Among the dozens of film and TV titles cut from streamers, Disney+ has dropped the TV sequel Willow while Paramount+ has cut its Twilight Zone reboot, the Grease prequel Rise of the Pink Ladies and the Star Trek spin-off Prodigy. In the US, Westworld and Minx have vanished from Warner Bros Discovery’s Max. There are dozens more gone, and more still to be cut.
The reason is a fundamental realignment of streaming economics: Netflix’s deal for Seinfeld, or Peacock’s deal for The Office – both worth a breathtaking US$500 million - are the tip of an unsustainable iceberg. It’s the reason why Comcast wants to cut US$1 billion from NBCUniversal and the BBC wants to cut £100 million from its originals budget. It’s also why Spotify jettisoned its deal with the Duke and Duchess of Sussex. Big-ticket deals make great headlines, but they will not keep the lights on.
In its decade-long life, traditional streaming has created a marketplace of warehouses, essentially shopfronts operated by studios or broadcasters, such as Foxtel’s Binge, Nine’s Stan or, in the US, NBC’s Peacock and Warner Bros Discovery’s Max, which sell subscriber access to an on-demand library.
That landscape is now being reshaped in real time, affected by the competing dynamics of rising operating and programming costs, and downward pressure on the consumer’s budget. In short, streaming TV can’t afford itself. And the visible effect is streamers pulling content offline, to reduce their own licensing and residual costs.
The two rising spin-off businesses are FAST TV, that is, free ad-supported television, which is usually a package of linear (scheduled) channels built from significantly smaller (and cheaper) program libraries. The other is the better-known AVOD, advertiser-funded video on demand, better known as free-to-view streaming TV.
Australians are already familiar with a form of AVOD, with most FTA channels offering market-leading program inventories with no subscriber cost. In the US, where public television has been largely de-funded, such competition has been slower to come to the market.
And if it sounds too good to be true, it might be. It certainly seems like TV’s new thing is more or less the same as TV’s old thing. Watching TV programmed by a linear schedule is one thing, but selling it to the US$280 billion global TV business as the future is something else.
What might surprise you is that FAST TV is already worth US$7 billion globally, and is expected to reach around US$12 billion by 2027. In the US, across 2022-2023, almost 60 per cent of households had installed and were using at least one FAST TV platform.
The two highest profile US examples are the Paramount-owned Pluto TV and the Fox-backed Tubi. Both offer viewers ad-supported content available either as linear streaming “micro”-channels, or on-demand. And both have substantial television program and film inventories.
Hardware manufacturers have also pushed into the space, with Amazon operating the Freevee service, Roku operating channels within its US-based Roku Channel app, and Samsung operating the Samsung TV Plus platform, which comes built into the firmware of Samsung TVs.
Tubi has been available in Australia since 2019, and Samsung TV Plus since 2020. Pluto TV is not available in Australia, but online reports suggest Australians are already accessing its content by using virtual private network (VPN) software, which circumvents the US-only geo-restrictions on the platform.
Some channels on offer are generic movie, sport, kids or music channels. Others are built around a specific program. Pluto TV, for example, has Star Trek, The Love Boat and Happy Days channels, built out of Paramount’s vast television library.
Speaking at the Monte-Carlo Television Festival last week, German television executive Marcus Ammon said the shift represented a significant change for viewers, marking the return of the commercial break, something streaming had largely phased out.
“We all enjoyed the freedom not to have advertising breaks in a streaming show, and now it seems people will accept advertising in order to pay a lower [or no] price,” Ammon said. Ammon heads one of Germany’s key drama production houses, Bavaria Fiction, and is Sky Germany’s former head of original production.
It also marks a shift in focus from original content to library content, Ammon said, given many FAST channels were built around legacy IP and use viewer familiarity and loyalty to draw an audience. “Very few fast channels, at this point, are being built around a new program,” Ammon said.
In real terms, FAST TV’s slice of the larger television business is still relatively small. But it is lucrative and dollars tend to be the marker that guides decision-making in the broadcasting business.
“We are talking about the evolution of TV,” Samsung TV Plus executive Antoine Chotard told the conference in Monte-Carlo. Chotard’s brief at Samsung includes content distribution and monetising content inside the “connected TV ecosystem”.
“Some experts are asking the question, is FAST the new cable? And it may be the case,” Chotard said. “FAST is one piece of the streaming revolution. And it’s a slow revolution, but it is also part of the hybridisation of the streaming space.”
FAST TV also represents a shift in focus away from the golden age of European-led television, galvanised by programs like The Killing and The Bridge. Such programs were “very much defined by horizontal storytelling, series of 4, 6, 8 episodes and horizontally narrated,” Ammon said. “That is a concept that can hardly be used for FAST.”
The emergence of FAST TV as a business will also bring the question of rights ownership into the spotlight, as rights are often negotiated away from less powerful writers as a trade-off to get access to deals with studios and broadcasters, Ammon said.
“The question we have is how can the production business benefit from this business if you are not a rights holder? [As a writer] you hardly ever retain rights. Is this an El Dorado [for television]? And if it is, for whom? The viewer? The advertising industry. The aggregator?”