household penetration of 24 percent.

FAST is a lucrative space for content creators, but it can come with challenges. It’s extremely important to weigh the pros and cons when deciding whether to build a FAST channel strategy for your business. Notwithstanding, the pros outweigh the cons, and investing in FAST is a good idea.

Hidden Costs of FAST

FAST has a few drawbacks with respect to advertising, data collection, audience, and aggregators.

1. Advertising

With a FAST channel, you generally showcase your content on a third-party platform. That platform usually controls the ad inventory, giving you no control over what ads your users see. The ads are sometimes repetitive, making the viewing experience boring and monotonous.

An even bigger problem with relying on ads for revenue is their low fill rates. Even if you get an ad fill, it's possible it may not render for various reasons, such as the user scrolling away or latency due to slow internet connections. 

If you partner with a popular platform that has a large audience, your content can reach more viewers. The catch is that such platforms end up taking a cut from your ad revenue, lowering your overall income from advertisements. If you're looking to monetize primarily through ad revenue, giving a percentage of earnings to your host platform can prove to be counterproductive. 

2. Data Collection and Analytics

Partner platforms collect user data for later analysis, engaging in a continuous process of improving the user experience. While they collect information about user behavior, they don't pass all of it to content creators in a structured manner. A lack of organized data about how viewers engage with your channel can limits you from making further changes so it’s more relevant to your audience.

3. Audience

If you're new to the FAST space, it can be challenging to acquire new users as you face heavy competition from dozens of other FAST channels on platforms like PlutoTV and Roku. Customer acquisition can prove to be a costly, time-consuming affair and drain your resources if you're not operating with deep pockets. 

4. Aggregators

Sometimes, the challenges of FAST depend on the type of aggregator you've chosen, which could be media company-owned or an original equipment manufacturer (OEM).

Media Company-Owned FASTs

Your FAST channel aggregator could be owned by a large media company like Paramount (Pluto TV), Fox (Tubi), or Comcast (Xumo). These large aggregator platforms are available on multiple devices, which can make it difficult to get consistent, consolidated user data, leaving you confused about your channel’s next steps.

Original Equipment Manufacturer (OEM) FASTs

Some device manufacturers, like Samsung, have their own platforms for hosting FAST channels. This limits your channel's availability based on the device and restricts the number of audiences you can reach. 

Such platforms are also more rigid in their content acquisition strategies, which can make it difficult to partner with them since they must acquire licenses for all their content—and that can prove costly.

Should I Invest in FAST?

FAST may have several challenges, but so does any other technology you decide to invest in. Don't let the prospect of these drawbacks discourage you from placing your bets on FAST—it's a growing market with immense potential.

A lot of users are turning to FAST since subscription video on demand (SVOD) content is scattered across multiple over-the-top OTT platforms, and users don't want to pay for an array of subscriptions. They're looking for free content and don't mind ads as much, providing ample opportunity to engage them with your FAST channel.

If you want to supercharge your FAST strategy, download our free white paper and get essential tips for launching your channel.

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