Streaming in the FAST lane: What's in it for brands?

The concept of binge-watching has certainly evolved, and not just because we’re now told bingeing anything is bad. While platforms like Netflix based their value proposition on nonstop content sans ads, that streaming model has since changed.

While platforms are exploring FAST (Free Advertising Supported Streaming TV), another new strategy being put in place by content giants like Disney is Always-On channels, with their different IPs, from Star Wars to the MCU, as more and more studio and entertainment companies go down the streaming route.

India's growth in the CTV market has seen users grow from 34 million to 45 million, and the CTV ad spend in the country is expected to grow at a CAGR of 47% until 2027, as per a Kantar report.

FAST and the curious

“While we have invented a whole bunch of acronyms to help define and understand the TV landscape, at the end of the day TV is just TV to the consumer. This obsession with defining TV may be holding everyone back - including advertisers,” notes Prabhvir Sahmey, Senior Director - Ad Sales - India, for Samsung Ads.

“The first thing to note is that FAST is complementary and supplementary to your total TV buy. FAST provides advertisers with premium curated content in a brand-safe environment. Peter Field, the godfather of effectiveness, showed there is a strong correlation between TV and driving outcomes. This is due to the emotional clout and high attention the big screen can drive, along with the hugely overlooked element of trust,” he says.

Rohit Ahuja, General Manager - Strategy, Initiative India, says the transition of streaming services towards ad-supported models represents a strategic move towards broadening audience reach and revenue diversification.

“This shift is driven by a combination of factors, including consumer fatigue with subscription-based models, escalating content acquisition costs, and the need for streaming platforms to remain competitive in a rapidly evolving market. Streaming giants are keenly aware of the necessity to adapt to changing consumer preferences and market dynamics. By integrating advertisements into their platforms, these companies not only expand their audience base but also unlock new avenues for monetization,” notes Ahuja.

This evolution is underpinned by the convergence of traditional television and digital media, blurring the boundaries between linear and on-demand content consumption. Ad-supported streaming presents advertisers with enhanced opportunities to engage with audiences in a more targeted and meaningful manner, bridging the gap between content delivery and advertising.

According to Ahuja, going forward, the success of ad-supported streaming will hinge on the delicate balance between user experience and advertising revenue. “As streaming companies navigate this landscape, they must prioritize maintaining a seamless viewing experience while maximizing the potential for advertising revenue.”

Unpacking Always-on, FAST

Always-on channels cater to consumers who struggle with content discovery by offering a curated stream of content focused on specific themes or genres. On the other hand, FAST platforms prioritize accessibility and immediacy, delivering ad-supported live content to audiences immersed in digital content consumption. These formats present distinct benefits for advertisers.

“Always-on channels provide opportunities for contextual targeting and seamless integration within a dedicated content environment, enhancing the relevance and impact of advertising placements. Similarly, FAST platforms offer advertisers the chance to engage with audiences in real-time, capitalizing on the growing trend of on-demand streaming while leveraging the power of ad-supported models,” says Ahuja.  

However, it's important to recognize that there's no one-size-fits-all strategy for advertisers. The success of campaigns on these platforms depends on specific objectives and target audience preferences. Therefore, brands must embrace a data-driven approach, conducting A/B testing to evaluate campaign performance and refine their strategies accordingly.

Sahmey notes that as audiences fragment across more and more platforms, TV models are almost doing the opposite. “They are merging. Previously ad-free services are now incorporating ad tiers, advertising video on demand platforms are offering paid subscription and traditional broadcasters are looking at FAST as a distribution platform to reach streaming audiences.” 

Back to the Future?

Sahmey believes the hybridisation of streaming will only continue as streaming platforms offer a plethora of ways to watch to draw the widest audience and cater for all wallet sizes.  “AI is going to open a whole new level of content recommendations, personalised viewing and advertising experiences.  AI will have a profound impact on the future of TV and how advertisers, distributors and platforms reach audiences.”

Siddhartha Dasgupta, Vice President – Business Operations and Digital Media Branding, Sokrati, says the primary reason streamers went the ad route is purely from a revenue standpoint.

“The subscription model hasn't worked in certain emerging markets like India, especially in entertainment because of the low entry point for Satellite TV and age-old prevalence of FTA TV. However, as these countries grow and the purchasing power increases, subscription packages of streamers will gain traction, especially in urban India. I think content also has a direct correlation with the subscriber base in markets such as India and therefore, platforms that offer more regional language content and local content seem to flourish,” says Dasgupta.

Experts say that explains why Amazon and Disney+Hotstar have a greater subscriber base than Netflix in India. Jio's strategy is a reach-first strategy and the goal is to gain as many users as possible and therefore they have opened up to advertising in a big way because they offer their content for free along with live sports. 

From a marketers' standpoint it is really about the audiences they are going after that determines the choice of platform, not all platforms have all types of audiences and digital-first marketers always want to be specific with their targeting. Hence, it is good for them that the choice exists in the market.

Noting that streaming companies are evolving by incorporating ads to diversify revenue streams and adapt to changing consumer preferences, Sushmita Sinha, Associate Director - Key Accounts, TheSmallBigIdea, says this trend stems from the need for sustainability and competitiveness, offering both ad-free and ad-supported options. “Looking ahead, a balance between revenue generation and user experience will likely drive the continued coexistence of these models.”

“In terms of future trends in the context of advertising, I believe it is inevitable for some of the major OTT players to go the self-serve route. It is crucial to give advertisers the control of running their own ads and choosing their targeting, optimising campaigns, etc. This is also of utmost importance to attract the ad spends of digital-first brands who are still very heavily invested in Google and Meta,” says Dasgupta.