Picture this: a world where your living room TV dances to the tune of streaming, where the remote control is your magic wand to an endless sea of content, and where the word "advertisement" doesn't send you scurrying for the hills.
Welcome to the audacious universe of Free Ad-Supported Streaming TV (FAST) – a realm where the only fast thing isn't just the streaming, but also its
skyrocketing growth and the ad dollars pouring in like a monsoon in the Sahara.
Let's talk turkey with some spicy numbers that would make even the most cynical of ad execs raise an eyebrow. Amagi, the cloud-based SaaS wizard, has been peeking into its crystal ball and what it sees is enough to make your head spin. A 15% growth in ad impressions in Q3 and a whopping 28% in Q4. Not to mention, channel deliveries shot up by 45% in Q3 and 25% in Q4. If this were a horse race, FAST would be the
thoroughbred leaving others in the dust.
Gavin Bridge of FASTMaster Consulting, a name you’d expect to see in a spy thriller, not a quarterly report, chimes in, saying FAST is an underutilized ad market. He's betting his chips on 2024 being the year when ad spending plays catch up with viewing trends. And, as it turns out, more than half of us are okay with watching ads if it means getting high-quality content for free. Who knew?
Amazon Prime Video, not one to
be left behind in any race, is expected to rake in over $1 billion in 2024 in ad revenue. This doesn't even include the moolah from Thursday Night Football, Twitch, or Freevee. Amazon's strategy? A savvy blend of top-funnel reach and bottom-funnel targeting, making it a formidable foe to both traditional TV and other streaming giants.
By 2024, it's eyeing a cool billion in ad revenue – and that's not even counting the extra cash from their side hustles like
Thursday Night Football, Twitch, or Freevee. It's as if Jeff Bezos looked at his streaming service and said, "You know what? Let's turn this up to eleven." Amazon's strategy is like a chess grandmaster playing 3D chess - it's all about ensnaring viewers at the top of the funnel and then wooing them down to the bottom with the precision of a cupid on Valentine's Day.
Amazon, in its quest to become the Zeus of the streaming Olympus, isn't just throwing darts in the dark. Their advertising game
is more like a perfectly orchestrated symphony – with each note hitting just right. At the top, they're casting a wide net, reeling in viewers with the allure of their extensive library. Then, as these viewers trickle down the funnel, Amazon's targeting becomes as sharp as a sushi chef's knife. This approach is not just a gentle nudge against the competition – it's a full-on, Shakespearean drama-level challenge to both the old guard of traditional TV and the new school streaming
contenders.
So, what does the financial future look like for Amazon Prime Video? Picture Scrooge McDuck's money bin, but with ad dollars instead of gold coins. In the high-stakes poker game of streaming, Amazon is going all-in. This aggressive push into ad-supported nirvana isn't just shaking up the streaming world; it's turning it upside down and giving it a good shake for loose change. As Amazon continues to refine its ad-targeting mojo and expand its content empire, it's not just setting a
new high score in the streaming game – it's changing the game entirely. Watch out, streaming world; Amazon Prime Video isn't just playing to play – it's playing to redefine the art of streaming success.
Amazon Prime Video is diving headfirst into the ad-supported pool and boy, does it plan to make a splash! Launching on January 29, this newbie in the ad game is already eyeing a cool billion in ad revenue in its freshman year, according to the crystal ball gazers at MoffettNathanson Research.
And hold onto your remotes, because they're not stopping there. By 2025, they're looking at a $1.75 billion payday, climbing to a dizzying $2.76 billion by 2027. Amazon's approach? Think of it as the cool uncle at the family BBQ – fewer ads, more fun. We're talking just four minutes of commercials per hour, a stark contrast to the ad marathons on other platforms. This strategy is like serving up a gourmet meal with just the right amount of seasoning - enough to tantalize but not overwhelm.
But wait, there's a plot twist! Michael Morton, the media oracle at MoffettNathanson, is waving a conservative flag for the initial sell-out rates – a modest 60% in 2024. But like a fine wine, these numbers are expected to mature beautifully, reaching a robust 85% by 2025 and a near-perfect 90% by 2027. It's a slow dance approach in a world used to breakneck speeds, but hey, sometimes the tortoise beats the hare.
Now, let's pull back and
gaze at the bigger picture. Amazon's not just betting on ads. They're also playing the 'pay-not-to-see-ads' card. About 15% of U.S. Prime subscribers are predicted to shell out an extra $2.99 a month to keep their viewing experience ad-free. That's another $400 million in the kitty. Toss in the global ad revenue and incremental subscriber revenue, and you've got an additional $400 million. And let's not forget Amazon FreeVee, playing in the same sandbox as other FAST channels like Tubi and Pluto
TV. This little venture is set to bring in a hefty $1.7 billion by 2025, along with a sweet $600 million from "Thursday Night Football." Add it all up, and Amazon is looking at a whopping $4 billion a year, elbowing its way to the top of the streaming heap. MoffettNathanson is already placing bets on Amazon and Disney neck-and-neck in the race for AVOD ad revenue supremacy. In the grand circus of streaming, Amazon Prime Video is juggling more balls than most, aiming to be the ringmaster of this
wild show.
Despite the abundance of FAST channels, most households stick to one or two per month. The goal? To replicate the heyday of cable when people sampled an average of 17 channels.
Artificial Intelligence (AI) has taken center stage as the virtuoso conductor. It's the new secret ingredient, the spice that makes the streaming stew irresistible. Imagine having a personal TV butler, decked out in digital tails, who knows your tastes better than you know
yourself. This AI maestro doesn't just suggest content; it curates an experience tailored just for you. From the vast ocean of streaming options, it plucks out the pearls that match your desires, ensuring that your next binge-watch is always a hit.
But what good is a show if the audience isn't hooked? In this age of digital abundance, viewer attention is the new gold standard, the holy grail that every content creator and advertiser is questing after. And guess what? Reports from Vizio and
Adelaide suggest that FAST channels are hitting the bullseye. These channels aren't just playing in the background like elevator music; they're commanding attention like a rockstar on stage. This shift signifies a crucial evolution in the streaming narrative. It's no longer just about delivering content; it's about casting a spell that keeps viewers glued to their screens.
In the grand chess game of viewer engagement, FAST channels have emerged as the knights in shining armor. They're not
just outshining traditional TV; they're rewriting the rules of the game. The key to their success? A magical blend of AI-driven content curation and a format that keeps viewers invested. It's not about bombarding the audience with options; it's about presenting the right content at the right time, creating a viewing experience that's as addictive as scrolling through a feed of endless memes. In the race for viewer attention, FAST channels are sprinting ahead, proving that in the digital age,
attention is not just valuable – it's everything. It's not just about streaming anymore; it's about capturing and holding that elusive viewer attention.
As we barrel into the future, FAST isn’t just a trend; it’s the new normal. It’s reshaping the TV landscape, offering a smorgasbord of content, and turning the ad world on its head. Advertisers, content providers, and consumers – buckle up. The FAST ride is only getting started, and it promises to be a thrilling one.
So, there you have it. The FAST saga – a story of growth, transformation, and a little bit of advertising magic. It’s not just about streaming TV; it’s about redefining TV itself. And if you're not paying attention, you just might miss the next big thing. Welcome to the FAST lane, folks – it's going to be one heck of a ride!
