FAST and Stupid – The Future of TV is Ad-funded Streaming Right?
FAST or Free Ad-funded Streaming Television has has a high growth over the last few years.
FAST (Free Ad-Supported TV) channels are linear channels that stream free content with ads, similar to traditional TV. However, unlike YouTube, which is the dominant platform for video-on-demand content, FAST channels face significant challenges in monetizing their content due to the complex and opaque programmatic ad trading ecosystem.
FAST Channels Struggle to Monetize Due to Programmatic Ad Trading Inefficiencies
Programmatic ad trading is the automated process of buying and selling digital ad spaces in real-time using data and technology. The two main players involved in the trade are publishers, who sell the ad spaces, and advertisers, who buy the ad spaces to serve their ads.
However, the programmatic ad trading process is not as simple as it sounds. There are multiple intermediaries and platforms involved, such as demand-side platforms (DSPs), supply-side platforms (SSPs), ad exchanges, and data management platforms (DMPs), each taking a cut of the ad revenue[^2^]. Moreover, there are various syntax errors and discrepancies that occur during the ad trading, resulting in lost impressions and revenue[^3^].
According to a recent report by the Association of National Advertisers (ANA), only 51% of the advertiser’s dollar reaches the publisher, while the rest is eaten up by the programmatic ad trading “tech tax”[^4^]. This means that FAST channels receive only a fraction of what the advertiser paid at the front of the queue, making it hard for them to sustain and grow their businesses.
In contrast, YouTube offers a more transparent and direct monetization model for its content creators, who can earn money from ads, subscriptions, merchandise, sponsorships, and more[^5^]. According to Forbes, the top 10 highest-paid YouTube stars of 2020 collectively earned $211 million, with Ryan Kaji, a nine-year-old who reviews toys, topping the list with $29.5 million[^6^].
Therefore, FAST channels need to find ways to overcome the programmatic ad trading inefficiencies and increase their share of the ad revenue. Some possible solutions include using header bidding, which allows publishers to simultaneously offer their inventory to multiple ad exchanges and increase competition and prices[^7^], or creating their own direct deals with advertisers and agencies, bypassing the intermediaries and platforms[^8^].
“FAST channels have a huge potential to reach and engage millions of viewers who are looking for free and diverse content. However, they are currently under-monetized due to the programmatic ad trading inefficiencies and lack of transparency. FAST channels need to adopt new strategies and technologies to optimize their ad revenue to far exceed with YouTube and other platforms.” said Jamie Branson, CEO of Kapang, a leading platform for FAST channels.
Kapang is a cloud-based platform that offers a seamless user experience across devices and platforms, allowing users to access a variety of content genres, from live TV and sports to movies and shows, with flexible subscription and payment options. Kapang also allows users to purchase virtual tickets for exclusive live events and shows, such as concerts, festivals, and premieres.
Kapang is designed to empower content owners and FAST Channel businesses, especially independent filmmakers and studios, to migrate to a cord cutting universe. Kapang enables content creators to distribute and monetize their content with ease and efficiency, while retaining full control and ownership of their intellectual property.
“Kapang is committed to helping FAST channels succeed in the streaming industry. We have the technology and the know-how to transform FAST channels into high-performance and high-revenue channels. We are confident that our services will benefit both FAST channels and broadcasters, as well as the streaming audience.” said Jamie, CEO of Kapang.
Kapang’s services are now available for FAST channels and broadcasters who want to improve their performance and profitability using a unified FAST Channel solution. To learn more about Kapang and sign up for the services, visit www.viewtvx.com/kapang-tv/.