Season Of The FASTS

There was a time, in that other world, the one that existed before Coronavirus, when many of us wondered about the fate of ad-supported TV.

Would most viewers opt for ad-free versions of Flixes and other services because for a mere $5 or so a month, they would be saved from a world of interruptions, no matter how well targeted those interruptions were?

It was a distinct possibility, especially for a certain kind of viewer, one who mostly just watched specific TV series, plowing through their time-shifted playlist one at a time. For those viewers, ads are likely just an interruption, another distraction from the task at hand.

Or should I say “were”?

Because in the new world we find ourselves in, all bets are off.

It’s likely that many viewers, feeling the actual slap of economic hard times or merely anticipating them, will decide that they can live with commercial breaks if it means saving that extra $5/month.

The Flixes have done a very good job of making ad loads more tolerable—witness Hulu’s “90 Second Rule”—and more targeted as well. (e.g., no pharma ads.)

Many more viewers will decide that subscription fees are not something they can indulge in right now, especially when they’re discovering the wide range of what’s available right now for free on the FASTS, the free ad-supported streaming TV services like Pluto, Xumo, Tubi, the Roku Channel and IMDBTV. Not to mention the range of free ad-supported niche channels and the built-in free services TV OEMs are now offering, like VIZIO’s WatchFree, which is powered by Pluto.

For many viewers, that is going to be good enough, given that they can watch everything but sports for free. (And maybe even sports too, once they return, if they’re in an area where over the air reception is possible. Because over the air is free too.)

In light of the economic fallout from the pandemic, free TV options are only going to grow. VIZIO is a prime example of this. Having seen viewership on their free ad supported apps and streaming TV services grow a whopping 59% during the first three weeks of March alone, VIZIO moved to add 30 new free streaming channels to its SmartCast lineup this week, including news from USA Today and sports from the Fubo Sports Network, along with niche channels like Docurama and The Design Network. 

“More people are discovering our free content offerings, and more people are making it part of their daily routines right now,” said Mike O’Donnell, Senior Vice President, Platform Business. “We recognize the important role that TV plays in the home, especially when families are being asked to stay inside. It’s important for us to keep innovating and we are committed to providing additional premium and free content options to our customers.” 

What It All Means

Fallout from the pandemic means that there will be a lot more ad-supported OTT viewers out there—way more than the industry was anticipating—which means much more ad-supported inventory will be available.

Depending on how much advertising picks up over the next few months and whether advertisers determine that the FASTS are the only place to reach these millions of viewers, CPMs may pick up as well.

The FASTS can take advantage of this by not getting greedy the way the networks did, meaning they’ll need to keep ad loads light (no more than five or six minutes each hour to make sure that viewers actually pay attention to the ads rather than tuning them out), and by using advanced analytics to enhance ads buys, so that, for instance, advertisers can understand factors like the best times to run ads during specific shows and during which shows and time slots are viewers more likely to pay attention during the ad breaks.

The massive amount of viewing data is what sets OTT advertising apart from traditional linear: everything is trackable, everything is addressable and provided existing privacy laws are adhered to, viewer behavior can be tracked across platforms, enabling metrics like multitouch attribution, which tracks a viewer’s journey across the sales funnel.

This does not mean that viewers will give up ad-free or subscriptions services altogether, but rather, that they will become more judicious about them. So instead of maintaining subscriptions to multiple services all year long, viewers will subscribe to a single service for a month to binge the series they’ve missed before unsubscribing and moving on,

A Time Of Great Uncertainty

I’ll add the caveat that any future predictions now are just guesses—we have no idea what the next three months will look like, let alone the next three years.

What we can be sure of though, is that right now, in April 2020, the FASTS and free TV are gaining viewers due to quarantine conditions and economic uncertainty. They’re at a point now too, quality-wise, where viewers who sample them now are likely to be impressed enough to stick around, even when we come out on the other side.