Is Producing Original Content Table Stakes for FAST Brands?
Throughout its evolution, the US FAST market has seemed largely divided into two distinct categories: larger media companies using FAST as a vehicle for squeezing the last drops of revenue out of legacy content, and independents launching first-run shows on their FAST channels. These aren’t hard and fast rules, of course, but the perception remains strong that this dichotomy applies throughout the FAST ecosystem.
A panel largely comprised of independent streamers, The New Narrowcasters: Building and Growing Niche OTT Services and FAST Channels, took up the topic at Streaming Media Connect in November. Media Universe Cartographer Evan Shapiro of ESHAP observed that nearly everyone on the panel—Tastemade’s Evan Bregman Chicken Soup for the Soul’s Philippe Guelton, Gusto TV’s Chris Knight, and Trusted Media Brands’ Cameron Saless—were all producing “a tremendous amount of original programming for the ecosystem,” while the “big players” were typically “recycling programming from basically the waste bin.”
Referring to building a brand around original content, Shapiro asked, “Do you think that's table stakes, first of all, for a niche brand increasingly for FAST? And do you think it's really necessary for a niche brand to punch through to be able to understand how to economically and efficiently produce original content at scale?”
“We have benefitted in ways large and small from not just making stuff but making good stuff,” said Bregman. “Tastemade won an Emmy last year for our Struggle Meals show in a category that included the Food Network and Netflix and every other major competitor you can imagine. There is a reason that this year, the channels that have been launched are no longer people who are just seeking to extend their distribution. There’s a reason that now the platforms, number one, are culling channels for the first time. And number two, the channels that they are adding are from recognizable IP. They’re going to studios and saying, ‘Sure, we’ll give you your 10 channels because we understand that this is going to realistically get somebody to click.’ The same thing will be true going forward now that we are no longer in an area of unmitigated expansion. Standing out is going to require original content. It's going to require giving audiences something that they can't get anywhere else.”
Bregman noted that Tastemade delivers a mix of original and licensed content, and that brand alignment matters more to their choice of programming than whether it’s acquired or homegrown, although offering enough original content to differentiate the brand is essential to achieving the optimal blend of built and borrowed.
“We have preferred licensing arrangements and relationships with just about everybody in the marketplace," he said. "And typically when we produce a show, one of the reasons we do it is because we can't find it in the licensing world and we still think that it speaks to our voice in the brand that we're trying to give to consumers. And so for that reason, we specifically make stuff to stick out and yeah, going forward, I think that's increasingly table stakes. The large media companies are at an advantage in that sense because yes, you've heard of Westworld and therefore it is probably likely that you're going to click on a Westworld-focused single series channel as opposed to other things. Single series channels in general have somewhat of an advantage as a result of that, but I truly don't think that that is the long-term strategy.”
He added that the reliance on ad revenue, rather than subscriptions, to fund the creation of original content also factors into the tendency to look for appropriate shows to license as opposed to developing everything in-house. “And then on top of it,” he added, “we’re operating inside of an entertainment ecosystem that has spent the last however many years destroying a windowing model that really supported the creation of new content. The traditional studios, to your point, are now looking at FAST as a place where they can take something that they premiered in one place in a first window and made the bulk of their revenues from it and get something ongoing from it. I think that's not really going to work in the longterm, the reason being, if you are at a major studio and you're sitting on a large content library, you are probably looking after this year at the rev share that you're getting from your 24/7 single-series channel. And all it's going to take is for the distribution teams at these studios to raise their hand and say, ‘You're exposing my content for not very much money.’”
Turning to Chicken Soup for the Soul's Guelton, Shapiro said, "What Evan said about the model is interesting. There's not this subscriber fee lever to pull from a revenue standpoint to help your model make sense." Noting that, as an aggregator, Chicken Soup for the Soul's Redbox brand is essentially an independent competing with Pluto (owned by Paramount), Tubi (owned by FOX), and Freevee (owned by Amazon); and also as an independent programmer, he asked, “How do you compete? What is the differentiator when you're in with the agencies and the brands and the buyers? What is your competitive advantage? Because it isn't necessarily scale, what do you say? How do you represent the channels and the platform that you represent to differentiate and put some advantage in the marketplace?”
“Scale is important, and building scale is the problem of most independents,” said Guelton. “And that's why the ISA (Independent Streaming Alliance) can help, because it pulls our interests together and we can bring attention to our needs. And who knows, someday maybe we'll have better terms with platforms and be able to also capture more revenue. But it goes back to, what is your offering to the consumer? What do we want to offer in terms of content? And as we've said, big companies don't create original programming for FAST or AVOD. They just mine their library of content and they risk spoiling what was exciting about FAST as a platform by just turning that into basically a list of well-known TV shows. But the way we've been trying to approach it–and several, if not all of us are doing this—is working with brands to create content as well.”
The fact that larger media companies aren’t putting their best feet forward with FAST, Guelton argued, creates opportunities for independents to stand out not just with viewers but also their brand partners by approaching FAST with vigor, innovation, and originality. “I think we have a unique opportunity to meet with brands and clients and build content that is of quality, content that deserves to be made, that is important to be made, especially because of the diversity of our audiences,” he said. “And we can do that in a nimble enough way that we're able to balance the other big issue besides scale, which is balancing cost and revenue and the investment you're making to build your channels. Because being a hundred percent original programming--like Tastemade or Gusto TV--or partially original programming partially licensed content, it's a delicate balance that you reach. So when we approach brands, we need to bring both the creativity and of the custom content creation as well as the scale. And the scale will come from coming together as different streamers.”
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