The consolidation of streaming services, channels, and content has turned into quite the maze—it's tough to tell who the players are, and even the names of some of those entities seem to change every month. If you have a solid content library, there's a good chance all of this activity has thrown a serious monkey wrench into your plans. These "wars" have seriously damaged the profit model to the point where some industry executives think it’s never coming back.

One evolving avenue is FAST channels (free, ad-supported streaming television). They’re on the rise and it’s important to know how they operate to see where potential opportunities lie. Here’s what you should bear in mind:

1. The FAST Revenue Models  

You can form licensing agreements with FAST channels, which might encompass singular content or a bundle, and these agreements can be financially structured around licensing fees, revenue sharing, or a hybrid of the two. Ad revenue is common and based on metrics like views or impressions, which can be an enticing option to monetize your assets long term.

A notable perk of leveraging FAST channels is the plethora of ad strategies, such as targeted ads, diverse ad formats, and program-based ads, which can be optimized by mixing and matching to align with company objectives and the demographic profile of the content. 

2. Flexible Distribution Strategies

The distribution methods used for FAST content are just as varied. They range from the obvious—web streaming, tablets and phones, and dedicated connected TV platforms—to more complex options like partnerships with other streaming platforms, cable providers, OTT (over-the-top) providers, and so on. Distribution can be broad or targeted depending on the specific content and the overall business strategy.

3. Niche Content

For film libraries considering partnering with FAST channels, it is essential to understand the kind of content that performs well on the various FAST platforms. Niche content that has a dedicated following, classic films that evoke nostalgia, and indie films that might not have had broad distribution can find an audience here—it just has to be the right fit. It’s also vital to keep a pulse on trends and preferences to ensure the content remains relevant.

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4. Navigating Negotiations

When negotiating with FAST channels, you need to consider several factors. One is the revenue-sharing model. It is crucial to negotiate a fair share of the advertising revenue. Another aspect to consider is the exclusivity of content. Some FAST channels may require exclusive rights to the content, which can limit other revenue opportunities. It is essential to weigh the benefits and drawbacks of exclusivity agreements.  

A critical benefit of streaming services, including FAST channels, is that they generate a large amount of usable data, especially useful when determining where to distribute tightly niched and focused content. 

It's easy to drill down and get user and viewership metrics, analyze content consumption, track engagement, and implement personalization. From there, the content can be altered or re-bundled to optimize revenue and profit.

Streaming services are not always so quick to share this knowledge—a common complaint from content producers at industry events—but if you can negotiate getting your hands on this data, you can learn a great deal that helps inform your future distribution decisions.

5. Explosive Growth Potential

With the increasing costs of multiple subscription services, consumers are looking for more budget-friendly alternatives. FAST channels allow viewers to access content without any upfront costs. While the ongoing consolidation of conventional streaming platforms may be confusing, the growth potential of FAST channels isn’t. To put it simply, FAST channels are growing. . . well, fast. And they’re generating a LOT of revenue as they do.

How quickly? According to technology researcher Omdia, FAST channel revenue grew by nearly 20x between 2019 and 2022, and revenue is expected to triple to $12 billion by 2027.

It’s important to note that about 90% of that growth is taking place in the US—there are already over 1,500 channels available in the American market alone. But it’s logical to assume that the international market for FAST channels will also grow exponentially as these channels become better known and more viable for viewers.

Maximizing Profit

While FAST channels may be game-changers in the world of streaming, the key to their success will, as always, be discoverability. To maximize the revenue and profit potential of your film library, you need to decide whether it’s large enough to support an individual FAST channel or place it elsewhere, then adopt the best strategy based on the factors that have been introduced and broken down here. 

Complex Film & TV Rights Management

Entertainment rights management has grown exceedingly intricate with the emergence of new distribution channels. If you're reliant on basic software to manage your titles, you're likely overlooking complicated opportunities and exposing your business to risks. 

For tips on contemporary solutions to tackle challenges in managing film rights, royalties, ancillary rights, OTT distribution, regional rights, and global currencies, download our ebook, Complex Film & TV Rights Management: History, Current Tracking, and 21st Century Solutions!

FilmTrack is an RBC Company and subsidiary of City National Bank Member FDIC. City National Bank is a subsidiary of Royal Bank of Canada.