As a content investor, I am beyond frustrated with the current state of FAST (Free Ad-Supported Streaming TV) channels. The revenue share model has become a convoluted mess, largely due to the legacy practices perpetuated by View TV. The core issue lies in the compound percentages that are leaving content owners and broadcasters with a meager 10% of gross revenue. This is a direct result of intermediaries higher up the ecosystem trading minimal effort for hefty revenue shares, all to avoid technology and SaaS fees. This practice is costing the ecosystem far more than simply paying for the necessary technology or effort.
The Intermediary Problem – Legacy FAST Channel Ecosystem
Companies closer to the original ad trade are taking up to 30% each for providing relatively unmanned ad trading services. This is in stark contrast to the much lower costs associated with paying for the technology and effort directly. For instance, multiple layers of Supply-Side Platforms (SSPs) are taking 20%, or $3 CPM, in exchange for a simple $1,000 setup and a trading fee of $0.25 CPM. This setup costs more than ten times less, yet these automated ad-trading parties are turning over at least double what the content owner and creator receive, with a fraction of the effort.
Escalating Nightmare for Content Strategy Dependents
The situation has escalated to the point where legacy channels are receiving less and less money. They cannot afford to preferentially pay for technology and are left hoping that a third party will fix the issue. However, intermediaries are now turning over so much money from this nightmare that it is hard to unravel the problem on behalf of the content monetization strategy. This has rendered the FAST revenue model incapable of supporting linear broadcasters and content studios.
Investor Illusions for FAST Channel operators Content Owners should trust
Most FAST channels are not currently suffering from a lack of revenues because they are investor-funded on the pretense that the revenue model will be fixed soon. However, the majority of the content for these channels is on a revenue share basis, with content owners trusting the intermediate FAST channels to maximize revenue. In reality, these intermediaries are not challenging the ecosystem on behalf of the content owners. Instead, they are basking in investor support with no correction plan in sight.
The Exodus of Audiences from FAST Channels due to content quality
FAST channels are unable to support new content, content creators, and premium news. Audiences are leaving in droves as the content monetization take is unregulated, opaque, and not changing anytime soon. Legacy FAST Channel Platforms and the FAST Channels should be working together to fix these issues by managing the problem on behalf of the generous content owners.
A Path Forward in Ad-funded Streaming Content Strategies
The simple route forward is to remove all third-party SSPs and change each CTV platform to a single-level SSP. This would involve plugging directly into the demand network via a regulated ad exchange, such as the View TV AdX. This approach would bring the platform and the content closer to the ad buyers. By ensuring that content owners receive two-thirds of the gross revenues, we can open the doors to premium content and premium linear channels. This would attract real audiences, providing many multiples more of audiences, enough to account for the lower revenue share and actually provide double revenues with a fairer ecosystem business model.
It’s time to unravel this revenue share nightmare and create a sustainable, transparent, and fair revenue model for FAST channels. The future of content monetization depends on it.
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