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Ad-supported broadcasters capture increasing shares of TV viewers

Ad-supported broadcasters capture increasing shares of TV viewers

At a time when many consumers’ wallets are strained, TV viewers are flocking to a range of streaming services that cost next to nothing.

The channels are known as free, ad-supported television (FAST) networks. Major players include Amazon’s Freevee, Paramount’s Pluto TV, Rakuten TV, The Roku Channel, Fox’s Tubi, and Xumo, which is co-owned by NBC News parent company Comcast.


The channels are not household names, but today they account for 4.1% of the entire TV viewing market. According to NielsenThat’s more than Hulu or Amazon Prime Video.

Goldman Sachs predicts that, given current trends, the combined value of the FAST universe will increase by 15% annually through 2027.

Doug Arthur, managing director of Wall Street consultancy Huber Research, said the growth is because consumers are tired of having to pay increasingly higher prices across multiple platforms to get the content they want.

“There’s going to be a crunch in terms of what the consumer can handle,” he told NBC News. “There’s a market for a free ad-supported service,” he said in a world where consumers are increasingly squeezed by the high cost of traditional cable and satellite and now paid streaming services.

Arthur said consumers are now choosing to pay less or nothing for their content, even if it means giving up premium programming.

This trade-off is reflected in the types of content FAST channels currently offer, which are primarily older movies and TV shows, with some original content and access to some live TV channels.

Popular trending movies on the platforms include entries from the Fast & Furious series (Tubi and Freevee), the first two Terminator movies (Pluto TV) and the Resident Evil series (Rakuten). The platforms also offer TV shows from a variety of eras — everything from “Gunsmoke” and “The Andy Griffith Show” (Pluto TV) to “The Rockford Files” and “Home Improvement” (Roku).

Goldman Sachs said FAST channels specifically appeal to “wireless” Gen Y and Z members, i.e. viewers who didn’t originally have a cable subscription (as opposed to “wireless viewers” ​​who have canceled their subscriptions).

However, Ross Compton, a media analyst at Macquarie US Equity Research, which also operates on Wall Street, said that it is difficult to obtain accurate data on who the channels’ audience consists of exactly and that it is possible that older generation TV viewers are also turning to FAST programs.

He said the one thing viewers have in common, regardless of their background, is that they want to pay nothing for entertainment.

“This harks back to the early days of television,” he said.

“It’s a repackaged version of the old distribution method,” Compton said, noting that the original broadcast networks were all supported by advertising and the only investment the viewer had to make was a television set and antenna. “Now, it’s the same thing, just over the internet.”

Of all FAST channels, Tubi emerges as the largest and fastest-growing channel, with 1.8% of all TV viewers — on par with Disney+ and more than Max, Paramount+ and NBC-owned Peacock. According to Nielsen.

Compton said Tubi is an exception among FAST platforms because it is more geared toward on-demand offerings, allowing viewers to order movies and shows from a large library of content. Other FAST offerings also offer on-demand offerings but also offer more “lean-back” programming in the form of pre-programmed TV channels.

In other words, you just sit back in your chair and wait for the shows to wash over you. Compton said that’s also appealing to viewers who are on their phones and want to listen to something else in the background.

Despite their reliance on retroactive programs, FAST channels are not yet a significant source of cost savings for their parent companies.

While many channels may rely on content already available through their parent companies, not all content is in-house. For example, Tubi and Warner Bros. Discovery signed a high-profile deal Last year, Tubi was allowed to show WBD content such as “Westworld.” Terms of the deal were not disclosed.

Additionally, FAST’s parent companies are still investing heavily in marketing the channels to new users.

Indeed, despite their strong growth, some have raised questions about the long-term direction and even viability of FAST platforms. TV industry research website TVRev.com says FAST just a bubble While the overall market continues to contract and slow down.

FAST, TVRev’s Brandon Katz wrote last fall:“It’s become quite the trending topic of conversation in Hollywood in recent years. Despite its growth, no one seems to be quite sure what FAST means long term.”

But Compton said it’s clear that demand for FAST channels is sustainable, and there’s a simple reason for that.

“You really can’t beat free,” he said.

Rob Wile is a breaking business reporter for NBC News Digital.