Pluto TV Platform EPG

Consumer Preferences & Consumption Patterns Chart a Course to a New TV Frontier

The paid television industry is at an inflection point, mirroring the music industry around the birth of the Dot Com Era. In a previous article, we explored some of the factors that brought the industry to this point. We focused on the shift in the consumer buying decision process as well as the consolidation of content ownership. But as we look to the future, can we follow consumer preferences and consumption patterns to a path forward for innovative brands?

The road ahead for traditional paid television networks may be paved by free ad-supported television platforms, otherwise known as FAST. Platforms like The Roku Channel, Pluto TV, Xumo TV, and more provide free access to hundreds of channels worth of content, ranging from syndicated sitcoms to live sports. In essence, these platforms have taken the concept of traditional over-the-air broadcasting (think of the old fashioned bunny ear antennas) to the Internet. Whereas in the past broadcasters were limited by the frequencies available, the Internet provides a virtually limitless platform. For mid-sized and smaller paid television programmers, these new platforms represent a distribution boon.

Tapping into Consumer Trends

The benefits of FAST go beyond the accessibility of the platforms. These platforms have gained momentum because their developers have wizened to prevailing consumer trends, and programmers would do well to follow suit. Ultimately, marketers must always follow consumer trends to find success, creating products and delivering content that consumers want. Using preference data, we can see that, in response to the monetization of online streaming, consumers have displayed a willingness to put up with advertising in order to access content for free.

Hulu, which offers both ad-supported and ad-free subscription plans, has reported that the overwhelming majority of subscribers are willing to accept ads in their content in exchange for a lower monthly fee, to the tune of 70% of users on ad-supported plans. Furthermore, this has allowed Hulu to make money hand over fist by generating a reported $1.5B in ad revenue in 2018. In addition to Hulu, Roku has relied on its FAST platform, The Roku Channel, to help reach its target of breaking $1B in revenue in 2019.

The ROKU Channel Platform EPG

Speaking to Digiday, Roku senior vice president Scott Rosenburg explained how their decision to focus on The Roku Channel came down to following consumer preferences and trends, “The reason we went hard into pure free, ad-supported content was because we were listening to our users, and one of the most important terms that people searched for on our platform was the availability of free content.” Larger corporate acquisitions, like Viacom’s early 2019 cash purchase of Pluto TV, also demonstrates industry belief in the viability of this new breed of platform.

Capitalizing on the FAST Wave

For programmers moving forward, the keys to capitalizing early on this new wave of Internet television consumption will come in the forms of consumer education and targeting. Marketers will need to segment and target their digitally literate audiences in order to deliver a message based on education and awareness. While early adopters have already engaged, there are still massive segments of the market that have not learned about FAST platforms, let alone become accustomed to using them for their television consumption. This presents an opportunity for first-movers to align themselves with the cutting edge of consumer trends and preferences in order to deliver the content people want, while also growing their brand as more accessible and compelling than competing networks. In a dynamic and tumultuous industry, this may be the way forward.

What caused the Paid Television Industry’s Current Instability?

What the Buying Decision Process can tell us about all those streaming platforms.

6 Replies to “Is FAST the Future of Television?

  1. Alexandra Reyes

    I have to say, not being very familiar with FAST, I had failed to consider its potential as an evolving marketing channel. This article was very enlightening and has certainly made me consider how FAST could be used in the sports marketing industry, for example. I do have to wonder whether FAST enables advertisers to be region-specific for industries where the organization that is being advertised is in a specific location only. You’ve definitely given me a lot to think about.

    • guillermopage

      Thanks for the comment, Alex! You’re on the right track with regards to advertising, but with regards to the sports industry, FAST presents a new world of possibilities. Beyond advertising, FAST presents teams with new broadcasting opportunities. I would argue the best advertisements for your team are broadcasts of their games, and the more fans can watch, the better.

    • Melina Miller

      Alexandra, like you, I am very unfamiliar with FAST. In fact, I hadn’t heard about it prior to reading Guillermo’s article. As a result, I hadn’t considered its potential as a marketing channel but now that I am aware of its presence, I think it is a great option for the sports marketing industry or any industry for that matter. As Millennials, we spend a good portion of our free time streaming rather than watching television, and we LOVE free stuff so utilizing FAST marketing efforts when targeting this audience is a great option!

  2. Melina Miller

    Great article Guillermo, it was very informative. As someone who has never heard of FAST before, I found your article to be very insightful. Personally, I ditched my cable services last year and opted for Netflix and Hulu ad-free subscriptions. When I subscribed to Hulu ad-free, I hadn’t considered that I would be missing out on valuable advertisements that I no longer see daily, like new movies that are out in theaters. As a consumer, I would be willing to put up with advertising (as I had before with live television) for access to streaming privileges for a lower price knowing that the advertisements I would be viewing were tailored to my preference through the process of preference data that these companies have access to. This is an interesting concept, and I will consider FAST marketing in my future marketing endeavors.

    • Alexandra Reyes

      I wonder how much viewers are able to customize their advertising preferences with FAST. In a way it would be advantageous for advertisers since they would be reaching audiences that are predisposed to be receptive their message, but on the other hand it might limit their reach to new audiences. There would have to be a balance struck there if FAST services do allow some level of consumer ad preference customization. That being said, I do agree that this is an advertising medium that has a lot of room for exploration at this stage and should be on the radar of marketing professionals.

  3. Marjan Chaiatri

    Guillermo, This is a great article, very informative and insightful. I believe you touched on just the right points in this article. In today’s FAST-growing world, the future is what marketers need to focus on. Great work!

Leave a Reply