A study based on the Ninth Edition of Amagi Global Fast Report
In its ninth edition, the Amagi Global FAST Report explores the international market. It uses data and insights from over 50 FAST services and a sample of 1,500 channel deliveries facilitated by Amagi THUNDERSTORM, the server-side ad insertion (SSAI) platform.
Furthermore, the report unveils audience preferences and viewing habits gleaned from the 2023 Amagi Consumer Survey, which compiled responses from more than 500 US households across a spectrum of lower, middle, and upper-income levels.
Table of Contents
Global Trends and Insights
FAST is making significant strides on the global stage. The Free Ad-supported Streaming TV (FAST) model is rapidly emerging as the preferred streaming choice worldwide. When examining the global penetration rate, it is anticipated that FAST will attract 1.1 billion users by 2027.
Moreover, the global revenue generated by FAST is forecasted to surge to $12 billion by the same year. It is worth noting that the United States is poised to play a pivotal role in this growth, contributing an impressive 90% to the global FAST revenue.
In Q2 2023, the news genre led the global FAST landscape in ad impressions, contributing 40% of the total, followed by nature and movies, with 12% and 11% contributions, respectively.
For hours of viewing (HOV) in the same quarter, news again took the top spot with a 37% share, while movies and nature followed with 16% and 9% shares, respectively.
APAC: The Growing Hub for FAST
The shift from mobile-centric consumption to larger screens in the APAC market has resulted in large-screen devices accounting for 27% of total streaming consumption in Q4.
From Q2 2022 to Q2 2023, the APAC market experienced a staggering 290% growth in ad impressions and an 181% increase in hours of viewing (HOV).
The compound annual growth rate (CAGR) for the APAC FAST channels market is projected to be 16.5% from 2023 to 2030.
In Q2 2023, news was the top genre among APAC viewers, claiming a 47% share of overall ad impressions, followed by movies at 16% and music at 11%.
For hours of viewing (HOV) in the same quarter, news led with a 36% share, followed by movies at 20% and music at 10%.
LATAM and EMEA: Sustaining Momentum
In Q1 2023, LATAM experienced a 150% increase in ad impressions, a 45% rise in FAST channel deliveries, and a 7% growth in hours of viewing (HOV) compared to the same period in 2022.
In Q2 2023, the top genres in LATAM by ad impressions were movies with 36% and lifestyle content with 23%.
In the same quarter, movies also led the pack in hours of viewing with a 52% share, followed by lifestyle content at 17% and music at 7%.
In Q2 2022, the EMEA region experienced a 111% year-over-year (YoY) growth in HOV and a 510% YoY increase in ad impressions compared to Q2 2021.
In Q2 2023, movies were the top genre in EMEA by ad impressions with 21%, followed by music and lifestyle content with 13% and 12%, respectively.
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For hours of viewing in the same quarter, movies led with a 21% share, followed by news at 13% and music at 11%.
US: Home to the FAST Revolution
Between Q2 2022 and Q2 2023, the U.S. FAST landscape experienced a 40% growth in channel deliveries, a 20% increase in ad impressions, and a 12% uptick in hours of viewing.
In Q2 2023, news was the dominant genre in ad impressions with a 44% share, followed by nature at 14% and entertainment at 9%.
For hours of viewing in the same quarter, news led with a 46% share, followed by nature at 12% and movies at 10%.
News is a significant player in the US market, leading in ad impressions and HOV due to the growing demand for local updates. Whether it’s recent local happenings or weather forecasts, Americans are keenly interested in staying informed about their surroundings.
With a daily viewership of around 25 million, local news is a steady choice in the US, serviced by 842 stations. To cater to the rising demand for FAST and local news, 218 stations have launched their FAST channels.
Insights from the Amagi Consumer Survey in the U.S.
- Approximately 70% of survey participants admitted feeling overwhelmed by the volume of available content.
- When looking for new content, 55% of respondents relied on browsing, 23% turned to friends and family for recommendations, 16% used social media, and 6% depended on CTV platform recommendations.
- Half of the survey participants found personalized content recommendations helpful, while 40% did not see their value. Interestingly, 10% of respondents reported not receiving offers but would like to.
- A significant 80% of survey participants preferred to ignore ads by either checking their phones, muting the TV, or briefly stepping out. Only 19% of respondents found the ads relevant and tailored to their interests.
- When asked about their preference for interactive ads, 54% expressed a lack of interest, 24% showed a positive inclination, and 22% were undecided. Despite the mixed feelings, there is a 46% interest in interactive ads.
- While the majority (78%) had not purchased through interactive or shoppable ads, a promising 22% had made purchases, suggesting that developing seamless, non-intrusive, and interactive ads could drive better CPM and increase sales.
FAST 2.0: The Future of Streaming
When FAST first emerged, it captivated audiences with its cable-like structure, offering a linear, relaxed viewing experience free of charge. Complete with a vast array of niche channels spanning almost every imaginable genre, this model quickly positioned FAST as a superior alternative to other streaming models, such as Subscription Video On-Demand (SVOD).
While FAST’s cable TV-inspired approach has undoubtedly contributed to its success, there are options other than resting on these laurels in today’s ever-evolving streaming landscape. The key to meeting the ever-changing demands of viewers and boosting engagement lies in the seamless integration of linear and on-demand content.
This balanced blend of the old and the new will provide the familiarity of traditional TV viewing and the flexibility and convenience that modern streaming offers, ultimately crafting a more personalized, interactive, and engaging viewer experience that guarantees retention.
Challenges in the current FAST Ecosystem
- For content owners, the challenges include limited availability on FAST platforms and difficulty standing out among many channels.
- FAST services need help differentiating their offerings due to similar channel offerings across various platforms and providing a rigid viewing experience compared to SVOD platforms.
- Advertisers are challenged by the lack of innovation in ad units, which leads to viewer drop-offs and reduced ad revenue, as well as disrupted viewing experiences due to the use of slates when targeted commercials are absent.
The Pillars of FAST 2.0
Personalized Content Discoverability
Content discoverability has always been a challenge for streaming services, with viewers initially excited about the plethora of options but eventually facing subscription fatigue. To improve content discoverability, it’s crucial to move beyond the conventional approach of suggesting similar movies or shows based on viewing history.
Methods to Improve Content Discoverability
- Utilize AI to delve deeper into viewers’ preferences by analyzing granular program descriptors that consider factors such as mood and scenario.
- Employ a unified language to describe content in detail, enhancing content discovery and strengthening the connection between similar content.
Enhanced Electronic Programming Guide (EPG)
With its one-size-fits-all approach, the current EPG model often sidelines smaller niche channel providers, resulting in less content diversity.
Recommendations for EPG Personalization:
Geo Personalization: Tailor content based on the viewer’s location, considering regional language and cultural distinctions.
Cohort Personalization: Offer content suggestions based on the viewer’s habits and prior content selections.
Feed-Level Personalization: Customize content based on overarching themes and the pre-existing content within the FAST service.
1:1 Personalization: Provide ultra-focused content suggestions based on individual preferences, viewing history, and skipped recommendations.
Additionally, aligning EPG imagery with viewers’ preferences will streamline content discovery and encourage more extended viewing periods.
Interactivity and Control
Offering basic control options like toggling between VOD and linear content, expressing preferences, and content shuffling can significantly enhance the viewing experience.
Recommendations for Interactivity:
Flexible Navigation Paths: Leverage the vast content collection to create niche FAST channels catering to specific interests, such as sports highlights.
Interactive Live Programming: Provide interactive options like recaps and highlights for viewers joining live programs midway, especially for news and sports categories.
Ad-Sophistication
FAST’s ad load experience is favorable compared to traditional linear TV, but there is still a need for innovation in ad experiences and units.
Amidst trends towards reduced ad loads, content providers and FAST services aim to optimize ad inventory while ensuring a smooth viewing experience. The FAST advertising landscape faces two main challenges:
Innovation in Ad Units: Traditional 15-30 second linear TV ads must be adequate for unlocking new advertising opportunities. More creative ad experiences and units are necessary to maximize revenues with fewer ad loads.
Disruptive Experiences: The FAST model combines programmatic advertising with linear programming. Suppose a specific ad isn’t available due to frequency caps or unfilled inventory. In that case, viewers see a slate, which can disrupt the viewing experience and lead to viewer drop-offs, an undesirable outcome in an ad-based model.
Recommendations for Ad Experiences:
In-content Ad Units: L-bands and graphic overlays, common on mobile and web, offer new ad inventory and enhanced experiences for CTV viewers. Major FAST services like The Roku Channel and Pluto TV are adopting these formats. Amagi provides graphics overlays, L-bands, Picture-in-Picture (PIP), contextual video ads, interactive ads, and Dynamic Brand Insertion (DBI) for seamless ad experiences.
Zero Slate Experience: Slates, while keeping viewers in sync with EPG, are undesirable in the FAST ecosystem. Amagi is developing ad experiences that eliminate the need for slates, aiming for a future where FAST 2.0 is slateless and non-disruptive to viewers.
The Takeaway
Overall, the Industry reports, consumer surveys, and real-time data from Amagi ANALYTICS reveal a prosperous year for FAST globally in 2023. In July 2023, traditional TV viewership in US households dropped below 50%, while streaming, particularly FAST, has steadily grown.
Despite streaming TV viewership in the US being approximately 75%, advertising dollars in Connected TV only account for about 40% of the ad spend compared to traditional TV. In the coming years, there will be a significant shift in ad spending from traditional TV to streaming, with FAST as the primary beneficiary.
However, simply mirroring the cable TV model won’t maximize FAST’s growth potential. Attracting new generations with engaging ad and content experiences, introducing streaming-like options, and balancing content discoverability with diverse content choices is crucial.
The future of FAST is envisioned to feature premium live sports, high-quality original content, and personalized viewer experiences. All content providers and FAST services, regardless of size, will access their desired audience, with CTV’s addressability and interactivity fully realized for advertisers.
Ragul Thangavel
With over nine years of diverse professional experience, Ragul has made significant contributions across various domains, including Media Operations, OTT Technologies, Video Production, Ecommerce, and Social Media.
Holding an Engineering degree, Ragul's career took an unconventional turn when he discovered his passion for writing, leading him to begin his journey as a content writer.
His career has been exclusively dedicated to the growth and development of startups, where he has played a pivotal role. His unique blend of technical knowledge and creative prowess has enabled him to drive innovation and success in every venture he has been a part of.