VIDEOAGE December 2023 FAST Channels 16 (Continued from Page 14) method of buying and selling ad inventory in real time. It is basically an exchange using software and algorithms wherein publishers and advertisers combine to trade digital media. Publishers make their ad inventories available through ad exchanges, while advertisers purchase them via real-time bidding (RTB). Thus, no humans are involved, and impressions are sold to the highest bidder. Plus, these ad servers are responsible for storing ad content and delivering it to the channels. Ad servers also develop parameters (called “micros”). There are 10 key micros, like limiting the CPM at max $30. Between the ad exchange (ad server) and the publisher (FAST channel) there are two “middlemen”, or even three: The SSP, the DSP, and at times, the reseller. SSPs, or Supply-Side Platforms, are used by publishers to sell ad space to advertisers across different exchanges. Also, ad agencies prefer to buy in bulk from platforms versus single channels. By making their ad inventory available to large exchanges, an SSP helps to maximize the publisher’s ad revenue and their share is 10 percent of the revenues received from DSPs. According to content producer Matt Brummett from Overland Park, Kansasbased Space Mob, “Ad exchanges and SSPs are the same thing these days.” DSPs, or Demand-Side Platforms, on the other hand, are used by advertisers to buy their ad space across many publishers’ websites. DSPs are also called “Seats” and they pay the SSPs, who, in turn, pay the publishers. DSPs allow buying ad impressions from ad exchanges for the cheapest prices. They usually take 10 percent of revenues received from ad agencies. Resellers are entities that buy ad inventory in bulk and resell it to advertisers, often with added value like specific targeting or bundled inventory. If they are involved, a resellers’ cut is 20-30 percent of the revenue from the channel owner. Resellers are not well liked by some players, including OTTera, whose CEO, Stephen Hodge, compares them to people who, without a mandate, seek buyers for TV programs, and when found, go to the content owners to see if they want to make the sales in exchange for a commission. According to the Middlesex, U.K.-based Digital TV Research, global Free Advertising Supported Television revenue is now an $8 billion industry in the U.S. Currently, the U.S. accounts for 56 percent of the total FAST business. Global FAST revenues are expected to increase by $9.4 billion between 2023 and 2029. This compares to $39 billion in global revenue for AVoD channels (the U.S. accounting for 40 percent) in 2023. Another issue is that many IP owners are reluctant to sell their shows to FAST channels even on a 50/50 rev-share basis without a minimum guarantee (MG) because Some of this new Social Media content that manages to move to OTT with broadcastquality results is subsequently licensed worldwide by established international distributors. The New York City-based FilmRise, for example, licensed Preston & Brianna, a popular YouTube show. Similarly, distributors with extensive film libraries, such as the Los Angelesbased Multicom Entertainment Group, license content, in the words of Jesse Baritz, Multicom’s VP of Content Acquisition & Development, “to all different kinds of media, including for their own FAST channels.” Some channels, like Vevo, don’t buy content, but receive music videos directly from labels and artists. Based in New York City, Vevo has a portfolio of 20 FAST channels in the U.S., Canada, the U.K., the E.U., Australia, and New Zealand. According to Rob Christensen, EVP, Global Sales, Vevo, the company “shoots and produces original content consisting of live performances with participating artists.” The historical aspect of FAST is also not too clear. According to OTTera’s Hodge, in 2015, XUMO produced the first FAST channel when XUMO was a joint venture between Viant Technology (part of Meredith Corporation) and Panasonic. Today, XUMO is jointly owned by Charter Communications and Comcast. As for the FAST acronym, many credit it to the American media analyst Alan Wolk, who used it in a December 2018 article. However, Nextologies’ Morsanutto disputed the account, explaining that “FAST has been around for many years. The only difference is that back then, instead of SCTE markers, there were DTMF [automated control] tones.” In our 2020 article, VideoAge reported that FAST was “originally created in Los Angeles in 2014 by Pluto TV, which was acquired by ViacomCBS in 2019. It has also been reported that in 2012, Joe Kovacs, president of the New York City-based Screen Media Ventures, was toying with free streaming services. However, he said, “We were thinking of a linear streaming service for our movie library, but we settled for an ad-supported VoD service that we simply called free VoD.” (By Dom Serafini) there is not a clear model to determine the ad-share going to the IP owner. In most cases, the channel owner gets monthly reports. If the platform partner also sells advertising, its revenue reporting can be by title or by channel. If done by channel, the channel owner also needs a report from the playout partner in terms of a particular program’s hours of viewing (HOV). For example, if in a month a channel’s HOV was 1,000 hours and said program had 100 HOV (10 percent), its share of ad revenue is $50 in a 50/50 share if the channel received $1,000 for that month. FAST channels are based on a long-tail model in which content in low demand can make up market share that rivals blockbusters, but only if the distribution channel is large enough. And this drives the quest for the channels to be on multiple platforms. A good portion of AVoD and FAST content consists of existing film and TV library material, with a smaller portion of that coming from licensing deals on a revshare basis, which only a few established distributors are willing to do, and only with the 10 major players, such as Pluto, Roku, Tubi, Vudu, or Freevee. The new “viral” ecosystem that is now engulfing the international TV industry is also flooding the market with low-cost, low-quality content that is financed on a rev-share basis, with the talents absorbing most of the initial financial burden. Jonathon Barbato, co-founder and co-CEO of Best Ever Channel Gustavo R. Aparicio, managing director of The Latin Beat FAST channels are based on a longtail model in which content in low demand can make up market share that rivals blockbusters, but only if the distribution channel is large enough.
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