Report: U.S. Has Over 1,500 Free Streaming Channels; Revenues Expected to Top $12 Billion by 2027
It’s official: people in the United States really love their free TV. At last count, over 60% of American consumers watched at least one free ad-supported TV (FAST) channel in their home, and every service that offers FAST channels expanded their free channel count in 2022.
Now, thanks to an exclusive report from Television Business Insider, we know exactly how large the FAST market has grown. TBI and its sister research division Omdia found that in the U.S. alone, there are now more than 1,500 individual FAST channels available. Roku Channel leads all services with 453, followed by Pluto TV with 350 and Plex with 332.
Each of these services has worked hard to expand its user base in the last year. Roku Channel grew from 60 million in March to over 70 million active accounts by the end of 2022, a year-over-year increase of more than 15%. Pluto TV saw even more explosive growth, swelling from 54M users in the third quarter of 2021 to 72M at the end of Q3 of 2022.
The growth rate has been similar almost across the board for FAST services in 2022, and expanding content offerings are a big part of the reason why. FAST services also offer a “lean-back” experience, meaning viewers can let the channel worry about things like switching to the next episode while they scroll their phone, do housework, etc. One current television executive estimates that as much as 80% of all TV watching is of the lean-back variety.
The report also found that global FAST revenues are climbing almost as quickly as channel counts. FAST channels could account for as much as $12 billion in global revenue by 2027, with U.S. channels making up $10 billion of that total by themselves. FAST revenues in the U.S. alone have grown by almost 20 times since 2019, and are expected to nearly triple again in the next four years.
FAST channels are quick revenue generators for the companies that own them thanks to a relatively simple formula. The content on FAST networks is often made up of older shows and movies, the rights to which are usually cheap to acquire, if they weren’t already buried in a studio archive already. Then it’s just a question of setting up a stream and lining up advertisers, and the cash usually follows.
The challenge for FAST operators in the future will be similar to the one currently facing subscription video-on-demand (SVOD) providers; how will they stand out from the competition? This is where the simple formula will get tricky, as adding new features to user interfaces or offering original programming on FAST channels will quickly eat away at that quick and easy revenue.
For now, however, FAST providers should stay the course and watch the money flow in. It’s no surprise that services like Netflix and HBO Max have had discussions about launching their own FAST channels in the future, given how rapidly the demand for such channels is increasing.