Catching on FAST: Why Europe Is Embracing Free Advertising-Supported Streaming TV
Is Europe going FAST, but the U.S. going FASTer? FAST, or free advertising-supported streaming television, and AVOD (advertising-based video on demand) services have been a key growth segment in the U.S. at a time when streaming has become a competitive amid a maturing market. Cases in point: Fox Corp.’s Tubi, Paramount Global’s Pluto TV, Amazon’s Freevee, or The Roku Channel.
Meanwhile, in Europe, where traditionally more free TV content has been available, FAST hasn’t made as much noise until recently. And MIPCOM in Cannes could in the coming days feature more talk and news about it. This summer, Tubi launched in the U.K., while Pluto TV struck a strategic commercial and editorial partnership with M6+, French TV company Groupe M6’s new AVOD platform, to “scale and expand their free streaming and digital businesses in France.” Sony Pictures recently launched a 54-channel FAST package in Europe that includes such popular content as Seinfeld.
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Also, Fremantle agreed to launch 25 FAST channels in an expanded worldwide deal with Pluto TV for 13 countries, including in such markets as the U.K., Germany, Spain, Italy, and the Nordics, with each channel being specifically curated for individual markets. The channels include Escape to the Country, Three’s Company, Baywatch, Supermarket Sweep, Family Feud Classic, Let’s Make a Deal, The Price is Right: Bob Barker, The Price is Right: Drew Carey, Alarm for Cobra, Project Runway, Prisoner and Jamie Oliver.
And BBC commercial arm BBC Studios teamed with Pluto to launch three Top Gear-related FAST channels in the Nordics. Meanwhile, U.K. public service broadcasters BBC, ITV, Channel 4 and Channel 5 have teamed up to leverage their content libraries via the launch of new free service Freely. Plus, Swedish startup and FAST company Staccs this summer unveiled an expanded partnership with Samsung to roll out two new music video channels, Staccs TV Throwback and Staccs TV Celebrate, in the U.K. Spain and Italy.
Maureen Kerr, who runs management consulting Arthur D. Little’s media & entertainment practice in the U.K., says that the growth of FAST services in the Europe, Middle East, and Africa regions is currently outpacing the U.S. “The increasing pressure toward profitability and the increasing rate of churn have also led many players to experiment with new business models,” she explained in a recent report. “A growing trend is monetization via advertising through FAST channels and AVOD.”
The main difference is that AVOD, as the name says, provides advertising-supported video-on-demand content, while FAST offers linear channels and on-demand content.
“Looking at it from the consumer perspective, we’re all looking for more flexible, more cost-effective viewing options, particularly among the younger demographic,” Kerr explains to THR. “And the rise of connected TVs has definitely been a major factor and will continue to be a significant factor for FAST adoption, particularly in Europe. We’re starting to see connected TV penetration really rising.” Such TV set manufacturers as Panasonic and Samsung have started offering FAST channels, positioning themselves as aggregators of sort of free TV content.
Discoverability and localization are other driving factors for content companies. “Broadcasters, from France to the U.K. and Germany, have all launched their own streaming services. But they’re now saying to themselves, ‘well, how am I going to distinguish myself and differentiate myself, and how am I going to prevent cannibalization’?” Kerr highlights. “And when you talk to the folks over at ITV, TF1 and other big broadcasters, they believe that the advertising-funded model is complementary.”
In a sense, they may consider FAST and AVOD as another distribution window for their content with a different, namely ad-focused, monetization.
“The combination of a robust advertising market and consumer preference for free content has been key to the rise of free streaming in Europe,” Olivier Jollet, executive vp and international general manager at Pluto TV tells THR. “Local content is also playing a key role in our growth in Europe. Local partnerships with Viaplay, ZDF Studios, BBC Studios, Mediaset, Mediawan, Newen and France Television helped us to build the best offering possible for local audiences.”
While growth will also be seen in France, Spain, Italy and other countries, Kerr calls the U.K. and Germany “the barometers and certainly the higher adopters of FAST” in Europe. However, data is often difficult to get and compare in the fragmented European markets.
Kerr says she typically looks at various consumer surveys to gauge user uptake trends. “It’s only to be expected that the increase and acceleration from a low base in Europe is going to be greater than in the U.S.,” she notes.
Looking at it that way, Europe has much catching up to do, experts say. “Viewing of FAST in the U.S. is at about 37 percent of online homes,” data and research firm Ampere Analysis’s executive director Guy Bisson tells THR. “In Europe, you’re looking at between five and 14 percent, depending on the country, so significantly behind the U.S.”
But that has its roots in the strength of public and commercial broadcasters. “The reason that the viewing of what we define as FAST platforms is considerably lower in Europe is that the broadcaster streaming space is that much more developed and has been the go-to space for free TV for many, many years,” explains Bisson. “The BBC iPlayer does not carry advertising, but when it launched, it set the agenda for free streaming in the U.K. The other broadcasters and commercial broadcasters followed suit. So, in Europe, there is quite a strong negative correlation between the viewing of broadcast VOD, BVOD, platforms and the viewing of FAST platforms.”
The Ampere expert highlights though that if you consider them as playing in the same free streaming space, the picture looks different. “That’s why I think this distinction is almost a false definition,” he tells THR. “I mean, if I watch ITVX for free, yes, it is ad-supported, and it’s streamed and it’s television. So is that a FAST channel? We don’t call it a FAST channel, but it is free streaming television.” Bisson also argues that consumers typically don’t make a distinction between watching a linear-like themed channel on a FAST service or its on-demand offerings.
His conclusion is that the different names and definitions will eventually go away and make way for a focus on free streaming, period. “If we include BVOD, Europe is already up at or above where the U.S. is for free streaming,” Bisson highlights in explaining what that would mean.
Still, there is room for FAST and AVOD in Europe. “The fact that Tubi has only just launched in the U.K. shows you that clearly Europe has not been a huge priority,” Bisson notes. “But the opportunity is there, even if competition is going to be tougher because of the broadcasters.”
Tubi may in the future add FAST channels to its core AVOD service in the U.K. “We might consider adding FAST channels to the U.K. service over time, but at launch, we are leaning into our strengths: a massive on-demand library that is personalized for every single user, available for free,” David Salmon, executive vp & managing director of international at Tubi, tells THR. “AVOD and FAST are growing as a streaming category across global markets for a number of reasons. One is a general sense of frustration from SVOD service subscribers with streamflation. A number of services are simultaneously raising prices, reducing their library sizes, and introducing advertising tiers. A large number of consumers see this as an issue.”
Arthur D. Little projects FAST revenue to keep growing to account for nearly 20 percent of the U.K.’s ad-supported video market by 2027.
Revenue from FAST services internationally is nowhere near levels seen in the U.S., says Danny Fisher, CEO of indie streaming studio and FAST juggernaut FilmRise. “But we are ultra-focused on international because I think we are going to see [revenue] parity and to beyond parity, where more revenue is coming out of international.” In some Western European territories, he notes, monetization levels in some territories are on par or above that of the U.S..
One key ambition behind the launch of FAST offerings in Europe is reaching out to and capturing new or previously lost audiences.
Freely, for example, launched earlier this year as a free streaming service backed by U.K. broadcasters BBC, ITV, Channel 4 and Paramount Global’s Channel 5. A key target audience for Freely is people in internet-only homes, which amount to around 4 million in the U.K., but that number is growing rapidly, according to the partners. “The new service marks the first time all four of Britain’s public service broadcasters have come together to launch a streaming proposition, signaling the beginning of a journey to secure the future of free TV through collaboration,” they said at launch.
Kieran Clifton, director, BBC distribution and business development, at the time called the launch a “historic moment for U.K. television.” “Collaboration between the U.K. public service broadcasters (PSBs) is critical to connecting and protecting all audiences as we transition towards the streaming era — and delivering live TV over broadband for free is a ground-breaking innovation that will future-proof public service broadcasting,” he says.
Adds Martin Goswami, ITV group strategic partnerships and distribution director: “Bringing live streamed channels and on-demand content together in Freely gives viewers the opportunity to access the very best in British content as easily as possible, from live and recent programs to a wealth of on-demand options.”
Bisson points out that around a quarter of FAST channels are based on a single intellectual property. And those are typically beloved franchises. Think of it as the TV version of comfort food. “Call it Love Island channel, Baywatch channel, Midsomer Murders channel, whatever it may be,” he says. “So with large content owners, we tend to see them focus on those single IP channels for classic, popular series, where they’ve got a huge archive of, say, 20 seasons, with 20 episodes per season, and they can just run a channel off the back of that.”
More and more FAST offerings are launching in cooperation with partners. “In particular this year, I have been quite taken aback by just the sheer number of partnerships,” notes Kerr. “Nobody is going this alone.”
Jollet echoes that: “In recent years, we have reinvented ourselves internationally, forging new and innovative partnerships that are transforming the free business across markets, including our collaboration with Viaplay in the Nordics and M6 in France. Strengthening these partnerships to shape the future of free streaming locally in each of these markets is key to our continued expansion.”
Thanks to a significant increase in popularity among 15 to 34-year-olds, big AVOD and FAST services are nearing or topping the 15 percent mark of monthly users among the entire French population, with Pluto TV hitting 26 percent, Paramount says, citing data from Baromètre des Usages Audiovisuels.
When it comes to other FAST channels and AVOD libraries, the more specialized and obscure, the better their chances may be, experts say. “Niche is a great opportunity to service specific tastes within that environment because if you can find a niche of scale where the content costs are not huge, it becomes a viable proposition,” explains the Ampere expert. “Whereas in the traditional TV space, just the cost of broadcast or transmission or space on a satellite transponder would have made that uneconomical.”
Tubi management says it has targeted these fan audiences successfully in the U.S. and has been bringing the same approach to the U.K. “We like to call them fandoms,” CEO Anjali Sud tells THR. “Our CMO [chief marketing officer] says we’re a fan of the fans.” Based on experience and user data and insight, “we have a sense of where there may be some fandoms that are underserved,” she explains. That is why Tubi launched with more than 100 premium Bollywood titles in the U.K., along with “a very rich Nollywood catalog,” and “a deep arthouse collection,” she says.
The biggest FAST content category in the U.S. so far is actually news, but that is due to “regional variations on news channels,” analyst Bisson notes. “From there, it goes to general entertainment, movies, and then sports, which is an interesting one — it’s not live sport, but it is programming around sport. That’s a big opportunity in Europe as well.”
Pluto TV’s Jollet also touts sports — and real breadth of content offerings. “We focus on providing a relaxing and comforting experience for users of all ages. From blockbuster lovers to niche fans, we have something for everybody, including sports with recent new channels like Darts, Real Madrid TV and BVB channels, comedy channels, music, TV series, and more,” he tells THR. “Our mission is to entertain the planet!”
With Walt Disney having reduced its channel portfolio in Europe and other entertainment giants also looking at possibly pruning traditional linear channel bouquets, FAST channels could emerge as an alternative. “They are in a really precarious balancing act where they are winding down or being forced to wind down their linear channel business while bringing up streaming to replace it, and you don’t want either one to go too quickly,” Bisson tells THR. “I see FAST as an alternative to the thematic cable channel business.”
And more FAST news is set to come out in the future. Streaming platform Rakuten TV’s CEO and president Cédric Dufour on Tuesday unveiled the launch of a new business line called Rakuten TV Enterprise Services at MIPCOM. Its goal is to “offer a high-quality, cost-effective solution designed for content owners and distributors to easily launch and monetize their FAST channels and video-centric apps.” Said Dufour: “”Rakuten TV Enterprise Services marks a significant step forward for our company, as well as for content creators and platforms aiming to grow their audiences and boost their revenue in an increasingly competitive market.”
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