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Industry / Market - Europe/USA

Industry Report: Europe and the Rest of the World

By 2027, FAST revenues will surpass $10 billion in the USA, while in Europe, they will only exceed $1 billion

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We asked Frequency CEO and media entrepreneur Blair Harrison to comment on the figures provided by Omdia’s latest report and discuss the reasons behind the disparity

By 2027, FAST revenues will surpass $10 billion in the USA, while in Europe, they will only exceed $1 billion
Frequency CEO Blair Harrison

Last month, British trade publication Television Business International published the findings of Omdia’s latest research into free ad-supported television (FAST), disclosed by Maria Rua Aguete during a panel held at Miami’s Content Americas (24-26 January).

According to Omdia, FAST-derived revenues are set to reach $12 billion (circa €10.91 billion) in 2027. Notably, the FAST market has boomed in the USA over the last two years, “as operators such as Samsung, Roku, LG Channels and Paramount’s Pluto TV have secured rapid consumer uptake”. On the whole, FAST channel revenues in the USA grew by almost 20 times between 2019 and 2022, and are set to almost triple between 2022 and 2027.

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The research shows that, even though FAST revenues in the USA are expected to surpass $10 billion (circa €9.09 billion) by 2027, in Europe they will only exceed $1 billion (circa €910 million).

Cineuropa asked media entrepreneur Blair Harrison, who is also the CEO of Frequency, a leading video software-as-a-service (SaaS) platform for connected TV, to comment on the latest figures provided by Omdia’s report and talk through the reasons behind the huge disparity.

“There are fundamental differences between TV markets in the USA and in Europe, and this is the main reason behind the disparity. Many European countries have long-established and robust free TV services, while the USA has traditionally been a saturated pay-TV market with very little free TV usage,” Harrison explained.

“The lack of free TV in the USA is what made it ripe for the emergence and proliferation of FAST services. On the other hand, Europe isn’t leaning into FAST as quickly, because free TV isn’t an entirely new concept. That said, the model exemplified by FAST will still proliferate through Europe, but will take longer depending on each country’s existing free-to-watch model. It’s also unclear what the saturation point will look like for the adoption of new free TV services, which will also vary on a country-by-country basis,” he added.

When asked whether FAST stakeholders see Europe’s slow adoption as a threat or an opportunity, Harrison pointed out how FAST itself is “a long game”, since it represents “the confluence of several significant shifts in both the consumer media business and the evolution of the underlying technologies that power it.

“The migration of traditional video services to the cloud provides disruptive economics for the industry, empowers an entirely new generation of content creators and provides programmers with unprecedented flexibility. These trends will provide numerous opportunities with FAST in the short term and with the evolution of the entire video landscape in the medium to long term. Europe’s slower adoption of FAST should be seen as an opportunity by all stakeholders… The best is yet to come!”

On the possible downsides of the US-driven expansion of FAST, Harrison argued, “It implies that an initial saturation point will likely happen soon, and there will be some decay among the current providers.

Pay-TV operators have lost a lot of territory to FAST for obvious reasons, and FAST will continue to provide a solid additional viewing option for cord cutters. Smaller FAST platforms and new entrants will continue to see challenges, as they’re up against much larger companies, including those with completely different business models, such as Apple, Amazon, TV manufacturers and others.”

According to Harrison, however, direct consumers will be the “big winners”, as they will benefit from “increased choice of free services, and further downward pressure on pay services”.

Lastly, we asked Harrison what it would take for the European market to catch onto FAST like the USA has. “There are many factors in play, but the main drivers will be time and the decline of traditional television. Again, this will differ market by market, given the vastly different video ecosystems across Europe, but as long as FAST continues to improve upon and diversify the experiences that consumers want, it will grow,” he concluded.

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