Rapid Growth of Ad-Supported Streaming Services
NewId Leads FAST Platform
Domestic Players Like SKB's 'PlayZ' Emerge
OTTs Also Considering Ad-Supported Low-Cost Subscription Models
[Asia Economy Reporter Cha Min-young] As the whole world groans under high inflation, more people are finding even the monthly subscription fees of 10,000 to 20,000 won for online video services (OTT) burdensome. Instead of paying expensive fees for cable TV, IPTV, or OTT, ad-supported free streaming (FAST) platforms that allow viewers to watch video media for free by watching ads are gaining attention.
According to market research firm Omdia on the 29th, in the current $247 billion U.S. video market, ad-supported streaming services account for $49 billion, already surpassing the subscription market ($33 billion). The gap with real-time TV ad revenue ($65 billion) is also narrowing. In developing regions such as the Middle East and Africa, it has already overtaken the real-time TV market.
The company leading the FAST platform in the global market is New ID, affiliated with the media group 'NEW.' It operates FAST platforms through partnerships with over 30 companies, including Samsung TV Plus and LG Channels pre-installed on Samsung Electronics and LG Electronics smart TVs, as well as Roku, the number one streaming company in the U.S. smart TV market. Recently, it has been showcasing K-content with about 30 companies such as YG, MBC Plus, and SBS, mainly in North and South America. A New ID representative said, "In the case of 'Baby Shark TV,' launched with The Pinkfong Company, some platforms record the highest inflow in the kids' category," adding, "Beyond K-pop, K-dramas, and K-movies, K-variety shows and K-mukbang content are now also loved by viewers worldwide."
Free video services are also emerging one by one in Korea. SK Broadband introduced the OTT box 'PlayZ' earlier this year, equipped with digital streaming channels specialized for the MZ generation (Millennials + Generation Z). 'Dorama Korea,' which provides Japanese dramas, also offers ad-supported free services instead of charging a monthly subscription fee.
As competition intensifies, there are forecasts that major OTT companies will enter the FAST platform market. Netflix is considering lowering subscription fees in exchange for watching ads. Domestic OTT companies are also reportedly studying overseas FAST platform cases and exploring various revenue improvement plans such as mid-roll ad insertions.
Fueled by the popularity of FAST platforms, there is also speculation that global online video ad revenue will surpass real-time TV revenue. According to Omdia, total online video ad revenue, including ad-supported streaming services (AVOD) like YouTube and FAST, is expected to grow by 48.9%, from $174 billion (225 trillion won) this year to $259 billion (335 trillion won) in 2025. Online video ad revenue is projected to surpass real-time TV channel revenue by 2025.
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