Omdia: FAST expected to grow as viewers move ‘pay-to-free’

FAST revenue globally are expected to reach US$13 billion by 2028, according to DTVE’s sister research outfit Omdia.

According to Omdia, the lion’s share of FAST will remain in the US, which will account for US$11 billion of sales.

In Latin America, Brazil and Mexico will dominant in FAST, accounting for 85% of the region’s revenues, according to Omdia.

The whole of Latin America has meanwhile become a strategic focus for Paramount-owned Pluto TV, with the region accounting for over 40% of Pluto TV’s non-US monthly active users (MAUs) in 2023.

Source: Omdia

Overall, Omdia believes that following a decade of cord-cutting, users of paid online video services are increasingly moving to free online video.

Omdia is tracking several market developments that are driving this pay-to-free trend. The clampdown on password sharing by streamers, for example, has created a welcome subscription boost, but Omdia sees this as a short-term phenomenon, with that segment of the streaming customer base vulnerable to pay-to-free churn in 2024, particularly as industry strikes and the cutting back on programming budgets will start to affect content quality.

The ongoing cost-of-living crisis will also lead to some pressure towards pay-to-free churn. This is something that will become even more apparent as the streamers increase their prices to improve profitability while, at the same time, the attractiveness of free (Advertising Video on Demand/Free Ad Supported TV) alternatives grows, says the research outfit.

“We are expecting that streaming companies will manage ad loads in a sensible way, and so Omdia is still forecasting good growth for paid online video in 2024. The movement from free to pay will happen, although there will still be room for the paid services to continue to thrive. But all of the factors we have highlighted mean that the balance is quite precarious, and the poor implementation of advertising, or the imposition of price increases too quickly and too steeply, could well threaten that expected growth,” said Maria Rua Aguete, senior research director in Omdia’s media entertainment practice.