The Evolution and Expansion of Streaming Platforms: A Deep Dive into the FAST Space, Retail Media Networks, and Connected TV
In recent years, the landscape of digital media has undergone a seismic shift. The rise of Free Ad-Supported Streaming TV (FAST) channels, retail media networks (RMNs), and connected TV (CTV) platforms has fundamentally altered how content is consumed and monetized. One of the new players making waves in the FAST space is VideoElephant. Leveraging its extensive experience in online video content licensing, the Dublin-based company has successfully launched its own FAST channels while helping others monetize theirs. Their latest venture, Real Crime Uncovered, marks their third owned and operated channel on the TCLTV+ service in North America. This true crime channel joins their other offerings, Beyond Paranormal and Travel Escapes, signaling a strategic move to capitalize on niche genres that attract dedicated viewership.
VideoElephant’s expansion is far from over. The company plans to launch three or four more owned and operated channels within the next six to nine months. This aggressive growth strategy is backed by data and market trends that indicate significant viewer interest in specific genres like true crime. Catherine Zhang, VP of TCLTV+, expressed excitement about adding the popular true crime genre to their growing lineup. In an interview with StreamTV Insider, VideoElephant’s Chief Commercial Officer highlighted the remarkable growth in viewership for crime-related content, emphasizing that this genre has become a cornerstone of their programming strategy.
The distribution network for VideoElephant’s channels is robust, spanning multiple FAST platforms such as Sling, Plex, LocalNow, TCLTV+, and Vidaa. Since launching their first two channels in 2023, VideoElephant has reported double-digit increases in monthly hours of viewing (HOVs). This success underscores the company’s ability to not only produce compelling content but also effectively distribute it across various platforms. In the fast-paced world of FAST, VideoElephant aims to be a central point for content, distribution, and monetization, helping smaller content owners navigate the fragmented landscape of streaming services.
The rise of connected TV and the increasing comfort level of viewers with free ad-supported streaming have created a fertile ground for companies like VideoElephant. Recent research indicates that 66% of TV viewers use FAST platforms every month, with popular options including Tubi, Pluto TV, and YouTube. VideoElephant, founded in 2012, has built a legacy in licensing and distributing short-form online video content, amassing a library of 5 million assets. This extensive library has primarily served publishers who embed VideoElephant’s content in their articles, generating incremental revenue for content creators.
As streaming and connected screens become more prevalent, VideoElephant has seized opportunities to leverage its relationships with content owners and web publishers. The company now counts digital signage and the FAST space as major distribution points. Initially, their FAST channels were little more than glorified playlists of short-form content. However, the focus has since shifted to quality and catering to niche genres, reflecting a more sophisticated approach to content curation and distribution. VideoElephant also offers services for those looking to enter or improve their presence in the FAST space, providing content aggregation, distribution, and monetization solutions for smaller content owners.
The retail media network (RMN) landscape is another area undergoing rapid transformation. Advertisers are increasingly interested in key RMNs like Walgreens and Walmart for 2024. Brandweek, a marketing event scheduled for September 23-26, will feature industry leaders discussing the latest innovations in this space. Over the past decade, Amazon has dominated the retail media market. However, other retailers, particularly in the grocery and specialty markets, are challenging Amazon’s supremacy. EMarketer predicts that US retail media ad spending will reach $54 billion this year, spread across over 200 retail media networks.
Adweek has compiled a list of the most important RMNs for advertisers to know in 2024. This list includes networks like Albertsons Performance Media, which leverages first-party data to target ads to shoppers, and Criteo, which uses artificial intelligence to deliver personalized ads. CVS Media Exchange, Target’s Roundel, and Walgreens Advertising Group are also notable mentions. These networks utilize data from loyalty programs and other sources to offer targeted advertising options. Walmart Connect, formerly known as Walmart Media Group, and The Home Depot Media Group are leveraging in-store and online purchase data to enhance their advertising capabilities.
Instacart Ads and Kroger Precision Marketing are other significant players in the RMN landscape, focusing on targeting online grocery shoppers. The diversity and growth of these networks highlight the evolving nature of the advertising landscape, which is constantly adapting to new trends and challenges. The integration of advanced technologies like artificial intelligence and data analytics is enabling more precise and effective targeting, making RMNs an increasingly attractive option for advertisers.
Roku’s recent Q3 results further illustrate the dynamic nature of the digital media landscape. The company reported 20% revenue growth and an increase in active accounts, driven by strong performance in content distribution, video advertising, and sales of their new Roku-branded smart TVs. Roku’s smart TV sales, which became available at Best Buy in March, contributed to a 33% year-over-year growth in device revenue. In the US, Roku TV sales outpaced the industry, and the Roku OS remained the best-selling TV platform. Platform revenue, which includes digital advertising sales and content distribution, grew by 18% to $787 million in Q3.
Despite challenges in the US ad market, Roku saw a solid rebound in video ads, with year-over-year growth outperforming the overall ad market and linear TV ad market. The company remains cautious due to uneven ad recovery in different categories. While sectors like CPG and health and wellness are growing, others like financial services and insurance are slower to recover. Roku credits its advertising traction to the diversification of advertiser demand sources and expanding partnerships, with over 30 programmatic partners now integrated.
Roku’s partnership with Spotify, its first TV streaming partner to introduce video ads on Roku devices, has also contributed to advertiser growth. Advertisers like Walmart have utilized Roku city integrations and shoppable ads on the platform. According to Beachfront, Roku accounts for nearly 40% of CTV ad impressions. In Q3, Roku added 2.3 million net active accounts, bringing the total to 75.8 million, and reached 26.7 billion streaming hours, surpassing 100 billion on a trailing 12-month basis for the first time. The company’s user experience, including personalized recommendations and a user-friendly interface, has helped drive engagement on the platform.
In Q3, streaming hours from Roku’s home screen menu grew over 90% year-over-year. The company debuted new platform features, including favoriting for users to track their favorite sports teams and streamlining browsing in the live TV section to personalize the streaming experience. Roku’s free, ad-supported streaming TV service, The Roku Channel, remains a top-five app on the platform for both reach and engagement, with streaming hours up over 50% year-over-year. The Roku Channel captured over 1% of all TV streaming in September, according to Nielsen’s The Gauge.
As the market for connected TV continues to grow, mid-sized media companies are finding linear channels on third-party streaming services to be a gateway to the connected TV market. Unlike media giants such as Disney, NBCUniversal, and WarnerMedia, mid-sized companies face challenges in attracting large audiences to their owned-and-operated apps. To establish a presence on connected TV, these companies are turning to 24/7 streaming channels on free, ad-supported services. These linear channels can generate immediate revenue while building an audience for their own apps in the long run.
Newsy CEO Blake Sabatinelli sees this as an opportunity to reach more viewers and effectively monetize their content. As more distributors like Roku, LG, Samsung, and Vizio enter the fray with their own ad-supported services, publishers are finding more avenues to distribute their linear channels. Being featured on a platform-owned service can help with discovery, as these platforms have already established a large audience base. This is where Wurl, a video technology company, comes in, powering channels for various publishers. Distributing content on third-party services can be seen as a necessity rather than a choice, as these services have the upper hand in terms of attracting viewers.