So it’s no wonder that publishers are turning to FAST as a solution to the need to keep revenues growing. But is FAST a long-term solution? It’s certainly the shiny new thing, but is it the best strategic play?

With FAST channels earning over $12bn globally by 2027, doubling today’s levels (Omdia data), it’s clear that there is gold in those mountains. As with AVOD, FAST channels inventory can be sold directly or programmatically.  But unlike AVOD, with FAST the media owner doesn’t bear the technology, stream delivery and marketing costs. On paper it is all upside if you own content that audiences crave.

But because FAST is offsite, it can struggle to reach the CPMs of more addressable forms of advertising – where first-party data is involved, for example.

The second challenge FAST faces is that of demographic. While audiences are growing in size, they tend to consist of older age groups. That’s fine in itself, but it does provide a limitation for brands looking to reach other demos, or extend reach beyond that older group.

Viewing behaviour also poses a challenge. Linear FAST channels are ideal for long streaming sessions – the TV equivalent of background music. This means they’re not likely to fare well on attention, and will quickly meet frequency caps.

Another question to ask is how the FAST channels will work alongside existing channels, and if there is a danger of audience cannibalisation.

Then come the technological limitations. Whilst third-party FAST vendors’ tech is admirable in how easy it makes the process, it means an extra partner and all the complications that come with that. For data-driven businesses it causes a lot of headaches. Often these third-parties are black boxes, with little in the way of actionable analytics.

With these considerations in place, let us revisit the first question – does FAST offer a revenue solution?

Naturally, the FAST format is designed to provide an easy access point for viewers. And simplicity is at the heart of the FAST proposition. Spinning up FAST channels is theoretically easy; most often they consist of just one IP, and of content that is already ready-to-go, likely sitting dormant. So, it’s a no-brainer way to make money from content that’s gathering dust.

Yet content owners might be just as well served spending their time and energy looking more closely at their existing channel and advertising set up. There are always efficiencies to be made on O&O channels which could make a significant impact on the bottom line.

Ad errors alone account for a huge hole in revenue. These can mostly be avoided, if you know what caused them. Dedicating resource to spotting, and fixing ad errors quickly, could be just as rewarding as standing up a new channel.

There’s also the ongoing job of cleaning the programmatic pipes, and supply/demand path optimisation to undertake. This can’t be done without clear sight of how the whole chain is performing – which again comes down to data. These close-to-home existing issues are easy to overlook, and tricky to dig down into. But they’re crucial when every penny counts.

Perhaps it’s worth considering whether to focus on the massive savings that could be made in the existing set-up rather than investing resources in a whole new set-up.

Where FAST channels are a part of a broader strategy, make sure that the emphasis is not just on establishing the channels. Once they’re live, they must be hawkishly watched, data must be scrutinised, opportunities to tweak ad campaigns, content delivery and QoE must be found.

FAST channels alone are not the answer to revenue woes. But an overall scrutiny of all streaming data, on Owned and Offsite properties, is.

To help us navigate this rapid expansion, let’s look at this through the lens of what it was like being a teenager.

Most of us will remember the highs and lows of growing up: the sudden (and sometimes severe) physical changes to our bodies; the onset of more advanced, often overwhelming, emotions; new social arenas and constructs leaving us with identity crises, and existential challenges. All of which one must endure and complete before reaching the promised land of adulthood.

It’s a tough age indeed.

These same challenges, in their own way, are on show in the streaming industry as it endures its own adolescence.

The growth spurt

Kicked off primarily by the Covid pandemic, streaming video’s growth spurt has tripped up many players in the industry, with a substantial and unexpected rate and size of change.

CTV is forecast to take over one-third ($38 Billion) of ad spend by 2026. This is double the growth from 2022.

With a Compounded Annual Growth Rate of nearly 20%, this is gold rush stuff. Very few in the industry would have predicted this prior to the pandemic.

But, much like a teenager’s gangly limbs, it’s far from a uniform expansion. Growth is coming not from new households spread out evenly across the country, but from adoption of new devices – and younger demographics. This introduces significant technological and operational complexities.

So, it’s not just a matter of needing to be ‘in it to win it’. Publishers and advertisers alike need to join the dots, and discover ways to connect their audiences and their goals.

They need to work smarter.

Relevancy, context, and attention are all new words entering the trading lexicon. Growth will require adoption of automation in all manner of workflows, moving humans from the operating seat to the supervisor’s chair.

One way this could manifest is programmatic trading. Contrary to what you might have heard, data from our platform tells us that programmatic deals still make up only a fraction of CTV ad sales. Much like pre-teen children, there is promise in programmatic, but it’s yet to live up to its potential.

The in-crowd

Audiences for streaming channels are fickle. They are easily influenced by online icons, and more loyal to the content they like than the provider of that content. As increased subscriber churn has shown, lose viewers and it’s unlikely that they will come back anytime soon.

Talk about trying to be part of the ‘in-crowd’ at school.

Publishers are not only competing with their usual contemporaries and suffering costs that are ‘shooting through the roof’, but also a new wave of streaming natives that produce content from ‘inside their platforms, out.’ They are attracting larger and larger audiences that, while watching their content, are not watching yours.

Everyone wants to be their friend. Everyone wants to be invited to their party.

One advantage the big streamers have had to date has been extraordinary production values. But with a squeeze coming for commissioning budgets, it looks like even that is under threat.

Helicopter parents

And just as things couldn’t become more challenging, many publishers and advertisers have to answer to their helicopter parents – their shareholders.

Playing out in a dystopian ‘Mother-and-Father know best’ style, shareholder activism (like that underway with Disney) further destabilise businesses. It casts doubt, distracts and introduces second guessing across their business while they try to grapple with new regulatory, technological and operational paradigms.

For the next 2-3 years the industry will continue to grow before reaching adulthood. During this time it will likely be a bumpy and tumultuous road. We’ll trip over our own feet a few more times, and experience growing pains as we adapt to new formats, behaviour and technology.

Publishers and advertisers will both need to continuously evolve all aspects of their business to fully capitalise on the potential wins, and become fully functioning adults.

Cameron Church is CEO and Co-Founder of Watching That. Here he is on LinkedIn.