VIDEOAGE December 2023 FAST Channels 14 (Continued from Cover) (Continued on Page 16) channels: content providers, platforms, programmatic advertising, playout providers, channel providers, and brand owners (a.k.a. publishers). Let’s start with content. Jonathon Barbato, co-founder and co-CEO of the Los Angelesbased Best Ever Channel (BEC), a channel provider, explained that these days content IP owners that want to enter the FAST universe have to start with a library of 300 hours minimum and update at a rate of at least 20 percent per month. But that is not all. “Three years ago”, said Barbato, “almost anyone with content could get launched. Now the platforms feel like they have enough channels, so getting launched is difficult, especially for those that don’t have channel ‘real estate.’ Platforms are now demanding an original, proprietary, and ongoing pipeline of content to differentiate a channel, and even to consider launching it”, he explained. However, the troubles surrounding getting “carriage” (also called distribution) for a FAST channel are not all that different from the difficulties encountered by cable TV channels or syndicated programs. To Christian Morsanutto of the Toronto, Canada-based Nextologies, a playout provider, “If distribution was king, now it’s emperor, and platforms are becoming more selective about the quality of the content.” To alleviate the problem, distribution companies were developed, like the New York City-based TeleUp, a company formed by Gustavo Neiva de Medeiros to syndicate FAST channels to various platforms. Currently, there are an estimated 1,500 FAST channels worldwide (75 percent of which are based in the U.S.) and 22 major platforms, including the connected TV manufacturers. Among the major ad-supported FAST platforms BEC’s Barbato listed are Roku, Samsung, Vizio, LG, Freevee/ Amazon, Pluto, Tubi, XUMO, and Fubo. Nextologies’ Morsanutto added, “FAST is still a predominantly North American event, but it’s now spreading around the world. Keep in mind that current linear channels are adding SCTE markers [cable and TV standards that are embedded within the video content, enabling coordination of advertising insertion] to become FAST channels.” To Barbato, viewers’ current limit of FAST channels can reach a maximum of 200, however, he believes that “AI will make room for 1,000 channels because it will effectively only serve what an individual viewer wants.” Platforms operate as aggregators and offer an ecosystem similar to cable TV operators. The revenue split between the platform and the channel is usually 50/50 on the net the channel receives from advertising, but some platforms ask for 60/40 in their favor, and others 45/55 in the channel’s favor. The platforms can also sell the advertising if the channel doesn’t sell its own. (also called a video service provider, like Nextologies). The IP owner comes up with the content. The playout provider is the tech company that actually creates the channel in the form of an interface using the “assets” (programming) to upload. The channel provider takes the interface and the assets from the playout provider and creates the lineups (which program the channel, also called the grid), plus it stores all the “assets.” These assets are then sent to the playout provider who delivers them to the list of platforms that the channel provider gives them. As for the new uploads (new shows), the channel brand owner sends them to the playout provider, who stores the assets, which are uploaded by the channel provider as needed. Another issue that channel brands are facing is the programmatic advertising process. “The lack of transparency is a challenge, especially for publishers without direct ad server relationships”, said Gustavo Neiva de Medeiros, CEO of TeleUp, and president of the FAST Alliance (pictured on the front cover). He continued: “The key issue is distinguishing the average revenue received by publishers (channels) from what platforms or intermediaries receive. While a channel might average $7, the platform or intermediaries could earn $20. Addressing this disparity is a key area where the alliance aims to assist publishers.” The whole FAST business is based on a revenue-share (rev-share) model wherein technical costs are charged by some playout providers (like Nextologies), while others (like Amagi and OTTera) have a hybrid model: part technical cost, part rev-share. The business model for playout providers is to charge channel providers per channel for storage, programming, seats, and platform delivery. So, if a channel provider delivers seven channels to seven platforms and are charged, for example, $1 per channel per platform the channel provider would be charged $49 per month. The FAST Alliance has been operational since July 2023. “We represent FAST Channel publishers. However, we are considering the creation of vendor memberships with reduced voting power”, said Neiva de Medeiros. Its membership count is steadily increasing, with several applications pending board review. “We expect to have approximately 50 members by the end of this year”, added Neiva de Medeiros. Barbato’s BEC is a member of the FAST Alliance, as is Aparicio’s The Latin Beat. FAST Alliance has a programmatic ad service, which is only available to members. “We have the best prices and the highest CPMs [cost per thousand viewers] and don’t carry a monthly fixed cost or ad manager fee besides the yearly membership dues for members who utilize the service”, explained Neiva de Medeiros. Programmatic ad service is an automated Platforms are also gatekeepers when it comes to the selection of channels carried and for the way they’re delivered to them. According to Gustavo R. Aparicio, managing director of the Miami, Florida-based The Latin Beat, a FAST channels operator, instead of developing a unified technical standard, major platforms have allowed only four playout providers to deliver the playout stream: Amagi, WURL, Frequency, and OTTera. Some publishers (FAST channel owners) also complain that there are cases when platforms create their own linear channels based on the successful results of other channels they carry. In order to understand the role of a playout provider, it is important to describe the ecosystem of a FAST channel. The creation of a FAST channel is a multitask operation that involves the originator in the form of an IP owner (also called a publisher or a brand owner) who contracts a channel provider (like Barbato’s BEC), who in turn calls upon a playout provider Stephen Hodge, OTTera’s CEO “Platforms are now demanding an original, proprietary, and ongoing pipeline of content to differentiate a channel, and even to consider launching it.” Jonathon Barbato, BEC
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