Facing Reality at StreamTV Show 2024: Market Fundamentals, Monetization, and the Evolving Landscape of FAST Channels

We recently attended the StreamTV Show in Denver, CO, held from June 24-26, 2024. The event featured a variety of sessions focused on key areas such as Advertising, Monetization, Product/UX, and FAST Channels (Free Ad-Supported Streaming Television). In partnership with Claritas, we participated in a joint keynote session within the Monetization track entitled “Winning in a Share-Driven Market: New Perspectives on Optimizing Subscriber Value.” In conjunction with this presentation, we revealed an insightful video that delved into optimizing subscriber value:

Reflecting on the event, it is evident that 2024 was a “time-to-face-reality” year for the streaming industry—a stark contrast to the growth-focused buzz of 2023. Last year, FAST channels were the poster child, symbolizing exuberance and aggressive expansion. The mantra was: should you create FAST channels? Absolutely! And, how do you grow them? Bigger, better, more. 

This year’s event, however, provided a sobering reality check. A Wall Street-centric opening keynote set the tone, steering attention toward fundamentals: revenue, margins, the realities of valuation, and capital allocation. We are now scrutinizing the streaming industry’s basics, weighing media and streaming services against other sectors. Gone are the days of unbridled growth and wild subscriber valuations; now, the focus is on tangible metrics.

Monetization: New Strategies and Tactical Realities

The discourse on monetization was divided into two perspectives:

30,000-foot view: New pricing models, bundling, and distribution strategies are gaining traction. The market is maturing, and providers must be savvy in their approach to sustaining and growing their user base.

In-the-trenches view: Personalization, subscriber engagement, content discovery, and retention are more critical than ever. Improving user experiences is paramount to reducing churn and maintaining a competitive edge.

Advertising: Tech Evolution and Revenue Focus

The event showcased advanced advertising technologies, intelligent targeting, and a renewed focus on monetization. With the heightened penetration of AVOD (Ad-supported Video-on-Demand) and FAST, advertising has taken center stage as a revenue generation strategy. This shift reflects the increasing reality that sustainable growth now hinges on robust ad strategies.

Industry Dichotomy: Giants Vs. The Rest

There was significant emphasis on the disparity between the top-tier streaming services and the rest. The top 5-8 giants are consolidating power and wealth, setting a challenging stage for the smaller players. Industry consolidation looms large as these major entities become bigger and richer, leaving smaller services grappling with survival strategies.

The State of FAST: Shifting from Growth to Optimization

FAST channels continue to be an essential facet of the streaming landscape, but the focus has shifted. The buzz is no longer about creating them in a frenzy but rather how to monetize and advertise effectively within this model. Discussions covered the optimal number of channels to maintain, creating and profiting on skinny margins, and the survival tactics for smaller entities against giants throwing out single asset channels to exploit large content libraries.

There are now more FAST channels than can be supported by the current level of advertising revenue flowing into the space. Compounding this issue is the challenge of buying ad space consistently across all these channels at scale. This has created a quiet—mostly unspoken—consensus that rationalization in the FAST space is likely in the coming year or two. The industry recognizes that not all channels will survive, and a more strategic approach is necessary for sustainable growth.

Back-End and Cloud: A Necessary but Subdued Presence

While cloud-based solutions and back-end operations had a less prominent place this year, their presence was still considered vital. These systems are part of the industry’s engine room—critical for operation but no longer the forefront of innovation discussions.

Conclusion: Navigating the New Streaming Reality

With these takeaways, it is clear that the streaming industry is undergoing significant recalibration. The exuberance of unfettered growth is tempered by a greater acknowledgment of economic fundamentals, practical monetization, and competitive realities. The giants will get bigger, the smaller players will innovate and adapt, and all will navigate the evolving landscape together.

As we look ahead, the insights from this year’s StreamTV Show provide a roadmap for navigating these new realities—emphasizing strategic growth, robust monetization models, and the optimization of emerging channels like FAST. Stay tuned for more developments as we continue to explore these crucial industry dynamics.