[News Terms] Tired of Subscription Fees... How About the New 'FAST'?

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OTT 'Streamflation' Emerges as an Alternative

FAST stands for 'Free Ad-Supported Streaming TV.' It refers to free, ad-supported live streaming TV. As the name suggests, it is an ad-based video (AVOD) service that allows viewers to watch desired content for free on internet-connected smart TVs or connected TVs in exchange for watching ads for a certain period.

Video on Demand (VOD) is a video service that allows users to watch programs whenever they want. There are three types of VOD: Subscription Video on Demand (SVOD), Ad-supported Video on Demand (AVOD), and Transactional Video on Demand (TVOD). OTT services like Netflix, which allow unlimited content viewing for a set period through regular subscription payments, are classified as SVOD.

FAST Service [Photo by Samsung TV Plus]

Unlike traditional TV, OTT services allow users to select episodes or binge-watch content. Traditional TV follows a broadcast schedule based on time. In contrast, OTT services can be watched anytime. With the growth of OTT, consumer viewing habits have changed, and OTT services have come to be known as new media, while traditional TV is referred to as old media.

FAST is an OTT service derived from the category of old media. The programming basis of FAST is not a broadcast station but channels such as news, entertainment, drama, and sports. For example, entering an entertainment channel will stream programs like 'I Live Alone' and '2 Days & 1 Night' continuously for 24 hours according to a fixed schedule for each program.

FAST services emerged in the mid-2010s. With the increase in smart TV penetration, they grew rapidly, especially in the U.S. The average cost of paid broadcasting services like cable TV in the U.S. is around 110,000 to 120,000 KRW. The high cost of paid broadcasting led to a cord-cutting trend where users canceled paid subscriptions.

Recently, more consumers in Korea are feeling burdened by OTT services due to subscription inflation (subscription + inflation) or streamflation phenomena, where subscription fees continue to rise.

[Photo by Akyung DB]

Korean consumers pay nearly 500,000 KRW annually in subscription fees. According to 'Subscription Wars 2024,' published by Bango, a UK-based subscription bundling and payment specialist, Korean consumers use an average of 3.4 subscription services per person. The annual subscription expenditure is estimated at $363 (480,000 KRW), which amounts to about 40,000 KRW per month. Among service types, subscription video (SVOD) accounted for the largest share at 84%.

OTT providers agree that subscription fee increases are inevitable. They argue that to survive fierce market competition, they must reflect the increased costs of producing high-quality content in subscription fees.

FAST can be an alternative for consumers tired of subscription fees. However, unlike OTT, users cannot select specific episodes they want. They still have to follow the order programmed by the channel. Nevertheless, FAST is a free service with no subscription fee burden and allows binge-watching like Netflix. In short, it is a free service concept that lies between traditional TV and OTT.