by Jesse Shemen, CEO of Papercup
With digital media behemoths Buzzfeed News and Vice both shutting up shop in the last 6 months alone, it’s clear that the reality of today’s digital media landscape is more volatile and fragmented than we once imagined.
New technologies are rapidly transforming the way we consume content, and continue to do so at pace – Apple’s latest VR headset may well be the iPhone of tomorrow.
For that same reason, effective content distribution is becoming an increasingly digitised affair. The evolution of the market is therefore deeply interlinked with that of new technologies, such as AI.
As these continue to progress at a staggering rate, and redefine what’s possible, companies have to evolve more rapidly than they’re used to. As Vice and Buzzfeed know all too well, this carries risk – but also massive opportunities.
One of the most surprising media winners of the last five years has been Free Ad-supported Streaming Television (FAST) – the entertainment sector’s fastest growing segment. Global FAST revenues will almost triple between 2022 and 2027, reaching just over $12 billion.
In a webinar we hosted recently, both Cineverse COO Tony Huidor and Marion Ranchet of the Local Act Consultancy asserted that FAST is riding a wave of ‘choice paralysis’. Confronted with the overwhelming yet limited selection of content offered on streaming platforms, audiences are coming to value FAST’s decision-free proposition.
The rise of the format began in the US, which currently dominates the global market with an impressive 90% share. But countries around the world are catching up, as the rising cost of living has coupled with the aforementioned discoverability fatigue to promote subscription culling en masse.
In fact, FAST revenue has surged by almost 50 times between 2019 and 2022 in the rest of the world.
In response to this trend, we recently coauthored a report with TBI Vision which captured insights from leading industry figures to shed light the rapidly-evolving global FAST market, and explore to what extent new technologies like AI were informing strategies.
All offered unique points of view, with outlooks informed by the needs of their brand. But what struck me most about all of their remarks were two common threads. First, was the speed at which they were mobilising to capitalise on the opportunities discussed. Second, was the diverse array of tools they were betting on for success.
The European market, for example, poses unique challenges. In conversation with us, Ranchet has stressed that the opportunity here is massive, but highly fragmented. In Germany alone, for example, ad revenues are expected to reach $214m by 2027 – making it the 4th largest market outside the US.
The European FAST market has been a slower burn than the US to date due to the popularity of pre-existing free-to-air broadcast channels. However, as Ranchet points out, the fact that telecoms companies and pay-TV providers are moving into the space shows that it’s not just a passing fad.
These platforms already have in-built audiences they understand and can market FAST offerings to, which will fuel growth at pace. International companies looking to move into the market therefore need to develop attractive, localised content offerings quickly if they are to make any entry successful and sustainable.
It’s highly likely that AI’s ability to facilitate localisation at scale, whether through automating dubbing or otherwise, could play a decisive role.
Latin American presents a similarly significant opportunity – both Brazil and Mexico are predicted to be among the top five FAST markets by 2027.
As a major pay-TV market, where YouTube is also highly popular and there is a history of strong AVOD uptake, driving hours of viewing is not the challenge facing new entrants.
Here, the challenge is about drawing audiences away from these other free-to-view options – which are fighting tooth and nail to keep them.
The announcement of YouTube’s multi-language audio feature earlier this year was a clear attempt to keep internationally-minded content owners on the platform.
For Latin America this is a sensible bet – we know that localisation preferences can be make-or-break for audiences in the region. Recent research conducted by YouGov showed that among Mexican adults who watch no foreign language content whatsoever, 82% preferred a dubbed version to a subtitled version of a video clip.
The arrival of new technologies that make localisation faster and more affordable, therefore increases the feasibility of external platforms’ expansion into Latin America, as they will enable content owners to reach otherwise disengaged audiences, and with them, the backing of advertisers.
Ultimately, AI tools aren’t everything – as Ranchet points out, ‘you need to have a bespoke strategy, market per market and that takes time’. Content offering is a huge part of that – the likes of Squid Game can’t be filmed in a day.
But what’s non-negotiable in every instance, is integrating scalability into distribution where possible so ideas can be developed, tried and tested before markets gain maturity – and this is where technologies will hold sway.
As Free Ad-Supported Streaming TV goes global, content owners don’t just need to move fast – they need to move now.