These fundamental infrastructure realities are is already changing how Free Ad-Supported Streaming TV (FAST) operators think about programming, production, and discovery. Here are practical lessons this reality is forcing FAST operators to address:

Discovery is still driven by people, platforms, and the guide

One of the most consistent drivers of viewership we’ve seen is still the simplest: When athletes tell their social followers to tune in, viewership spikes. Across every sport Swerve has worked with — from boxing and MMA to volleyball, basketball, and football — athlete promotion reliably moves audiences. In a crowded FAST environment, social influence remains a key discovery engine. Leagues and rights holders that understand how to activate athletes have a meaningful advantage.

Platform promotion matters too, and it often favors live events. Swerve streams more than 300 live events per year on average, and there’s tremendous opportunity for expansion in live events on FAST. But one of the more important realities we’ve observed is that live isn’t always the top performer. Across many types of sports, replays often outperform live events. A major reason is straightforward: Viewers are discovering content by browsing the on-screen guide. That behavior underscores the importance of detailed, accurate, informative metadata and the UI decisions that determine whether content is findable in the first place. FAST may be delivered through streaming, but discovery often functions like linear television: What’s visible wins.

Libraries and replays are doing more work than we expected

Because guide browsing is such a powerful driver, FAST can create unexpected opportunities for content that already exists. For new and existing leagues benefiting from investment and momentum right now, FAST provides another shot at reaching a wider audience, especially for rights holders with video libraries of competitions they haven’t showcased because they’ve had other priorities. Replays and libraries don’t just fill hours; they create more entry points for discovery, and more chances for viewers to stumble into a sport or league they didn’t know they’d care about. The fundamentals are there, but channels and rights holders need to package that depth in a way that supports browsing behavior.

Audience appetite is broader than legacy assumptions

With two quarters of data, we’re seeing clear patterns in what performs, while we continue to test and refine programming. Some of the results have been surprising. STIHL Timbersports events, featuring competitive wood-chopping with chainsaws and axes, defy geographic boundaries, with competitions from Benelux countries performing as well as competitions from the U.S. and Canada. Other top-performing standouts include Women’s Football Alliance and Athletes Unlimited basketball and volleyball.

The range of competitions that can perform well — from trampoline to poker to pool — also reflects research Swerve conducted in 2025 showing younger audiences’ willingness and interest in following more than a handful of sports. We’ve leaned into that insight through our partnership with Rebel Girls, launching a weekly family program featuring outstanding women athletes in a Saturday-morning time slot. The point isn’t that every niche will break out. It’s that FAST audiences appear more open than many operators assume. Channels that program with curiosity, consistency, and clear packaging can unlock demand that looks invisible in other distribution environments.

Production investment is a key threshold for success

Another key lesson for new and evolving sports leagues is the importance of production. This is true for long-form live matches, but it’s also true (and increasingly urgent) for short-form video, particularly for anyone trying to capture attention among younger audiences. For newer and smaller leagues seeking to build fandom, production can make or break their ability to develop relationships with fans who are used to established norms.

Production investment also allows rights holders to control their IP, which matters for developing leagues where image and storytelling are inseparable from growth. Not every league has the financial capability to shoot with more than one camera, and some struggle to finance production for an entire season. But technology can help: from AI captioning to cloud production, newer, lower-cost tools have lowered the barrier to entry. What hasn’t changed is the underlying reality that production quality shapes trust and trust shapes retention.

Infrastructure is a barrier to FAST growth

FAST is in a convergence moment, with platform growth, live content appetite, and expanding libraries colliding with a persistent lack of standardization and robust infrastructure. Tracking analytics across different platforms remains challenging. The lack of third-party metrics is maddening. And the industry’s unwillingness to agree to and adhere to common standards creates friction for creators, platforms, and audiences alike.

The live events and libraries are there. The athletes are there. The audience appetite is there. What we’ve learned so far is that the constraint is less about supply and more about infrastructure: standardization, data sharing, and discoverability. FAST’s next phase of growth will depend on whether those systems evolve fast enough to match the pace of the market.

Putting Swerve’s FAST lessons Into practice

Swerve’s early experience on FAST has reinforced that growth alone isn’t the differentiator. Planning full seasons, pairing live events with replays, and making content easy to find has mattered as much as launching more programming. As FAST continues to scale, the operators who win will be those who understand that programming, production, and discovery function as one system and build accordingly.

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From traditional TV to streaming

As cord-cutting and “cord-never” populations continue to grow, the number of viewers who rely solely on traditional pay-TV services is dwindling. According to Hub’s findings, more than twice as many viewers use both traditional pay-TV and streaming platforms rather than just one type. Audiences find that streaming platforms offer more options and flexibility than traditional TV. Deloitte’s Digital Media Trends report echoes this, noting that many consumers find streaming services more aligned with their viewing needs. They prioritize content that matches their schedules rather than set broadcast times.

Viewers’ SVOD stack

Viewers’ video-on-demand (SVOD) “stacks” are getting larger, with many people subscribing to at least three different services. The report shows that the percentage of consumers using three or more SVODs more than doubled since 2020, illustrating the growth of multi-platform use. This expansion is partially due to the massive libraries each SVOD offers; for instance, Netflix, Hulu, and Disney+ have extensive catalogs covering different genres and audience segments.

Yet, while viewers may stack multiple services, only a few platforms become their “default.” Netflix leads this default category, with 26% of respondents choosing it first. This trend toward Netflix as the initial go-to aligns with its status as a pioneering platform with an established reputation for both quantity and quality of content. Hulu and Amazon Prime Video follow while Disney+ and Max (formerly HBO Max) fall slightly behind.

Online streaming is the new “home base”

Hub’s findings underscore that, for most viewers, the default experience of “turning on the TV” starts with online streaming. About one-third of viewers say they now go directly to a built-in smart TV app, showing a 50% increase in usage since 2021.

The appeal of smart TV apps lies in their convenience. They provide immediate access to various streaming platforms without additional hardware. The transition to smart TV apps represents a natural evolution of how viewers experience TV.

Research from the Leichtman Research aligns with this trend, finding that 87% of U.S. households own a device connecting their TV to the internet, from smart TVs to streaming media players. This widespread connectivity facilitates using apps like Netflix, Hulu, and Prime Video, solidifying them as the primary sources of TV content.

SVOD loyalty driven by “favorite shows”

Hub’s report highlights a crucial driver of platform loyalty—exclusive content. When viewers have a specific favorite show exclusive to a particular SVOD, they’re more likely to remain loyal to that platform. This “stickiness” effect is essential in a crowded market where content variety can make or break viewer retention.

On the other hand, traditional MVPDs still hold an edge on live TV, particularly for sports and news. These content categories remain strongholds for pay-TV providers, appealing to a demographic that values real-time events. However, this loyalty is eroding. The report notes that nearly a quarter of MVPD users would consider canceling their service if forced to choose between platforms.

The growth of FAST

FAST services are also becoming a mainstay for many viewers, especially those who prioritize content variety over exclusivity. FAST platforms appeal to cost-conscious consumers who prefer a broad selection of programming without additional monthly costs. Their rise complements subscription streaming by offering a fallback for when paid services are unavailable or too costly.

FAST providers such as Pluto TV and Tubi are gaining traction as they offer a unique blend of on-demand and live content with a more traditional TV-like feel. According to a survey from eMarketer, over half of U.S. adults now use FAST services. For these viewers, the trade-off of ads in exchange for free content is more appealing than paying for an additional SVOD, further underscoring the complexity of the modern TV ecosystem.

Will MVPDs adapt?

The rapid decline of MVPD set-top boxes poses an existential challenge to pay-TV providers, who now face pressure to innovate or risk further market loss. Some MVPDs are pivoting to streaming bundles or hybrid solutions to capture traditional and digital audiences. However, Hub’s report suggests these changes may be too late. As smart TV apps and streaming services become the “default” choice for viewing, MVPDs could be relegated to a niche role unless they compete with streaming platforms on convenience, affordability, and exclusive content.

As more people rely on streaming services and smart TVs, the influence of traditional MVPDs is waning. Netflix’s leading SVOD “default” position reflects its early mover advantage and vast content library. Meanwhile, traditional TV’s staples—live news and sports—feel less essential as viewers increasingly favor on-demand content.

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In today’s dynamic world of streaming, the onus is on media players to understand not only how audiences perceive the ad, but also react to the ad breaks that surround and often interrupt their programs. Media owners must provide quality viewing experiences for consumers while creating a fertile ground for brand messages.

To this end, I outlined in a previous article that for all parties to benefit, ads should add to the viewer experience – not detract from it. In this follow-up piece, I will explore the factors that cause low-quality ad experiences and explain how content owners and distributors can avoid them. 

The importance of quality ad experiences 

Content of all types, from blockbuster movies to live sports, drama to documentaries, is increasingly being consumed and distributed via streaming platforms. This is largely a direct response to the evolution of consumer habits, with audiences satiating their huge appetite for premium video content across multiple connected devices. 

While subscription video-on-demand (SVOD) streaming services have proved popular, it’s currently the ad-supported tiers that are really capturing the attention of viewers. According to EMARKETER projections, free ad-supported streaming TV (FAST) sign-ups are increasing in the US, while the picture in the UK is equally promising for FAST, where Digital TV Research showed a 30% increase in viewership in 2023. 

Media owners need to be conscious of protecting the viewer experience in their ad-supported tiers, which includes the advertising experience. Platforms also want to create an environment that enables a premium and effective ad experience for advertisers. The generalist assumption that viewers don’t like ads but reluctantly put up with them to access content for free isn’t borne out by the data. FreeWheel Viewers Experience Lab’s report, Improving the Quality of Ad Experiences, shows that it’s not ads that bother viewers, but low-quality ad experiences.  

Seeking seamless viewing 

Audiences are receptive to the idea of a value exchange, involving watching ads to access quality content for free. With the increasing cost of living affecting European and UK consumers in recent years, many have been cutting down on subscription-based services and are looking for alternatives that offer better value. 

Moreover, the FreeWheel study shows that ads don’t impact the level of enjoyment of video content. In fact, a well-designed ad break, with frequency capping and length consistency settings, can give viewers a welcome rest and curb negative emotions, while improving cognitive attention and brand impact. 

It is the poor ad experiences that are frustrating for audiences. Data shows that 78% of consumers are bothered by slow-loading or buffering ads, while 71% are upset by ad breaks that unnaturally interrupt the content. One-third were also bothered by seeing a blank screen or screensaver in place of an ad. 

There are three areas that need careful attention in order to mitigate these issues: 

1. Latency 

Latency occurs when ad loading time is delayed by ad decisioning not happening quickly enough. The result is slow-loading or buffering ads, and these can be particularly disruptive for live streaming events, when the process of ad decisioning becomes more complex. 

Viewers in FreeWheel’s study rated programming that suffered from latency issues lower than programming that was not affected by latency. This sentiment was carried over into viewer perception of the ads themselves; latency has a direct impact on how a brand is perceived. 

Brands that want to avoid dented consumer perception from latency issues should look to suppliers that have technology in place that can optimize video delivery, ensuring delays are minimized. This could involve using ad servers located geographically closer to the end user. It might also mean buying directly from preferred partners to maximize efficiency in the supply chain; and ensuring partners have unified decisioning capabilities across all demand to enable faster ad decisioning. 

2. Disruption 

Poorly-timed or disruptive ad breaks can harm brand recall, according to FreeWheel’s study. Introducing ads in the middle of a scene, for example, will upset the natural flow of the programming. Respondents said that ad breaks were 16% more intrusive when they appeared at unexpected moments; they were also 14% less likely to remember the ads they saw during a disruptive ad break.  

Marketers will need to consider taking steps to mitigate any potential negative impact on their brands arising from this issue. One way to do so is by prioritizing publishers that use innovative and advanced technologies for advertising management, which can intelligently place ad breaks within content. 

3. Slate 

A slate or blank screen can appear when an ad call is made and the exchange doesn’t reply in time or provides an empty VAST (Video Ad Serving Template) response. According to our research, up to a quarter of ad avails are not filled on FAST channels, which all results in wasted inventory and frustrated viewers. 

FreeWheel’s data shows that consumers are more likely to have a positive physiological response to content when they don’t encounter slates. Using facial coding as a measure, viewers were 31% more likely to experience joy when watching a program with no slates. 

Brands should focus on supply path optimization and establishing direct connections to publishers and their inventory to limit potential slate issues. 

Additionally, from a publisher’s point of view, ad servers that utilize advanced auction capabilities, full pod bidding, and creative pre-approval processes, will help to limit latency and slate issues while improving fill rates.

Fixing the advertising experience is vital to drive streaming innovation

Buyers and sellers have to get to grips with how variations in the advertising experience can impact viewers and brand perception. With the increasing number of ad-supported tiers and growth in the volume of content available, prioritizing the viewer experience is key.  

Both brands and media owners have a role to play in this. Brands need certainty that the ad experience will be of the highest quality. Media owners must understand the factors that lead to sub-optimal ad experiences and how to fix them. In this multi-screen landscape, where consumer attention is scarce, it is paramount to come together to deliver an optimum experience that delivers the highest results. 

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Normalization of ad-supported TV

Economic pressures and budget constraints push viewers to seek more affordable entertainment options. Hub’s findings show that the percentage of consumers who express an aversion to ads fell from 17% three years ago to just 12% in June 2024. This decline in ad intolerance suggests that viewers are becoming more open to advertisements to reduce their overall entertainment expenses.

While viewers are becoming more accepting of ads, the presentation of the ads plays a crucial role in the quality of their overall viewing experience. Hub’s study underscores that the ad experience significantly impacts viewer satisfaction and engagement. The number and length of ad breaks influence how reasonable viewers find the ad experience.

Ad-supported video-on-demand (AVOD) platforms offer lighter ad loads and a more favorable overall ad experience than free ad-supported streaming TV (FAST) services and traditional multichannel subscriptions. Nearly eight in 10 viewers agree that there are “big differences” in the amount of advertising presented on competing TV services. This perception highlights the importance of managing ad loads to enhance viewer satisfaction.

Amazon prime video’s impact on the ad landscape

The introduction of ads on Amazon Prime Video has had a notable impact on the streaming landscape. Once a stronghold of ad-free content, Amazon Prime Video now includes ads by default. This change significantly reduces the proportion of viewers using ad-free streaming services to just three in five households.

Most Prime Video viewers now watch with ads. Only those who use Amazon as a hub for other subscriptions or consider Prime Video a primary benefit of their membership opt for the ad-free experience. This shift highlights ads’ growing acceptance among viewers and the influence of major streaming platforms in shaping consumer preferences.

Role of content in attention to ads

Interestingly, the type of content viewers watch also affects their attention to ads. Participatory genres like talk shows, game shows, competition series, and mystery programs keep viewers more engaged during ad breaks. Certain content types can be more conducive to maintaining viewer attention, even when interrupted by ads.

Opportunities for growth in ad-supported offerings

Despite the increasing acceptance of ad-supported streaming, there is still significant potential for growth in this area. The study reveals that many viewers remain unaware of ad-supported offerings on major streaming services such as Disney+, Paramount+, Max, and Discovery+. Additionally, a significant minority believe these services are strictly ad-free.

This gap in awareness presents an opportunity for streaming platforms to educate consumers about their ad-supported tiers. Targeted marketing messages aimed at budget-conscious non-subscribers could help drive growth in these offerings. Providing viewers with more affordable options and expanding the reach of ad-supported streaming appears to be a win-win scenario.

The report findings indicate a strong future for the streaming advertising marketplace. As consumers continue to embrace ad-supported streaming to save on subscription costs, the demand for well-executed ad experiences will grow. Streaming services offering reasonable ad loads and shorter breaks will likely see better viewer attention and engagement outcomes. Understanding and catering to viewer preferences is crucial as the streaming industry evolves.

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This sentiment underscores a growing trend toward prioritizing affordability without sacrificing the viewing experience. In addition, 62% prefer free, ad-supported streaming over paid subscriptions. New research, The Stream 2024, sponsored by Tubi, examines the streaming surge and reflects a fundamental shift in how people consume content. These days, convenience and flexibility take precedence over traditional television viewing.

Further, on-demand streaming services are the new norm in entertainment consumption. As households cut the cord to traditional cable subscriptions, streaming services are now integral to daily life for millions. From disrupting the sports-streaming landscape to championing representation and diversity in content, millennials and Gen Z are at the forefront of this cultural shift. However, as these demographics grapple with financial constraints, they are increasingly reevaluating their relationship with streaming services.

Viewers’ advertising preferences

Consumers viewing ad-supported streaming services ad preference:

• Like those on TV, standard ad breaks are strategically inserted at convenient plot point breaks within an episode or film (35%). They provide a fitting pause that harmonizes with the content’s flow. 
• Personalized ads that align with consumer interests and viewing journeys offer an enhanced experience. Most viewers (67%) prefer ads relevant to their streaming content, while 29% appreciate targeted ads tailored to their preferences.
• A notable 35% of audiences embrace quirky or unconventional ads for an added dose of enjoyment: Surprise and delight viewers with the unexpected.

Budget constraints and content preferences

While the attraction of streaming is undeniable, viewers are increasingly mindful of their spending habits. With subscription costs rivaling traditional pay TV services, price sensitivity is rising, particularly among younger audiences. Consequently, many are reassessing their streaming habits, with 27% admitting to using more services than they plan to in the future.

Moreover, viewers crave variety and fresh content. Their preferences lean towards a vast selection of shows and movies (69%) and new or original content (61%). As such, there is a growing demand for tailored content experiences that cater to diverse tastes and preferences.

Streaming adapts to evolving trends

This report suggests that ad-supported freemium models are poised to play a pivotal role in shaping the future of content consumption. By offering a blend of quality content and reasonable spending options, platforms can cater to consumers’ evolving needs while presenting compelling opportunities for marketers. Notably, the future of ad-supported services relies on a holistic viewer journey where ads amp up rather than interrupt the narrative.

Tubi’s research also suggests that integrating artificial intelligence (AI) holds immense promise in enhancing content discovery and personalization, addressing viewers’ dissatisfaction with current recommendation algorithms. As technology, tastes, and behaviors evolve, the onus is on streaming platforms to anticipate and adapt to shifting trends, delivering engaging narratives and seamless viewing experiences.

Streaming quality time and self-care

Streaming has taken on a role beyond entertainment, fostering a role in human connection and personal empowerment. For many, streaming represents an opportunity to bond with loved ones, with 71% of viewers citing it as a form of quality time spent with family or friends. Moreover, many view streaming is a form of self-care, with 68% of individuals leveraging it to carve out precious alone time in their hectic schedules.

The rise of on-demand streaming represents a paradigm shift in how audiences consume and engage with content. As streaming services continue to develop, understanding and adapting to evolving viewer preferences and market dynamics is essential for both platforms and marketers. Streaming platforms can shape meaningful connections with audiences by embracing innovation, diversity, and affordability.

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When we talk about television, what we mean by “TV” can vary dramatically, depending on geography, distribution service, device and – increasingly – the type of content being viewed. These variations are critical to understanding opportunities in this space. For the purposes of our discussion here, “TV” includes but is not limited to: 

• Over-the-air (OTA) broadcast channels
• Cable & satellite-delivered channel
• +s
• FAST channels
• SVOD services

All of the above may be accessed on mobile devices, laptops/desktops, and connected TVs. They are the primary (and most lucrative) content delivery formats for both traditional and new content creators and aggregators, who are most likely to be interested in our analysis. 

A key component of the challenges now faced by media companies is a false assumption that “one size fits all.” As we explore the strategic complexity of the streaming television market, compounded by the acceleration of AI integrations, taking a “one size fits all” approach is particularly risky.

Instead, each media company must clearly evaluate and understand its strengths and core competencies, and what these mean when moving in a new direction. In order to remain viable, it is imperative media players have the confidence to try new tactics. And, to truly innovate, they also need to get comfortable with the possibility of failure (as the tech industry has been).

The five key strategic questions

As they decide their next steps, media executives should be focused on five key long-term strategic questions:

1. How can you prepare your media business for success and survival in a rapidly-changing, highly competitive environment?
2. How can you attract and retain talent?
3. How can you serve your current customers and acquire new customers?
4. How can you grow revenue and profitability, sustainably?
5. And, finally, what exactly is your end goal?

Streaming lessons the United States and Europe can learn from each other

What we present below are six key – deliberately brief – lessons that U.S. and European media companies can learn from each other as they develop and evolve their offerings in the global streaming TV marketplace.

Lesson #1: Ask the right questions

The number one lesson that European media companies can learn from the U.S. is that many major media companies neglected to ask those five questions soon enough. That particularly seems the case when it comes to the last question: The strategies of most of the major U.S.-based streaming companies seem to lack a clearly defined end goal. But the good news is that it’s not too late. In fact, late movers have an opportunity to learn key lessons from the U.S. streaming market and thus serve viewers more effectively.

Lesson #2: Understand the market

One of the major mistakes that the mainly U.S.-based SVOD streaming services made (at least up to now) was the assumption that the world looked like the United States and would act the same way. A study of the history of the U.S. and European television markets would have made it clear that, when it came to paying for television, both markets had fundamentally different characteristics.

For example, Americans are used to paying $100 or more for their television, Europeans are not. Also, European pay-tv penetration has typically been 30 to 40% lower than the U.S. (even lower in some markets). Europeans prefer national language content and use free to air content more. When it comes to streaming, both sides need to first understand the structure of their markets and then work out what solutions work best.

Lesson #3: Media tech is a long-term investment

Technology has forever changed the game for media, and every player in the content value chain needs to become tech-savvy. This means continuously educating oneself – and one’s team – on new developments in technology. AI is a perfect example of a technology that has already impacted media (and will continue to do so). And yet, many major media players still think that AI is something for their tech department or even a new “Chief AI Officer” to manage rather than something about which they personally need to invest time learning and educating their entire teams about.

It’s imperative to everyone in a media company – senior or junior – to understand how mass market consumers connect using technology. For example, have they experimented with writing a ChatGPT or Midjourney prompt? Have they recently visited Walmart, Best Buy or Amazon to learn how most consumers purchase a TV, and thus come to have built-in, bundled access to their products? Do they have TikTok accounts? YouTube, Facebook, Instagram, Twitter, or even LinkedIn? And so on. Technology is a constantly evolving space, both in terms of innovation and consumer behavior. Staying connected to these changes will allow media leaders to make better short-term decisions and long-term investments in their business.

Lesson #4: Do what you do best

When faced with the dominance of Netflix, instead of doing what they did best, many U.S. media companies simply tried to do what Netflix did – but not as well. This approach hasn’t made a significant dent in Netflix’s market dominance, which is measured as present in two thirds of U.S. households, according to Kantar, with 49% in 2023 viewing it as their most important streaming service.

While this short-term strategy has floundered, the top U.S. media companies have a) strong, resilient brands, b) expertise in creating world-class content and content pipelines and c) the best deal-making skills Hollywood can teach. So, their potential remains strong. The same holds true for European media players. If you aren’t U.S.-based, don’t assume that your media company should follow the same strategies as the U.S.-based media giants. Nobody wants or expects your company to be the next Netflix. Instead, your company should be the next version of itself.

Lesson #5 – Don’t lose sight of the bigger picture

CEOs and corporate boards face a multitude of pressures when it comes to decision making. They must actually run their companies and navigate continually changing sectors and wider trends. And, in most cases, they must do so under the scrutiny of shareholders who have a multitude of short and long-term interests. What management must not do is panic.

For European companies, one area this particularly relates to is the treatment of linear television. There is no doubt that linear television faces challenges, yet European executives must also be wary of writing off the medium. While viewing for “traditional” television in the U.S. hovers just above 50%, linear television programs still dominate the schedules in virtually all major European countries. That reflects both the history of how television developed in these respective markets and the demographics involved. Linear can still be a powerful tool for advertisers in Europe in a way that is becoming increasingly challenged in the United States.

Lesson #6: Be humble

Media executives must not fall into the trap of thinking that, just because they view the world in a certain way, then that will be representative across the population of their market, much less the globe. That kind of thinking can lead to severe business consequences. It is good business sense to recognize you do not know everything and act accordingly. If there is one lesson that can be said to be applied equally across both Europe and the United States, it is this one.

The bottom line

The bottom line is that whether European or U.S.-based, media companies are not in need of a one-time strategy implementation or new product launch. As our six lessons illustrate, these companies need flexibility of thought and to be prepared to accept the realities on the ground, instead of implementing “one-size fits all” strategies. As we move into a new phase of hybrid traditional TV-streaming business models and assess how to integrate AI, this is particularly important to keep front of mind.

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In terms of strategy, of course, there is more to launching on streaming platforms than just technology. For NBCUniversal Local, it required careful planning and design of collaborative tools and tactics, as well as consistent communication to get staff on board both practically and philosophically.

NBC’s free ad-supported streaming television (FAST) channels were born out of the traditional linear broadcast and cable channels NBC already produces each day. But while the company leverages its existing content in its FAST offerings, they took a decidedly different approach according to Meredith McGinn, EVP of NBCU Local Media, Multicast Networks and Original Programming. “What we didn’t have in our portfolio was an all-news local channel,” she said, as she outlined their reasons for launching 24/7 local news channels in markets including New York, LA, Chicago, Philadelphia and Boston.

They chose to stream partly to reach a younger audience. “But what we’re also seeing on these platforms is a more diverse audience in all demographics; age, race etc.,” said McGinn. “It was really important to reach a viewer who had either bought a new connected TV in the last three to five years, perhaps cut the cord, or was a  ‘cord never’ and didn’t have an easy linear always-on source for local news.”

A blank slate

Being early movers to local news streaming  has meant the team has had to work out both what the audience on streaming platforms want to see from a local news product, and what the best workflow is internally to deliver that. Angela Grande, Director of NBCU Local’s Streaming News Channels says they’ve experienced a lot of learning and had to move quickly in order to  figure out the best strategy. 

When launching a new newscast in a market, NBC typically includes in-market producers, writers and reporters for each location. But in this instance they took a different approach. “Instead of beefing up staff in each individual market to build a network from the ground up, we built a small central team,” McGinn explained. One reason for this was because the cloud server technology, cloud playout, virtual production control rooms, and other technology used to make the streams work was relatively new for the business. 

“[The technology] could be best tested with a tight central team that could then put the new process through its paces. Then spokes go out and train each of the stations and personnel on how to use this technology. As we get product updates or new product ideas, we can test them again with a central team, again put them through their paces and then roll out more widely.”

Designing the setup from a blank slate meant that the team could test and learn first, without legacy technology and processes from the rest of the business slowing them down. But it was not without its challenges. “As you’re working with new tools, you realize that they’re not quite built for what you need,” McGinn outlined. “So we hired producers who pretty much became product managers working with vendors on development. They’re really trying to improve the product significantly day in and day out.”

Workflow, staffing, collaboration

The tech stack and staffing were not the only area the team had the opportunity to reimagine from scratch. McGinn noted that they were able to behave more like a start-up, but with a lot of resources to leverage from the wider business. It helped that the team was very eager to embrace change and new ideas.

One of the biggest learning curves for Grande’s team was collaborating and communicating with dozens of news stations across the country. “We had to break down the walls of communication to be sharing content and breaking news,” she said. “We’ve built this central team here in South Florida that works with all the stations across the country on best communication workflows, and how to actually work with us as virtual members of their news groups.” 

To facilitate good communication and collaboration, the business set up Teams channels with every newsroom across the country. There are leaders on the central South Florida team who check in with ‘captains’ at each station on a daily basis. These check-ins and allowing the personal relationship to build  have been a crucial part in keeping the streaming product front-of-mind for the teams.

“When we were setting up the business, we talked a lot about structure and workflow,” said McGinn. “There was a lot of concern around the ‘out of sight out of mind’. If you’re not there in the newsroom, are you and the platform going to be forgotten?”

Grande noted that initially there were a lot of reminders needed for the local newsrooms when news broke to make sure the information came to the streaming teams as well. “Then, after a lot of that practice, we really started to get the communication flowing,” she said.

Now, the teams communicate around the clock. “Someone’s always available to answer. So, if news were to break in Philadelphia, they can say, ‘Hey, there’s breaking news here, we’re going to go live,’” Grande explained. “Then folks here on our team can respond and jump in to help support the live event as they break into the channel. It’s really wonderful to see just how smooth all the communication is there.”

Integrating Spanish language and broader markets

NBCUniversal Local initially launched a select few English streaming channels, in order to get some early audience data that it could build upon. “The data from Peacock showed us that we had significant out-of-market, out-of-city viewership for our channels,” McGinn explained. “So we were able to see, for instance, that our South Florida NBC channel was being viewed in New York, and while it’s based in Miami, it was being viewed in Tampa and Dallas and LA.”

As well as the English language channels, NBCUniversal Local also has four regional streaming channels which bring live local news in Spanish to Hispanics across the country: Noticias California, Texas, Florida and Noreste. The wider business division already has 30+ Spanish language Telemundo stations and were aware that there was a growing opportunity in providing a FAST local news service to an Hispanic audience in those markets.

“So we took that data and thought, why don’t we do a different approach for Telemundo [streaming]? Why don’t we combine the resources in certain regions and create regional news channels? To beef up the coverage and recognize that there are many viewers out there who are interested in a broader view of local news, not just one hyperlocal market.”

The improved communication has made it easier for the Spanish and English teams to share content. It has also helped collaboration with the Telemundo channel teams, who now build newscasts for the entire region. “It’s something that they’ve never done before that they’re now doing through new types of collaboration to create these great streaming products,” noted Grande. 

Sharing early successes

McGinn credits the instant messaging tools and channels like Teams with really helping to bring people together in the true spirit of collaboration. But she also noted that sharing early successes was just as important in cementing the new processes in people’s minds.

“As quickly as we received data from the platforms that proved to people that people are watching these channels, we shared that widely,” she said. “That told the newsrooms, ‘Oh, this is not just the latest social media fad that may be gone in a year. This is real, on-television viewing.’”

The successful set-up and centralized team to test and share technology means that additional expansion is on the cards. But the learnings go beyond NBC’s Local News initiatives in order to help keep the company ahead of the streaming pack. Importantly, this team is sharing its learnings with other divisions in the company. “We want to be able to help others launch channels and initiatives that they have,” McGinn concluded.

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Ad-supported services, which claim the largest part of the newfound viewing audience, are driving this growth. The data underscores the shift towards digital streaming as millions of households’ primary content consumption mode.

The overall growth in streaming consumption is quite impressive. However, the most game-changing statistic highlighted in the report is that 75% of the newly acquired streaming hours are from providers beyond the top six streaming apps. This elite group includes Netflix, YouTube, Prime Video, Hulu, HBO Max (now Max), and Disney+ is witnessing an interesting transformation. As the consumption of FAST (Free Ad-Supported Television) and targeted programming intensifies, these traditional giants face competition from rising stars in the streaming realm. FAST’s expanding influence is reshaping the streaming landscape.

Key trends in the streaming market

comScore’s report explores and confirms trends in the streaming landscape, adoption, growth trajectories, and the ever-evolving range of services.

Digital video acceleration: Digital video consumption is accelerating, with 81% of households with WiFi engaging in streaming content.

Ad-supported streaming growth: CTV households streaming ad-supported content now reach an impressive 83.7 million, a 17% increase from 2021 to 2023. Non-ad-supported services also showcase growth, reaching 81.1 million, reflecting a 9% increase.

Targeted programming triumph: Targeted programming on FAST platforms is surging. Hispanic households lead the charge by consuming nearly twice as many hours of FAST content, showcasing an impressive 81% YoY increase. Linear streaming providers also found their place in the digital realm, securing three top spots in the Top 10 video services based on hours viewed per household.

Cord-cutting dominance: The cord-cutting trend is reaching a new milestone, with 60% of CTV households now being cordless. This substantial leap from the 37% recorded in May 2019 underlines the growing shift away from traditional TV subscriptions.

Smart TVs reign: Smart TVs are firmly establishing themselves as the preferred device for CTV streaming, with a robust 23% increase in total households streaming content via these devices since May 2021. Gaming consoles are also seeing a notable 18% increase in usage for streaming purposes.

Real-time market impact at play

Further, comScore’s report provides context in understanding how the evolving TV streaming marketplace impacts the current television revenue model. The current Charter-Disney dispute centers on pressure to change the existing television distribution paradigm. Charter is declining to accept Disney’s requested fees for its channels, citing the fact that Disney primarily reserves its premium content for its streaming platforms. Charter wants complimentary access and distribution flexibility, which directly impacts Disney’s direct-to-consumer revenue strategy. This dispute underscores the rapidly shifting dynamics of the entertainment industry.

The State of Streaming showcases the ongoing revolution of streaming in the entertainment landscape. With consumption growth, the ascent of ad-supported services, and the proliferation of emerging players, the report provides valuable insights to help reshape content monetization strategies.

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Industry giants are now seamlessly incorporating ad-supported tiers into their streaming options. This shift from the early days of subscription-based, ad free streaming underscores the industry-wide recognition that catering to budget-conscious consumers is integral to achieving sustainable subscriber growth.

New research from HUB, TV Advertising: Fact or Fiction, affirms that most television viewers actively embrace ad-supported offerings. Six out of ten viewers prefer ad-supported subscriptions, especially when presented with the prospect of a reduced monthly fee. Interestingly, those with reservations about advertising remain in the minority, underscoring the widespread acceptance of ads as an primary and tolerable factor of content consumption.

Shifting the paradigm

The transformation in consumer sentiment towards ad-supported subscriptions carries a dual impact. Firstly, it renders ad-supported tiers significantly more appealing to a broader spectrum of viewers, including those who haven’t subscribed previously. Secondly, it reinforces the notion that the quality and diversity of content have a significant influence over viewer preferences. This often outweighs the appeal of a completely ad-free experience. Within the streaming ecosystem, advertising now emerges as a central thread weaving together content variety, affordability, and viewer gratification.

The rising desire for customization

Furthermore, a growing trend in viewer preferences is the desire for enhanced control over subscription tiers. Nearly four out of 10 viewers express a strong inclination towards personalizing their subscription model. They’re searching for a flexible array of choices, ranging from a premium, ad-free encounter to a more budget-friendly alternative featuring strategically placed advertisements. The attraction in customization preferences empowers streaming providers to cater to a broader spectrum of consumer segments.

Entrants that intrigue

Notable platforms like Max, Disney+, and Netflix, which recently embraced ad-supported tiers, are meeting positivity from their audiences. This dispels concerns about potentially hurting your brand in a previously ad-free service due to the introduction of advertisements. Twenty-seven percent of viewers switched tiers. Among them, 60% switched from with ad to no ad tiers, and 46% switched from no ads to with ad tiers.

Enhancing engagement through thoughtful execution

Ensuring a satisfactory viewing experience for consumers creates an environment ripe for advertisers to thrive. When viewers encounter an appropriate amount of advertising content, their engagement levels increase. This principle extends not only to the overall number of ads but also to the duration of ad breaks. Contrary to the notion that advertising detracts from the streaming experience, it possesses the potential to elevate it, capturing viewers’ undivided attention when executed thoughtfully.

The valuable component of ad-supported subscriptions

As viewing sources diversify, ad-supported subscriptions assume a key role within the streaming landscape. Subscribers want the autonomy to mold their subscription expenditure as well as the degree of advertising they’re willing to embrace. In response, streaming platforms offer a dual strategy, presenting ad-supported and ad-free tiers. This shift harmonizes content diversity, affordability, and engagement, shaping the streaming ecosystem.

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Ampere’s data reveals that SVOD services like Hulu and Peacock, which were early adopters of ad-supported tiers, boast an impressive 90% of ad-supported viewers. On the other hand, latecomers like Netflix, Disney+, and HBO Max struggle to gain significant traction with their ad-supported options. These late starters capture only a small share of their subscriber base. For instance, as of June 2023, approximately 2% of Netflix and Disney+ US subscribers are on the ad-supported tier. Even HBO Max, which launched an ad tier in March 2021, had only 5% of its subscribers on its ad-supported plan before transitioning to Max in April.

Drivers of success

Ultimately, an ad-supported tier’s success depends on several factors, including the service’s pricing strategy, content library, and targeted audience. Launching with an ad-supported option from the start appears to be more effective in building a substantial base of viewers. Late adopters may find attracting a significant share of their subscribers to the ad-supported tier challenging. This is especially true if the service has a strong legacy of being ad-free.

Ad-free service is still appealing

Despite the apparent appeal of ad-supported viewing, most new subscribers across the top seven SVOD services still prefer ad-free plans. According to Antenna data, between January and May 2023, three out of five new subscribers opted for ad-free viewing. Even services that recently introduced ad-supported tiers, such as Peacock, saw a considerable percentage (69%) of new subscribers choosing ad-free options.

However, there are potential changes on the horizon. Netflix has made a strategic decision to remove its Basic plan, which previously served as a mid-range option between the ad-supported and standard ad-free plans. With the elimination of the Basic plan, the price gap between ad-supported and ad-free viewing has increased significantly from $3 to $8.50 monthly. This move might lead more new subscribers to opt for ad-supported viewing due to the cost difference.

Additionally, Netflix’s crackdown on password sharing during June and July 2023 could have also impacted its subscriber base. Free viewers who were previously enjoying content outside of the subscriber’s home are now more likely to sign up for their accounts. For these price-conscious users, the cheaper ad-supported tier could become an appealing option.

However, the trend of traditionally ad-free services attracting more ad-free subscribers might continue to prevail. Peacock’s decision to close the free ad-supported tier to new users. However, they still allow existing subscribers of the free ad-supported to continue using it. This suggests that companies are recognizing the importance of retaining ad-free subscribers.

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