Breaking down FAST business models

FAST channels are a growing and quick-changing landscape, but strategies for success are starting to take shape. Kidscreen gets you up to speed on the details.
May 4, 2023

The emergence of FAST channels and platforms around the world, and particularly in North America, was one of the major stories in content distribution last year. Experts say the trend is likely to maintain momentum in 2023 for several reasons, including household subscription fatigue, connected TV sales, a bursting global inventory of content for sale, and a very low barrier of entry to consumers and operators alike.

The appeal of a more passive viewing experience that’s reminiscent of the old days of linear TV—as opposed to the “tyranny of choice” that defines AVOD and streaming platforms—is substantial, according to Katrina Kowalski, VP of content for Paramount+ and Pluto TV Canada (pictured).

She says the successful and high-profile launch of FAST channel platform Pluto TV in Canada at the end of 2022 is illustrative of the market’s growth worldwide. “All signs point to consumers really embracing the product, owing to the economic times we find ourselves in.”

Pluto TV’s Canadian FAST platform launched on December 1 with 117 channels, including 10 kidsnets featuring blue-chip IPs such as Dora the Explorer and Teenage Mutant Ninja Turtles. One only need look at some topline revenue numbers industry-wide to see why content and technology companies are jumping on board to introduce new FAST channel options into the market.

Global ad revenue for FAST channels in 2021 was US$2.4 billion, according to Tim Westcott, senior principal analyst for digital content channels at UK-based research firm Omdia. That number nearly doubled to US$4.4 billion in 2022, with the US alone accounting for US$3.9 billion. America is clearly the most robust FAST channel market so far, but the rest of the world is expected to start catching up in the coming quarters as broadband access and connected TV sales outside of the US continue to expand.

The right model

Two different business models have emerged in the early days of FAST. “Overall, the most common model seems to be revenue-sharing,” says Westcott. “So if you operate a channel, the platform is going to sell the advertising for you.

“The second most popular model, he says, is inventory-sharing, where both the channel and platform operators sell ad space and split the profits. Revenue-sharing is currently emerging as the predominant approach, with some obvious benefits for both channel owners and platforms. Roku and Pluto TV have both adopted this model, leveraging the efficiencies of the platforms’ sales force to deliver ad revenue—a skillset many IP owners lack.

Revenue-sharing also gives IP owners a look under the hood of the platforms’ analytics, which can reveal valuable information about how their content is being consumed. This stands in stark contrast to the traditional reluctance of streaming platforms to share deep analytics.

“We have an external dashboard for all of our partners,” says Ashley Hovey, senior director for AVOD at The Roku Channel. “Our partners can log in and see 16 different data-points. If they are scheduling their own channel, they need that insight.”

Summer Memories

New series like Summer Memories, distributed by WildBrain, often find second lives on FAST channels.

Soft ad sales

The success of fusing the right content strategy with viable ad sales will be the main factor in determining how big a role FAST eventually plays in the kids content marketplace. Right now, the challenge is that advertising dollars are harder to secure in the kids space than in other content categories. Even with the reduced ad load for kids (across most platforms, this comes in at around six to eight minutes an hour—less than for other types of content), there’s still a hill to climb in terms of selling this inventory. “There is a bit of smoke and mirrors around ad sales in kids,” says Paul Coster, founder and CEO of UK-based VOD365, which owns FAST channel Ketchup TV.  “A lot of platforms are onboarding kids content, but when it comes to monetization, it is a much more challenging scenario.”

Advertising around kids programming has both content and privacy restrictions, limiting the use of automated (also called programmatic) ad sales, which are driving FAST’s revenue growth in other genres.

“Even if there are five to eight minutes of ads per hour, [platforms] are probably only filling half of that in terms of real ads being served on the channel,” estimates Lara Ilie, VP of revenue share and transactional at Canada’s WildBrain. “That is the reality of where the kids monetization is today.” (Pictured at top is Wildbrain’s Summer Memories.)

For this reason, some content owners prefer to handle their own ad sales, as Ketchup TV does. But that limits a channel’s exposure. “Some platforms won’t entertain the idea of you doing the monetization of your own inventory,” says Costner. “That leaves your destiny in their hands, and if they aren’t filling the inventory, that is really a concerning point.”

Because of this ad crunch, Paul Robinson, managing director of Kartoon Channel! at Genius Brands International, calls FAST channels for kids a “break-even proposition” at the moment. But he remains optimistic that a brighter future is ahead. “No one is paying a fortune for FAST rights in kids right now,” he says, “but if the advertising really takes off, that will be revised.”

Fast’s future

With kids ad revenue still finding its footing, the key in the meantime might be to leverage FAST channels to build IP awareness, which can then produce revenue across other verticals like licensing and merchandising. However, there is optimism that kids FAST channels themselves will soon be in the black.

“At first, the channels are going for the easy revenue, and that is in non-kids,” says WildBrain’s Ilie. “But in time, they will be able to fine-tune their approach, and those ad dollars will come.”

The way digital ad spend is generally structured might also be a source of optimism for platforms and channels looking to monetize their kids inventory. In some cases, digital spend is locked in up to 12 months in advance. This means that advertisers who are considering relocating their ad spend to growing kids FAST channels might still be waiting to invest.

“It’s about how quickly those dollars move from typical traditional digital spend with the likes of Google and Facebook over to the world of FAST,” says Costner. “That is holding things up right now.”

Perhaps the most promising factor is just how much potential ad spend might pivot over time as FAST channels continue to attract more viewers. While multi-billion-dollar ad revenues are impressive, analyst Westcott says there’s still lots of room to grow.

“In the context of the overall television advertising market, [the FAST dollars] right now are not that big at all,” he says, adding that some estimates of the overall digital ad spend could be upwards of US$350 billion by 2024. “[FAST] is still a small percentage of the billions that get spent on ads.”

This story originally appeared in Kidscreen‘s April/May 2023 magazine. 

About The Author
Gary Rusak is a freelance writer based in Toronto. He has covered the kids entertainment industry for the last decade with a special interest in licensing, retail and consumer products. You can reach him at



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