FAST Industry Experts on International Distribution, the Challenges of LATAM, and more
With thanks to Banijay Rights, LoveTV Channels, Samsung TV Plus, Vevo, Trusted Media Brands and Zixi for sharing their insights.
In the recent report I wrote for Papercup on the promise of FAST for Spanish-speaking audiences in the U.S. as well as opportunities within Latin America, we featured quotes from industry experts. But we had such a rich amount of information that it seemed silly to leave it on the cutting room floor, so instead I grouped these comments together by question and, in the spirit of the report’s sponsor, ran it through my favorite AI tool (Jasper) to distill common threads. That can be read below, but first, my sincere thanks to Shaun Keeble, Teresa Lopez, Aline Jabbour, Natalie Gabathuler-Scully, Jill Goldfarb and Valerio Motti for taking their time to answer the questions we had posed to them.
As a reminder, the full report can be found here, so download if you haven’t already.
Let’s get started!
When deciding what platform types to distribute content outside their home markets, what considerations are there?
Scalability and Infrastructure
Global platforms often provide robust scalability and infrastructure, essential for penetrating multiple international markets concurrently. These platforms come equipped with advanced IP networks, cloud capabilities, and extensive edge device compatibility, enabling seamless content distribution. The technology distributor's perspective reinforces that platforms like Pluto, Samsung, and Virgin in the UK, with their expansive distribution reach, are pivotal. Although their technological infrastructure is capable, the emphasis remains on their ability to cater to large audiences efficiently.
Localization and Market Fit
Localization requirements cannot be overstated. The objective is to ensure that content resonates with the target audience's cultural and linguistic preferences. Global platforms might offer wider reach, but local platforms provide targeted engagement opportunities. EPG leverage and collaboration possibilities with local advertising and marketing teams can result in higher market penetration and revenue generation.
Revenue Generation and Platform Engagement
Monetization potential remains the primary concern for content owners, making it urgent to evaluate the revenue generation capabilities of each platform meticulously. Platform engagement, including the degree of collaboration and commitment to sustained marketing efforts, significantly impacts how well the platform performs in delivering economic returns. Thus, while app-based and OS-based distinctions are present, the critical measure is revenue potential.
Who is involved in the process of deciding to distribute internationally?
The decision-making process for expanding international distribution involves a detailed analysis of various factors to optimize content exploitation. Key stakeholders, including sales, rights management, operations, top management, and content and programming teams, collaborate to evaluate the relevance and potential market impact of the content. The process also considers existing distribution channels like pay TV and OTT platforms to determine the feasibility of introducing Free Ad-Supported Streaming Television (FAST) channels in untapped markets.
Strategically, if content is already distributed via pay TV or OTT platforms, it is generally not made available on FAST channels. However, in markets without existing distribution, FAST channels present a viable opportunity. This approach ensures that decisions are aligned with overall strategic goals and market needs, with top management playing a pivotal role in the final decision-making, supported by insights from the content and programming teams. The emphasis is on the strategic contribution of additional distribution channels to achieve the set business targets.
How do you decide what content to distribute globally?
Understanding Local Markets
Local sales teams at TMB are highly knowledgeable about their territories, using market understanding and data from first and second window runs to determine content success. Titles that perform well on broadcast also tend to do well in the FAST space, proving the importance of local content. Vevo and Samsung echo this sentiment, stressing the need for localized content tailored to specific markets and demographics.
Content Performance and Strategy
Experts highlight that local content generally yields the best results. However, adaptable formats that have been successful in multiple markets can also perform well if launched as dedicated international versions. TMB, for example, values universally themed content that resonates across different regions.
Engaging with Platforms and Ad Companies
Maintaining dialogues with platforms and ad companies provides valuable insights into content performance and monetization. This intelligence helps launch competitive channels. Vevo emphasizes the importance of working with distribution partners to tailor content to local tastes, ensuring the right content reaches the right audience.
Flexibility and Experimentation
The FAST (Free Ad-Supported Streaming TV) model allows for editorial flexibility and experimentation at lower costs compared to traditional TV. This model enables companies to test different content strategies without significant financial risk.
Localization vs. Globalization
While Vevo and Samsung prioritize localization, they also recognize the value of core channels, such as 'Vevo Pop,' which are adjusted for each market. Samsung's strategy includes global agreements for content available in all regions and selective contracts based on local relevance, ensuring content is engaging and culturally appropriate.
What are the challenges of distributing in LATAM right now?
The Latin American region presents a mixed landscape for content distribution, with Brazil and Mexico emerging as leading markets. The primary challenge lies in balancing high viewership with low monetization rates. Despite the growing consumption of FAST channels, economic returns remain lower compared to other regions like Europe. However, industry experts see growth potential and believe that a localized approach will provide the best opportunities.
Key Challenges
Monetization Discrepancies:
Viewership vs. Revenue: While viewership in LATAM is comparable to some European markets, monetization lags behind. Advertisers face low fill rates and CPMs.
Cost Structures: Business costs, including statutory corporate tax rates, further impact profitability. Choosing the right tech distributor with an optimal cost structure is crucial for success.
Localized Content Needs:
Cultural Diversity: Brazil and Mexico have distinct cultural identities, languages, and viewing habits, necessitating highly localized content strategies.
Language Barriers: Brazil's limited availability of Portuguese content restricts distribution, while Mexico benefits from a broad range of Spanish-language content, primarily driven by channels catering to the Hispanic population in the US.
Market-Specific Challenges:
Brazil: The challenge is to increase Portuguese content availability to meet local demand.
Mexico: Despite the advantage of Spanish-language content, there is a need to ensure cultural relevance and high audience expectations.
Strategic Insights
Local Adaptation: Dedicated local adaptations of popular formats like MasterChef and Survivor show promise. A localized approach to FAST channels is believed to offer the best short- and long-term opportunities.
Investment in Trust: Companies are investing in LATAM with the expectation that monetization will improve over time. Strengthening partnerships and refining localization strategies are key steps being taken to address cultural and language barriers.
Distributing content in LATAM involves navigating a complex landscape of high viewership, low monetization, and diverse cultural needs. Strategic decision-makers, content owners, and platform strategists must focus on localized strategies, optimal cost structures, and strengthening partnerships to capitalize on the region's growth potential.
How important is global distribution to your monetization strategy?
Global distribution is increasingly seen as a crucial component in maximizing monetization strategies for content owners, platforms, tech distributors, and ad companies. While North America remains a dominant revenue driver, expanding into further English-speaking territories and emerging international markets presents significant growth opportunities.
North America and English Language Territories
North America continues to be the largest market for revenue generation. However, expanding across additional English language territories can provide incremental monetization benefits. This expansion is contingent on maintaining a manageable cost base, highlighting the need for strategic investment.
Local Language Distribution
Local language distribution requires a careful analysis of cost versus reward. Typically constrained to specific territories, this approach could limit revenue potential, especially considering the upfront costs of localization. Nonetheless, with the right strategy and platform, emerging markets offer promising growth opportunities.
Emerging Markets
Emerging markets, particularly the US Hispanic audience, represent a significant opportunity for growth. Companies like Banijay Rights are exploring collaborative efforts with platforms that have a strong presence in these regions. This approach underscores the potential of underserved markets in driving revenue growth.
Saturation in the US Market
While the US remains the largest market for Free Ad-Supported Streaming TV (FAST), it is becoming increasingly saturated with channels and competition. In contrast, international markets are still expanding, offering untapped potential for monetization, user engagement, and additional channel launches.
Vevo's Global Strategy
Vevo emphasizes the importance of global distribution in growing its viewership and commercial efforts. By delivering music videos to fans worldwide and featuring both international superstars and local talent, Vevo aims to maximize its commercial value and engagement.
Market-Specific Considerations
The importance of distribution varies by market. For instance, while Latin American (LATAM) markets may not be crucial for immediate monetization, they are essential for expansion and future opportunities. Conversely, distribution in the US remains highly relevant for current revenue generation.
Global distribution is essential for maximizing revenue and staying competitive in the rapidly evolving entertainment industry. By strategically navigating both established and emerging markets, content owners and platforms can significantly enhance their monetization efforts.
Have you experienced the effects of saturation in the FAST market in the US? In what ways?
Content Refresh and Competitive Edge
Industry leaders acknowledge the necessity for continuous content refresh to stay competitive. Banijay Rights, for example, leverages its extensive catalog to enhance programming, aiming to create dedicated hubs around popular formats like "Deal or No Deal." A year-round promotional strategy is emphasized to ensure sustained value, as opposed to one-time promotions.
Paradox of Increased Consumption vs. Stable Revenues
A notable paradox exists within the US FAST market—while the number of channels and viewing hours are rising, revenue growth is not keeping up. This is attributed to stable or declining revenues despite higher consumption rates. Experts believe that monetization will eventually align with consumption, anticipating higher fill rates and CPMs in the future.
Challenges in Channel Approval and Launch
Securing approval and launching new channels has become increasingly challenging. Platforms are more focused on rethinking and reorganizing their overall content offerings, making it difficult for new channels to gain traction.
Opportunities in Latin America
Unlike the saturated US market, Latin America presents substantial growth opportunities due to its nascent stage of FAST development. With significantly fewer platforms and channels compared to the US, regions like Brazil and Mexico offer vibrant markets for early entrants. Establishing a presence early can help content providers attract dedicated audiences and gain valuable insights, positioning them for long-term success as the market matures.
In conclusion, while the US FAST market faces saturation and revenue challenges, strategic content refresh and year-round promotional efforts can help maintain a competitive edge. Simultaneously, exploring emerging markets like Latin America offers promising growth prospects for content providers willing to invest early.