The expansion of FAST and AVOD services is creating a new-look ecosystem in which TV manufacturers, third-party platforms and content rights holders can all capitalise on new ad revenue streams, writes Omdia’s David Tett.
Platform owners are in prime position to benefit from the ever–increasing advertising opportunities found with the rise of IP video and the revenue that comes with these.
For many platform owners, revenue derived from video and advertising reaches into billions of dollars.
For instance, Amazon’s video services – made up of Jack Ryan and The Lord Of The Rings: The Rings Of Power streamer Prime Video and AVOD service Freevee, which recently brought Australian soap Neighbours back from cancellation and is also is planning several FAST channels themed around the show – are expected to generate nearly $18bn of revenue by 2027 across subscription fees and advertising.
Although these video services are often available on third–party platforms and devices, many consumers use first–party hardware to access the associated video services.
Indeed, 54% of US consumers who own an Amazon Fire TV stick and watch Prime Video on a monthly basis do so via a media streamer more often than via built–in smart–TV apps, so these devices are often first choice.
Meanwhile, FAST services such as Pluto TV, Samsung TV Plus, and LG Channels have risen to prevalence in recent years, allowing media rights owners to monetise older content, selling advertising slots for content that would otherwise not generate revenue.
However, it is worth bearing in mind that FAST is primarily – to date – a Western Europe and Americas-focused proposition, with the likes of the aforementioned services operating in these regions and little coverage to be found in Africa or Asia.
FAST services have also found a home on smart TVs, although they can be accessed across all main devices. Some of the most popular services – from the likes of LG, Vizio and Roku – are only found on connected TVs, which boosts viewership on them.
However, with the expected roll-out of new FAST services, potentially from the likes of YouTube, Omdia expects smartphone viewing to grow.
Meanwhile, significant amounts of revenue are expected to come from FAST content services. Omdia forecasts the market will be worth $12bn by 2027, with the US seeing in excess of $10bn of this revenue.
The extract above is from ‘Video Device Platforms And New Content Opportunites’, written by Omdia’s principal analyst for addressable consumer devices, David Tett. To read more, click here (subscription required).