Three years ago, few people would have predicted the incredible success of free ad-supported streaming TV (FAST) channels and their impact on the over-the-top (OTT) streaming strategies of some of the most prominent players in media and entertainment. Similarly, many today might be surprised by the notion that market developments surrounding the FAST channel phenomenon will make interactive real-time user experiences supported by WebRTC streaming platforms integral to FAST operations. But it doesn’t take a crystal ball to see what’s in store as providers of FAST services search for ways to sustain and increase revenues that depend on how many people see their ads.
As reported in this white paper, multiple WebRTC-based real-time interactive video streaming platforms, including Red5 Pro’s Experience Delivery Network (XDN), are being used to add a wide range of compelling features to OTT video content. For the reasons described below, it’s just a matter of time before FAST channel providers become part of this trend.
Initially, FAST providers will likely seize the opportunity to bring ancillary real-time video feeds into play with conventional one-way unicast video streams to drive viewer engagement. They’ll be able to support personalized overlays of graphics and video clips, content-related watch parties, virtual gatherings of fans, livestream shopping, and other features with their linear and on-demand content. And as FAST services become ever more prominent, they will become part of a broader OTT service migration to real-time interactive streaming as the foundation for content distribution.
Before exploring why FAST providers need WebRTC streaming support, it’s helpful to consider where things stand in this explosive market. Everything points to a vibrant dynamism that ensures today’s service profiles can’t be taken as the final word on what FAST providers will be offering in the months and years ahead, other than the fact that, by definition, there will never be subscription fees.
Today, the lion’s share of FAST content is amassed from old TV shows and movies with low licensing costs and growing volumes of low-budget original niche programming. Rather than following the subscription video-on-demand (SVOD) model, FAST services assemble content for scheduled delivery linearly in themed channels, often with time-shifted viewing options. Movies are grouped thematically for access on demand.
FAST services have taken off because the ROI with addressable advertising allows OTT providers to satisfy growing consumer demand for free services. Traditional linear TV 30-second advertising spots typically garner between $10 and $25 per 1,000 viewer impressions (the cost-per-mille or CPM rate). FAST providers, however, are generating $40-$50 CPMs using dynamic ad insertion (DAI) technology to target ads based on everything from content context and geographic locale to individual user profiles.
FAST viewership is soaring. At the end of 2021, eMarketer reported close to 90 million monthly viewers of FAST channels in the U.S. nScreenMedia predicts the U.S. FAST audience will expand to 216 million monthly viewers by the end of 2023.
nScreenMedia also predicts U.S. FAST revenues will nearly double from $2.1 billion in 2021 to $4.1 billion in 2022. Variety’s latest report on the FAST market predicts the total will top $6 billion by 2025.
An examination of the market landscape reveals at least six major reasons why FAST channels should be expected to use WebRTC streaming support.
1. Combatting Audience Fragmentation Requires Service Differentiation
The number of FAST service providers has surged rapidly, starting in the U.S. and now expanding worldwide. At the end of 2019 in the U.S., there were just eight services in operation. Now, by Variety’s latest count, 22 services offer more than 1,400 FAST channels. And, as Variety notes, more channels are constantly coming into the market. There is increasing pressure to come out on top as ever more competitors vie for ad views.
Many of these FAST newcomers participate in the broader advertising-based video-on-demand (AVOD) marketplace. For example, the sports-centric AVOD operator Fubo TV now has 60 FAST channels in operation and is on its way to 100 by year’s end.
In the Android marketplace, Google says FAST services will soon be part of Google TV, the successor to Android TV, as an app used with aggregations of OTT services to support multi-service UIs and recommendations. This will make FAST services available to OEMs using Google TV, such as smart TV suppliers Hisense, Sony, and TCL.
Even local news broadcasters are getting into the act, which “is one reason the [FAST] count is trending up,” Variety says. Inevitably, the report adds, “contraction will happen at some point. A market that can sustain 20-plus services seems unrealistic.”
FAST services are especially vulnerable to the audience fragmentation that’s cutting into service providers’ efforts to remain viable in the crowded OTT video space. As a study performed by Unisphere Research and Streaming Media attests, the saturation of OTT services across all categories has fragmented audiences to the point that 67% of all services have fewer than 1,000 monthly average users. More than a third generate less than $100,000 in annual revenues.
This reality leaves FAST providers with a need to do everything they can to increase the appeal of their services with compelling enhancements to user experience (UX). Such approaches to differentiation are critical in the FAST space, given that it’s hard to rely on content differentiation when most providers are licensing their most appealing content from the same pools of syndicated TV programming.
In recently issued observations on the FAST market, Barclays Group media analyst Kannan Venkateshwar notes content overlap in FAST services tops 80%. This contrasts with the 3.9% and 9% levels of overlap Venkateshwar cites, respectively, for Disney + and HBO Max.
2. Major M&E Brands are Making FAST a Pivotal Part of Growth Strategies
Ever more big media firms and other well-heeled entities are getting involved in the FAST market, often with tight tie-ins to existing AVOD services. These strategies represent commitments to FAST that are backed by the wherewithal to survive whatever contraction lies ahead by leveraging the kind of service differentiation enabled by WebRTC platforms.
This FAST shift into the OTT mainstream kicked off in 2019 when Viacom, now operating with CBS under the Paramount banner, acquired the leading FAST provider Pluto. As with other entities in the OTT space, Paramount is marketing Pluto channels as a way to draw users to its AVOD service, Paramount+. As noted by TV[R]EV lead analyst Alan Wolk in a recent Fierce Video article, this tiered-service approach to using FAST “is the way of the future” in OTT services.
Other major entities joining the fray include:
- Comcast’s NBC Universal with the launch of Peacock Free.
- NBCU parent Comcast with purchase and expansion of the Xumo FAST service in a joint venture with Charter Communication.
- Fox Corp. with the acquisition of FAST service Tubi.
- Amazon with Freevee, formerly known as IMDb TV, which it has expanded into Europe.
- Cable networks AMC and A+E, both of which announced they were launching many new FAST channels in 2022.
- Warner Bros. Discovery, which recently announced it was launching a FAST service, leaving Disney as the lone holdout among major studios.
3. Smart TV FAST Platforms Need More Bells & Whistles
As tabulated by OTT viewing tracker Conviva, connected TVs (CTVs) have become the most dominant viewing platform for OTT video services, led by smart TVs, which represent 32% of the global TV market base, according to Strategy Analytics. By 2026, smart TVs will be in 1.1 billion homes representing 51% of the market, the researcher says.
Consequently, smart TV OEMs have amassed enough viewers to make it worthwhile for FAST service providers to gain exposure on their platforms through revenue-sharing partnerships. So far, the smart TV services include Samsung’s TV Plus, LG’s Channels +, and Vizio’s WatchFree, all of which rely on substantially the same channel lineups from FAST aggregators.
There’s a lot at stake in light of how FAST services play into OEMs’ long-held plans to create recurring revenue models as price competition squeezes their margins. Garnering ad views essential to success requires drawing audiences away from the TV and streaming services people normally watch on their TV sets.
One way to make their FAST services more competitive would be to add features people may not be getting with their premium content. OEMs could get ahead of the real-time interactive streaming curve by integrating their smart TVs with a highly scalable WebRTC platform. This would allow them to create an environment their developers and those of their FAST affiliates could leverage to deliver a new realm of video-rich interactive experiences,
4. FAST Services Are Evolving Ever Closer to Mainstream Service Profiles
There are multiple developments in the U.S. and elsewhere where the lines between FAST and mainstream service profiles are blurring. The closer FAST channels get to premium service profiles, the more likely they’ll be turning to the same uses of WebRTC platforms that are beginning to take hold in AVOD services, especially in the case of live event programming.
The revenue-generating power of DAI and consumers’ preferences for free content are already making the case in some FAST quarters for more aggressive content strategies. For example, some FAST providers who also operate AVOD services are making more of the premium content available with their FAST channels.
One case in point is Germany-based Rlaxx TV. The operator offers an integrated hybrid model that enables seamless surfing across the programming interface between its FAST and AVOD content for AVOD subscribers and, for those who are not, a ready inducement to sign up for AVOD from the FAST UI.
Another entity taking FAST content enhancement to a new level is the independent British broadcast consortium ITV, which recently announced the launch of the country’s first integrated advertising and subscription OTT platform. The company offers a full lineup of broadcast linear and premium programming on both versions of the services and additional premium content at the ad-free subscription level.
In the U.S., Comcast has been especially aggressive in blurring the lines between AVOD and FAST services. The Peacock Free FAST service, along with more than 7,500 hours of on-demand movies and shows, offers some live sports and news programming and next-day access to all the linear channels streamed over Peacock Premium.
Meanwhile, efforts abound to bring higher value to FAST services with investments in original content, with ever more providers following Roku, Tubi, Freevee, and others who, in 2021, began commissioning original content to increase the appeal of their channels to viewers. And sports, long viewed as the crown jewels in efforts to build paid OTT subscriptions, have also entered the FAST content discussion.
One sign of new thinking about sports in the FAST arena was the launch of ten live-streamed sports channels by Fox’s Tubi in late 2021 as part of what was billed as an ongoing “Sports on Tubi” initiative. So far, these channels have stopped short of the live sports offerings on TV networks, with much of the scheduled linear programming devoted to highlights and daily commentary.
But Tubi appears ready to go further. As reported by nScreenMedia, when Tubi rolled out its sports channels, it cited a Fox consumer survey that found 65% of sports fans subscribing to AVOD services would rather watch ads than pay for a service that delivers the sports they follow. “Given the big interest in free sports, expect Tubi and other free ad-supported services to lean into the sports opportunity,” commented nScreenMedia analyst Colin Dixon.
5. Personalization of FAST UX is Gaining Momentum
Personalization of user experiences is becoming an important differentiator in FAST service evolution. A widely pursued first step in this direction is the creation of intelligent guides to multiple FAST channels that employ recommendation engines to deliver personalized options to viewers.
All the previously mentioned smart TV services use advanced discovery with their guides. Another practitioner of this approach is Fubo, which sees personalization in its use of FAST channels as key to drawing viewers to its AVOD service.
With consumers viewing close to an average of ten different streaming services, including FAST, as calculated by TiVo, households are spending about the same amount on OTT services as they do on cable, noted Fubo CEO David Gandler in a recent call with analysts. He said Fubo believes combining personalized recommendations of what’s available on its FAST channels with what’s behind the paywall will provide consumers with a more appealing and much cheaper way to get what they want.
This aggregation model “offers consumers a streaming platform with unique content both live and on-demand, and that is presented to them through a personalized experience,” Gandler said. Such perspectives on the importance of personalized experiences in the use of FAST with premium services increase the likelihood that service providers will want to exploit the power of real-time interactive streaming to expand the range of such experiences.
6. There Are Many Routes to Putting WebRTC Platforms to Use with FAST
Virtually all viewers of FAST services can benefit when personalized feature enhancements to core video streams are delivered in real time via WebRTC. That’s because the processes related to device renderings of WebRTC-streamed content are supported by the five major browsers (Chrome, Safari, Firefox, Edge, and Opera). As a result, real-time interactive applications can be added on a per-stream basis without the use of plug-ins.
This technology has spawned a vast range of use cases in OTT services that go beyond what can be done with graphics inserted with the content packaging processes employed in unidirectional HTTP streaming (i.e., HTTP Live Streaming [HLS] and MPEG-DASH). With WebRTC, applications running as overlays or embedded elements synchronized to specific sequences in the primary stream or as sidecar options linked to core content can provide real-time interactivity, including video-rich social engagements among viewers.
But maximizing the benefits that come with real-time video interactivity would be out of practical reach for most providers were it not for the existence of the previously referenced real-time interactive streaming platforms that provide a ready-to-use environment for WebRTC-based applications. For example, service providers utilizing Red5 Pro’s XDN platform deliver interactive video-rich applications that can scale at high quality to engage virtually any number of simultaneous users over global distances with end-to-end latencies below 400ms.
As described in documents on the Red5 Pro website, XDN architecture achieves these performance parameters with fail-safe redundancy and TV-caliber quality through automated orchestration of hierarchies of Origin, Relay, and Edge Nodes in one or more cloud clusters. XDN Nodes can be deployed in seamless cross-cloud configurations leveraging pre-integrations with major suppliers like AWS, Google, Microsoft, Oracle, and DigitalOcean or through other cloud integrations easily achieved with Red5 Pro’s use of the Terraform multi-cloud toolset.
XDN architecture employs the Real-Time Transport Protocol (RTP) as the foundation for streaming via WebRTC but can utilize other protocols when browser support is absent, or conditions call for alternatives. For example, Real-Time Streaming Protocol (RTSP), often the preferred option for mobile devices, can be activated through Red5 Pro’s iOS and Android SDKs.
Other formats that can be ingested and retained on the XDN platform include Real-Time Messaging Protocol (RTMP), Secure Reliable Transport (SRT), and MPEG-Transport Protocol (TS). Whatever protocols are involved, the XDN platform provides full support for the multi-profile transcodes used with ABR streaming to deliver content at bitrates appropriate to each user.
FAST service providers and OEM aggregators can instantiate the XDN platform as a readily available infrastructure for any personalized application they want to deliver with their primary content. Of course, such applications can be integrated with core content that is also streamed over the XDN infrastructure in real time.
While at some point FAST providers may want to join other OTT operators in replacing HTTP with WebRTC streaming, for now they can benefit from the use of XDN infrastructure to support real-time interactive applications as ancillary enhancements delivered with HTTP-streamed content. In addition, providers can tap the platform to support the delivery of interactive applications as overlays or as hosted spaces for social engagement among viewers of a given content stream.
Often apps are developed with easy-to-use tools from third parties who have integrated with XDN architecture. This blog describes some use cases on XDN infrastructure used by one of the leading overlay platform providers, Singular.Live.
In the case of overlays, XDN infrastructure allows providers to deliver data and/or video clips pertinent to each user’s interests. For example, sport fans might be given the option to open a window that streams clips of their favorite players’ latest exploits or conveys how their fantasy sports teams are doing in real time on game day. Business networks can spin up personalized streams of news and stock performance related to viewers’ investment interests.
Providers can also use XDN-streamed overlays to add features that weren’t included in the original content production process. For example, FAST providers can bring betting and polling into play with the content they’ve amassed in their linear channels or offer purchase options tied to products appearing in the primary streams. In all cases, the personalized overlays are delivered directly to end-user devices in real-time synchronicity with core content in response to signals alerting XDN servers to each user’s choice of channels and the precise timing of those streams.
Alternatively, FAST providers might deliver prompts in their primary streams enabling viewers to link to XDN-supported video communications among other viewers in tandem with the content flow. These may include watch parties or social platforms for fans of specific shows or celebrities where participants can see each other as they interact. Other interactive experiences could be tied to brands who advertise in the primary stream, allowing people to engage in live shopping interactions with brand representatives.
These are just some possibilities for the personalized enrichment of FAST viewers’ experiences. We’d love to discuss creative options to set your business apart. Please contact us at firstname.lastname@example.org or schedule a call.