Ad revenue for free ad-supported streaming TV (FAST) channels is falling fast. Indeed, some channels have seen a drop of up to 50% so far this year, according to The Information. In response, companies have started removing weaker-performing FAST channels from their lineups. This is a sharp turnaround for a segment that had exploded in popularity over the last five years. The decline comes as major platforms like Amazon (AMZN) Prime Video, Netflix (NFLX), and Disney+ (DIS) have entered the ad space, which has drawn ad budgets away from FAST channels.
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While viewership of these free channels is still rising, advertising hasn’t kept the same pace. According to ad-tech firm Kargo, ad prices on FAST platforms dropped by 4.4% between May and June, while prices for video-on-demand rose by 4.5%. Even Amazon has struggled to fill its ad slots, with about 20% reportedly going unsold. Many ad buyers are now trimming the number of FAST channels on their plans and focusing instead on platforms with broader reach or more valuable audiences.
To stay competitive, some FAST services are turning to better content and new ad strategies. Samsung TV (SSNLF), for example, has added channels featuring David Letterman and MrBeast, while Roku (ROKU) has begun allowing media partners to sell their own ad inventory. The goal is to increase fill rates and attract advertisers who already have trusted relationships with TV networks. Still, industry insiders say that the market has become saturated, and that the FAST model—which was once seen as a fast-growing alternative to traditional TV—is now facing real limits to its expansion.
Which Stock Is a Better Buy?
Turning to Wall Street, out of the stocks mentioned above, analysts think that AMZN stock has the most room to run. In fact, AMZN’s average price target of $159.50 per share implies more than 10% upside potential. On the other hand, analysts expect the least from NFLX stock, as its average price target of $1,258.69 equates to a loss of 6%.
