Why media companies need to pay more attention to FAST services

Consumers shifting significantly toward ad-supported streaming has been accepted as fate ever since Disney+ and Netflix announced they would launch ad-supported tiers, but FAST services like Pluto TV and Tubi have long anticipated that future. In fact, FAST services, which allow consumers to stream scheduled content linearly, as well as access on-demand movies and shows for free, have been around for years, but they have largely been relegated to a second-class tier of streaming services.

New Morning Consult research found that FAST services accounted for four of the top 10 most widely used video streaming services as of late July. In other words, the reach of leading FAST players like The Roku Channel, Tubi and Pluto TV is likely much more significant than many suspect, especially in the context of major subscription video on demand players like Disney+ and Hulu.

FAST services have not penetrated the zeitgeist with original content, but the fact that consumers are able to gain free access to platforms like Pluto TV and Tubi without the need to sign up for an account (as is required to stream low-cost ad-supported services) helps explain their rise.

However, the top FAST players are not used as frequently as the top SVOD and ad-supported video on demand players: 28% of adults in the United States said they used Disney+ and Hulu’s ad-supported tier at least once per week in July, while those figures were lower for The Roku Channel (22%) and Tubi (20%). Moreover, greater than 50% of US adults said that Netflix or Prime Video was their most-used streaming service in June.

Still, uptake and frequency of usage of FAST platforms are likely to increase in the year ahead as consumers turn more toward cheaper and free video streaming alternatives due to inflation and economic uncertainty, Morning Consult forecasted.

Furthermore Morning Consult's report noted that between a quarter and a third of millennials are habitual users of the major FAST platforms, viewing them a few times a week or more — and there is likely room for those figures to grow. These services have smaller Gen Z adult audiences for now, but they could see a greater influx of younger viewers if they prioritize developing original content, rather than just championing classic TV shows and franchises.

“The caveat is that it will take time for new FAST platforms to generate meaningful revenue streams for media conglomerates, given the already-crowded streaming market. But a major company could launch a new service and plausibly reach 15 million monthly users within five years, which Pluto TV achieved. It generated over US$1 billion in revenue last year and appears on track to do the same this year, hinting at what a significant revenue stream a popular FAST service can be,”  commented Kevin Tran, Media and Entertainment Analyst at Morning Consult and the author of the report.

“While US$1 billion in annual revenue in five years may represent wishful thinking for many media companies that are just now getting into the FAST game, any revenue will help soften the blow from consumers forgoing paid video streaming services as subscription fatigue worsens in the years ahead,”  Tran concluded.