Sports Content Expected to Increasingly Migrate to FAST Channels

Sports Content Expected to Increasingly Migrate to FAST Channels

Free Ad-Supported Television (FAST) usership is growing–fast. Ampere Analysis reported that 37% of U.S. internet users used an AVoD service in Q3 ’22, up from 17% in Q3 ‘19.

The emergence of/growth in internet connected televisions (i.e., distribution), and the increasing costs associated with unbundled content are spurring adoption.

However, much of the programming on digitally native platforms, like Roku, PlutoTV, Xumo and Samsung TV Plus, remains entertainment focused. No major sports or sports media property has allocated live rights to a FAST channel, and few have invested in building out otherwise compelling content offerings for them.

Existing contractual limitations and the need to manage Pay TV affiliate relationships have prevented rights owners from fully embracing the opportunity. Any potential upside has been outweighed by the corresponding risk (think: damaging future rights negotiations).

But as purchasing power –and reach– within the Pay TV universe continue to dwindle, the expectation is rights holders will find a way to get comfortable with sports content living in more places. And FAST channels are expected to be among them.

A FAST channel builds “goodwill and its marketing,” Jason Coyle (president, Stadium) said. “It’s great for [sports properties and] sponsors to be associated with a free, broadly available execution. We’re [currently] talking to a number of [rights owners], and I wouldn’t cap how significant the rights could be if we get [the partnership structure] right.”

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Legacy entertainment companies with large content libraries have embraced FAST and already moved programming over to those platforms en masse.

“There are now 1,400 [plus] FAST channels,” Coyle said. “So, the category has been well confirmed.”

Just not in sports. While a plethora of niche sports-centric options exist, few maintain any semblance of brand presence and the content that lives on them is largely of low value.

While FAST has been an afterthought in the sports media equation, several of the 20+ ad-supported platforms in operation are eager to change that. There is a desire to capture the higher CPMs sports content can command (it must be noted that digital CPMs are less valuable than CPMs on established platforms).

At the same time, FAST channels can help fulfill the sports content void that exists outside of the cable bundle.

“When you look at the landscape, the best rights are splintering and there is a proliferation of players,” Coyle said. “Even in an up economy, our research shows fans are [only] going to pay for two or three of those [services]; they’re going to need something else.”

And FAST channels can help support tier two and tier three rights owners in need of broadening their reach. Just yesterday, Tennis Channel’s FAST network (T2) debuted on Amazon Freevee and Fubo.

“It’s [about] trying to make yourself relevant to as many fans, in as many places, as you possibly can,” Coyle said.

Monthly active users vary across platforms. But the top platforms have 50 million plus (Pluto has 80 million).

Of course, that is the total addressable market, not the audience for any one channel.

Tier one sports or sports media properties could, in theory, launch FAST channels alongside their existing linear television and/or streaming partnerships as part of a holistic distribution strategy. Rights owners/holders would simply need to program it with content that isn’t already assigned elsewhere (think: archived or condensed versions of games).

Classic games won’t draw audiences on par with a live broadcast, but some fans –particularly those without access to other sports content– will watch.

FAST is not going to be able to help rights owners in transition (think: those leaving RSN ecosystem) bridge the revenue gap in any meaningful way, at least not in the next half decade.

However, the most watched FAST channels on each platform can earn millions of dollars annually. The rights owner tends to retain ~50-55% of the advertising revenues generated.

And FAST channels can be easily distributed across multiple platforms, so a potential multiplier effect exists too.

“It depends on the media mix and what kind of rights and promotion [the platforms] put on [the channel],” Coyle said. “But [total revenues] could be tens of millions over time.”

In the short-term, FAST represents a low-risk, incremental revenue opportunity for rights owners placing archived content on their channel (see: NHRA).

The upside potential can be even greater for properties willing to park live rights on a FAST channel as an alternative to a promotion-owned website.

Logic indicates a correlation exists between how compelling the content is and audience size. Discovery aids also plays a critical role in digital video consumption (think: event promotion, a ‘sports zone’).

But it seems unlikely that a property capable of commanding large, guaranteed fees –and eyeballs– from established platforms will be the first to test that theory. Leagues further down the value chain are more apt to take a chance on the emerging distribution platform, particularly when they realize the alternative.

“People have seen it takes a lot of time, skill, dedication and money to drive a [DTC] platform and get people to come watch it,” Coyle said.

By contrast, many of these FAST platforms are already at scale.

And “some have put together good [consumer viewing] experiences creating a great opportunity to partner [and] get a free product into the hands of fans,” Coyle said.

In theory, rights owners may be able to use FAST channels to cross or upsell viewers (think: subscription to a D2C streaming service, season tickets). Though, it remains to be seen how effective those efforts will be.

Coyle acknowledges FAST platforms will have to prove there are ways for rights owners to monetize content beyond advertising for higher profile properties to move their live rights there.

“If we want to get serious about rights, we need to make the platform capable of driving revenues other than just sponsorship,” he said.

But the digital media executive is convinced that time is coming.

“We could see FAST [as an addition] to an overall [media distribution] strategy in the next 12 months. Not the primary strategy, necessarily, but a key component,” Coyle said.

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