The State of European FAST
This is a guest column by the founder and managing director of the Local Act, a consultancy to help SVOD, AVOD and FAST streaming services launch and grow in Europe, hassle free.
The U.S. market is always the one the rest of the world looks up to when it comes to media and entertainment business innovation. The same way SVOD emerged with an American pure player — Netflix — so did FAST, with Pluto TV back in 2014.
Over the past three years, the U.S. FAST market has grown on all fronts (revenues, channel count and FAST providers operating in the space), as detailed at length in Variety Intelligence Platform’s “Life in the FAST Lane” report.
Did Europe stand still and witness this new revolution from afar?
Far from it. We took notice of the trend, observed and went for it, too. As of October 2022, FAST platforms like LG, Samsung, Pluto TV or Rakuten TV were offering between 45 and 140 FAST channels each in EU5 markets (France, U.K., Germany, Italy and Spain).
Currently, European FAST services are nowhere near the scale of U.S. services offering over 200 or even more than 300 channels. FAST is buzzing in Europe though not booming yet. But MIPCOM 2022 definitely felt that buzz. From the conference and workshop line up to the meetings and launch announcements, FAST was the hot topic of this year’s edition.
Now taking a closer look at the European FAST space, several public and commercial broadcasters have launched their FAST channels in the last 12 months.
BBC debuted in France, Italy, Germany and Spain four FAST channels on Samsung in October 2021: “BBC Food,” “BBC Travel,” “BBC History,” “BBC Drama” and a “Doctor Who” channel, several of which are also available in the U.S. In the U.K., the channels are available only via BBC iPlayer, suggesting that in its local market, FAST channels serve the wider linear and on-demand business of the BBC.
ITV also ventured with the launch of two FAST Channels (“Hell’s Kitchen” and the drama-oriented channel “Storyland”) on Samsung in the U.K., Germany and Italy, with more countries to follow. They went one step further with the recent launch of ITVX, where they integrated 15+ owned-and-operated FAST channels (including “Real Housewives U.K.,” “Vera,” “Love Island,” “Classic Movies” and “Xmas Movies”).
TF1 (a leading French commercial broadcaster) launched the dedicated section “Stream” in its live and replay MyTF1 application, where you can find 44 FAST channels that are genre-led (anime, fitness, thriller, romance) or IP led (“Naruto”, “Danse avec les stars,” “Hartley cœurs à vif”).
Finally, Spain public-service broadcaster RTVE struck a deal with Samsung TV Plus Spain to distribute its five existing linear broadcast channels, a sign that you can get into FAST with your existing portfolio of TV channels.
In the audiovisual space, companies with a global footprint were ahead of the game and launched in the U.S. before even entering their own region (i.e, “Euronews,” “Insight TV,” “Clubbing TV,” “Qwest,” “Xite” and “Chefclub”). We now see more and more premium European brands venturing into the space with the recent examples of Endemol launching two channels, “Secret Story” and “Master Chef,” on Samsung and Pluto TV.
As for the media space, two major newspapers recently launched their own channels: The Guardian and Le Figaro. Given the demand for trustworthy news content, this is a great 1st-mover initiative from these two newspapers. It makes sense to capitalize on their video library and potentially reach new audiences who are not in the habit of reading newspapers.
Finally, four signs that the market is a priority for FAST platforms in Europe:
1. The market expansion of Pluto TV (in France, Spain and Italy in February 2021, in May 2022 in the Nordics)
2. Exclusive distribution deals making an appearance (“American Idol” exclusively on Samsung)
3. Samsung Germany building its owned-and-operated FAST channels (“Cinemix,” “Wilder Planet,” “Mystery Krimi” and “Terra X,” a major documentary brand from ZDF Enterprise).
4. Virtual MVPDs like Molotov TV or Zattoo or pay TV providers including Netgem TV creating a FAST channel hub.
As of today, only a handful of FAST platforms are live in EU5 markets, though: Samsung TV Plus, Rakuten TV, Pluto TV, Rlaxx TV, Sports Tribal, Plex, Waipu, LG Channels, Channelbox on Freeview and Mango from Molotov TV (owned by Fubo TV) are names that come to mind.
Samsung TV Plus, Pluto TV and newcomers like vMVPD Zattoo are described (in the absence of public data on the exact scale and revenues) by industry executives as market leaders in the region offering an interesting revenue stream for library content in FAST Channels.
But the number of platforms is simply too small to offer a substantial audience to FAST channel partners, at least for now. In addition, platforms (and European markets) are not equal when it comes to monetization. This makes content providers wary of the need to enter the space right away.
During a FAST event organized in Paris, a content producer asked the panelists, “How much can we expect to make from this?” No one ventured to answer with a definitive number, and rightfully so since there is not a one-size-fits-all opportunity (brand strength, content quality, target audience appealing to advertisers).
On top of the limited reach and monetization challenges, FAST encounters several headwinds in Europe. We indeed have an extensive free linear TV proposition (and its on-demand component) thanks to local broadcasters (including BBC, ITV, TF1, Atresmedia, RTL, RAI).
Viewers are still fond of watching linear TV, with linear representing over 200 minutes of daily viewing in four of the EU5 markets (Germany, Italy, Spain and France). In Spain, linear TV represented 77% of daily cross-viewing time in 2021, according to Omdia.
Free linear streaming as a value proposition therefore has more limited appeal than in the U.S., leading to traditional linear TV capturing over 95% of video advertising revenues, with minor growth expected by 2025.
In addition, FAST growth has been mostly fueled by the U.S. connected TV space and cord-cutters, with Comcast Advertising finding that 70% of Xumo FAST users are cord-cutters.
The Western European pay TV market has been more resilient. While the U.S. shed 2.8 million pay TV subscribers in 2021, Western Europe lost 1.4 million pay TV subscribers.
Simon Murray, Digital TV Research’s lead analyst, predicts Western Europe will lose 7 million pay TV subscribers between 2021 and 2027 to reach 100 million. He had, however, predicted the 100 million mark would be reached by 2025, a sign that decline slowed across the region.
To start seeing an acceleration of FAST adoption in the region, here are three trends to expect:
1. Pay TV providers and telecom Operators going into FAST. Ask SVOD services like Netflix how valuable their telecom partnerships are to their business. By way of example, 45% of Netflix French subscribers used their set-top box menu to access the service, according to Mediamétrie SVOD Barometer (+2% versus June 2021). FAST seems like a natural addition to the super-aggregation content offering from telecom operators, while giving FAST channel partners a solid incremental reach.
2. More regional players investing in launching their own FAST platforms and FAST channels to offer a more localized lineup.
3. The arrival of more international players to shake things up (Roku Channel, Tubi, Disney+ and Netflix, with AVOD tiers that could include FAST channels).
It’s still early days for FAST in Europe — one might argue it’s the U.S. in 2019 — but viewing habits are shifting to streaming on connected devices. In addition, the key demo of 18-34s is also turning away from linear TV, meaning savvy European content owners and service operators should already have plans for reaching them to not be left out when FAST takes off.
For questions and comments, Marion Ranchet can be reached at www.thelocalact.com/contact, linkedin.com/in/marionranchet and marionranchet.substack.com.
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