Free, ad-supported streaming TV services — aka FASTs — are streaming’s new favorite offspring, with Warner Bros. Discovery having just declared itself to be the latest major player incubating an entry.
For big entertainment companies, FASTs represent not only added revenue from conventional short-form ads, but marketing vehicles for driving paid customers for their subscription video-on-demand (SVOD) streamers, theatrical releases and other offerings.
But in addition, the nature of the FAST business model and the flexibility possible in a still-evolving platform already has some large and smaller players offering ways to help brands create custom-made short- and long-form content experiences.
Roku — whose Roku Channel is one of the top five FASTs in the U.S., according to One Touch Intelligence — certainly sees a big opportunity in branded content.
Roku created its own brand studio in April 2021 by acquiring Funny or Die’s branded content business and merging it with Roku’s sponsorship and brand experience business.
Roku touted success with its very first studio customer, Maker’s Mark. A six-episode interview series created with the bourbon brand, “The Show Next Door,” distributed on The Roku Channel and social media channels, drove 57 million press impressions and more than108,000 Funny or Die video views, according to Roku. The show reached No. 7 among comedy shows on the Roku Channel, and 56% of viewers said they would like to watch a second season.
This May, leading into the upfronts, Roku announced new branded content offerings, including a partnership with Reese Witherspoon’s Hello Sunshine to integrate brands into 12 short-form films.
Roku uses data from its huge user base to glean consumer preferences that are used to help develop branded content and hone targeting.
Also in May, FAST Crackle Plus formed a branded content studio, backed by its TV production division, Chicken Soup for the Soul Television Group.
Some FASTs are already offering seasonal or permanent sponsorships of entire channels.
But creating whole channels for specific brands is a considerably bigger leap.
As CTV analyst and TVREV co-founder Alan Wolk points out in a new report on FASTs, the core concept — e.g., a lawn-care brand creating a gardening channel — makes perfect sense on paper.
But there are two fairly daunting challenges.
One is that creating an entire channel that’s interesting is not only not cheap; it’s a lot harder than it looks.
To create a significant amount of compelling content on an ongoing basis, brands have to trust professionals with mainstream content creation experience and restrain their gut impulses to go overboard with brand presence, notes Wolk. (“I’m paying for this — why isn’t my product front and center?”)
Branded content is “a riskier proposition than running an ad, because with an ad you are paying to have people watch it—but if your branded content is not compelling, then no one is going to watch it,” echoes Raghu Kodige, co-founder and CEO, LG Ads Solutions.
“Many well-intentioned efforts have failed to draw an audience,” Wolk observes — although that doesn’t mean it can’t be done. “Think of ‘Mutual of Omaha’s Wild Kingdom,’ only as a full-on channel, and you can see how it could succeed.”
The other challenge is the pricing model: establishing how to fairly determine the value of the ad revenue a FAST service would make on a branded channel, given that all ads are for a single brand and the brand is paying to produce the content, Wolk says.
“Again, not impossible to sort out, but definitely another hurdle,” he writes.
Still, he believes that the sponsored-show model of early television, which conveyed unambiguously and repeatedly that viewers were “getting to watch this wonderful show for free in exchange for hearing a sales pitch from the sponsor,” is worth bringing back.
And that the FAST model, which stands to benefit from an easy way to add already-paid-for content, will lend itself to the launch of “a number” of sponsored-content channels.