Smaller, Independent Ad Supported Streamers Form A Consortium

The streaming video industry has been led by large media companies. During last month’s upfront presentations, media conglomerates spent a significant amount of their time hawking the advertising capabilities of Max, Peacock and Hulu among others. Also, in the past year, Netflix
NFLX
and Disney+ launched an ad supported at a lower monthly subscription fee. With large parent companies, subscription based streaming providers have touted their critically acclaimed original programming (including live sports), as well as their increase in subscriber counts and audience growth. Furthermore, media companies have been promoting their advertising capabilities as a look for revenue growth.

Along with subscription-based ad supported streaming is FAST (free ad supported television). FAST, a term coined by Alan Wolk, distinguishes between subscription-based ad supported tiers on Peacock, Disney+, etc., with free ad-supported TV services. The largest FAST providers come from big media companies including the Paramount owned Pluto TV, the Fox
FOXA
owned Tubi and The Roku Channel among several others. More large media companies are expected to launch a FAST initiative in the near future including Warner Bros. Discovery and Disney.

FAST providers have been grabbing the attention of Madison Avenue and users. The Roku Channel, Tubi and Pluto TV all generated over $1 billion in ad revenue last year. Pluto TV has over 80 million monthly active users, compared to 12 million in 2019. Tubi now has over 60 million monthly active users compared to 25 million in 2020. Also, The Roku Channel has over 65 million active monthly users. FAST has also evolved into an important revenue component with corporate quarterly earnings reports. Fox acquired Tubi for $440 million in March 2020 and recently turned down an offer for $2 billion. As cord-cutting continues, free FAST channels provide viewers with an extensive and inexpensive programming alternative.

Overall, ad supported streaming platforms have been on the rise. Nielsen reported in March 2023, Pluto, Tubi, and Roku combined for 2.7% share of all video viewing, while relatively small, it does represent a 53% increase from one year prior. Ad revenue from FAST is projected to total $6 billion by 2025.

Despite being led by a few larger companies, there are also hundreds of smaller independent FAST opportunities for viewers and advertisers. These smaller companies are now combining their assets. In a recent press release, a number of smaller FAST companies launched The Independent Streaming Alliance (ISA). The founding members of the ISA include; the Allen Media Group, Chicken Soup for the Soul Entertainment, Cineverse, Future Today, kweliTV, Revry, Scripps, Tastemade, TMB (Trusted Media Brands), and Vevo. Collectively, ISA members have 2,220 independent streaming touchpoints, which generate more than half a billion hours of watch time each month.

In a statement, Philippe Guelton, Chief Revenue Officer at Chicken Soup for the Soul Entertainment noted, “The formation of the ISA is long overdue. We are joining forces to promote the value of independent streamers, and to work hand-in-hand with platforms, advertisers, and regulatory bodies to ensure that we have a healthy ecosystem that benefits everyone, not just the few.”

Among ISA’s stated goals will be highlighting minority owned businesses including, among their charter members, the Allen Media Group, Future Today, and kweliTV. In addition, the group will promote diverse programming. Damian Pelliccione, co-founder and CEO at Revry, added, “The FAST space has been an exciting and important outlet for diverse and underrepresented communities over the past few years. The ISA is the industry support required for a global LGBTQ-first streaming media network like ours to continue to provide free ad supported TV for many years to come.”

Initially, the ISA will start with three working groups to help promote and grow the consortium; measurement, distribution, and demand.

· For measurement, ISA will work with iSpot.tv as an audience and ad measurement provider, to measure the unique reach of members. Besides streaming, iSpot will be used for the cross-platform measurement capabilities.

· The distribution group will collaboratively focus on sharing best practices for growing viewership.

· The demand group will work with ad agencies, marketers and programmatic software (SSP’s and DSP’s) to facilitate the buying and selling of advertising inventory.

Evan Bregman, General Manager, Streaming at Tastemade concludes, “The ISA is an opportunity to level up our ecosystem by defining standards and best practices that will benefit consumers, advertisers, and programmers alike.”

The ISA will be promoting their capabilities at a number of industry events in the weeks and months ahead.