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Ad-Supported Streaming Space Getting More Challenging, Panelists Say at XFronts Event

Acquiring an audience, finding carriage on connected TVs and devices and curating in-demand content are all getting more challenging in the ad-supported streaming space, panelists said May 25 at the XFronts event in Los Angeles hosted by OTT.X.

Getting carriage for FAST channels has become highly competitive, like finding a spot on a cable service, said Erick Opeka, chief strategy officer for Cinedigm, during the panel “How Does Anyone Make Money in this Business?”

“If you can’t get carriage, you won’t make any money,” he said. He also noted that the FAST channel business has become “more of a gladiator pit than cable ever was” in part because it doesn’t include the cushion of carriage fees.

Attracting eyeballs is more difficult as streaming services have proliferated, Opeka said. “To get [consumers] to download [your app] to the TV, you’re competing with all the big services that have driven up the marketing costs,” he said, noting it used to be “relatively cost effective to do a campaign with Roku or others.”

“If you’re competing with Netflix, Paramount, HBO Max, the cost per acquisition has skyrocketed,” he said.

Jonathan Skogmo, chief innovation officer at Trusted Media Brands, agreed that Roku has jacked up its pricing. “They want you to spend a quarter million dollars a quarter to get customers,” he said.

Panelists said original, exclusive, and in-demand, quality content is key as the competition increases.

“The table stakes are much higher now,” Opeka said. “We’re regularly involved in bidding wars for shows that can be an anchor of a FAST channel. … We’ve got a great one in Bob Ross.”

Skogmo added ad-supported streamers need “really unique programming, something that’s not already out.”

Finding content with ready appeal is also a key strategy.

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“We don’t have the major, major new releases to draw audience attention,” said Jesse Baritz, VP of content acquisition and development at Multicom Entertainment Group, so he said his company focuses on quality, star power and timely content.

“It’s making sure that it is 4K restored, star driven, hitting at the right time with the right audiences,” he said, adding that “when Natasha Lyonne was on ‘SNL’ this week, we made sure we had a movie that stars her.”

Ben Lister, senior director of content at Sinclair Broadcast Group, pointed out that the big subscription streaming guns such as Netflix are moving into the space, creating another challenge.

“As the SVODs start turning on advertising, I’m not sure how the consumer is going to respond,” he said, advising those that want to compete to “be prepared to make new content.”

Something as elemental as metadata can also help audiences find your content. Have “as much of that as you can” to help with discovery, Lister said.

“If you ask Siri or Alexa to show you the content, it comes up,” he said.

Another way to stand out from the crowd is to have a clear brand.

“You need a brand,” Opeka said. “If you don’t have a brand, align with somebody who does.”

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