1. The Ad-Supported Fallout From Fallout

Fallout, the new high-profile drama on Amazon Prime, is a hit. As per Variety’s Luminate ratings, the series had 5 million views and 2.5 billion minutes watched in its first week alone, which led Amazon to immediately sign on for Season 2.

But that is not what is important.

It’s also the second high-profile series to emerge from video game IP, (Max’s The Last Of Us being the first) but that is not what is important either.

What is important is that most of the people who watched this high profile original on streaming watched it with ads.

Let that sink in.

Amazon was able to serve up personalized/targeted ads to millions of viewers of a high profile original series, the sort of program that advertisers who traditionally spend nine figure sums on TV advertising like to run their ads against, but which has been notably absent on streaming.

That’s a really big deal.

Why It Matters

To go over our math on this, let’s start with the events of January 29th, which was when Amazon switched all of their US Prime Video subscribers to an ad-supported plan. While said subscribers did have the opportunity to upgrade back to ad-free for another $3/month, we are generously estimating that maybe 30 percent of them did. Which means that 70 percent, or around 55-65 million people, have the ad supported version. (These numbers also assume that around half of all Prime subscribers actually watch Prime video.)

So even if we are off by 10 million in either direction, that’s still a lot of people—Netflix, for comparison, has 23 million ad-supported viewers worldwide.

This is the show the industry has been waiting for, even if they were not aware of it. The high profile streaming original that is mostly watched with ads.

You know how many articles or LinkedIn posts I’ve seen from people bitching about having to watch ads during the show? None.

Which is likely because Amazon is keeping the ad loads super low during the show, but still, there are lots of new studies out there, like this one from LG Ad Solutions and this one from Tubi and the Harris Poll, that show that consumers do not mind watching TV with ads.

Amazon creating a much broader audience for ad-supported originals plays into our broader theory of how this will all play out. Which is that big brands like Pepsi and AT&T and Nike spend tens of millions of dollars producing their TV commercials and thus do not want them running against library content. They want them running against big budget originals with big audiences. 

Once streaming—subscription streaming in particular—can offer that to them, then the light will go on and they will say, “Oh, now we get it! SVOD is the new prime time and FASTs are the new cable! Here, take all our money!”

Or something to that effect.

So Amazon bringing in 50M+ viewers for ad-supported original programming was a big first step in that direction. 

Producing a popular buzz-worthy series for those 50M+ ad-supported was a big second step.

Now if only the subscription services would find a way to work together to make ad buyers' lives easier. But that is another story…

What You Need To Do About It

If you are an advertiser or ad agency, especially the television buying team at one of the many “video agnostic” ad agencies, you need to pay attention to what’s happening here and keep an eye on how quickly the subscriber numbers on the other SVOD services are catching up. We see a lot more discounted bundling on the ad-supported tiers as well as bigger price gaps between ad-free and ad-supported as the state of play.

If you are one of the big subscription services, here’s my weekly plea for you to all start collaborating and working together and stop pretending it doesn’t matter because “it’s digital and digital is different” (WTF does that even mean?) Because if you don’t start working together, all those ad dollars are just going to flow somewhere else. Ad buyers don’t have time to figure it all out.

If you are a Hollywood studio, please do not see the success of The Last Of Us and Fallout as a greenlight to make Every Video Game Ever into a TV series. You will, of course, do so regardless of what I just wrote, just don’t be surprised when it doesn’t pan out.

2. DAZN and Tubi Bring Live Sports To FAST-Land

Sports has slowly but surely been popping up on the FASTs. We have NBA content on Roku and the NFL Network on a number of services from Vizio to LG to Pluto TV, as well. 

But that’s just shoulder content, or “everything but the game itself.” Which is why it is significant that Tubi, the most watched of all the FASTs, as per Nielsen’s The Gauge, is teaming up with DAZN (pronounced “Da Zone”) on, among other things, a women’s soccer channel that will feature (wait for it) live games.

This is something many of us have been predicting for a while—that FAST services would become home to a range of live sporting events beyond the Big Four—and this deal is a pretty significant proof point that we were right. 

Why It Matters

Live sports make the FAST services seem more like “real” TV. It’s part of their growing up process and the overall “push to quality” we’ve been seeing as they shed lower production value programming in favor of both premium series like Westworld and culturally relevant originals.

The fact that DAZN, one of the biggest names in streaming sports, chose to work with Tubi is also significant as Tubi has, as per Nielsen’s The Gauge, the largest audiences of any of the free services, just one tenth of a percentage point behind Disney+ and three-tenths of a percentage point ahead of WBD’s Max. 

Meaning a lot of people will see those women’s soccer games as well as the boxing, MMA and international soccer matches that DAZN’s channels on Tubi will also feature.

The soccer is what seems important here though, as Tubi now has another way to appeal to the audiences who’ve showed up for its culturally relevant originals, shows like the Nicola Coughlin vehicle Big Mood

The growth of live sports channels can also be seen as an additional proof point that the FASTs are now an integral part of the streaming ecosystem, one that has evolved way past being a home for old movies and reruns.

Live sports are also good for the leagues themselves.

The FAST services will promote these sporting events to their growing audiences. So that women’s soccer will not get short shrift the way it might on an ESPN. 

It benefits the FASTs as well: fans will come to Tubi and see the shows it has to offer, whether that’s originals like Big Mood and Dead Hot, or the tens of thousands of hours of movies the service has, and stick around. Similar themes will play out on other FAST services as well, ideally tailored to their particular content themes.

This is important because, like everything else, our taste in sports is becoming less concentrated, and while the Big Four (NFL, NBA, NHL, MLB) will still hold sway, they’ll be joined by a wide range of alternate options, each with its own dedicated fan base and content and merchandise ecosystems.

So lots of little bubbles in addition to the four big ones.

Why It Matters

If you are one of the other FAST services, get to work on your own sports deals. This can be anything from shoulder content to live games. (Ideally you’ll get both.) The good thing about most live sports is that they are advertiser-friendly—no brand suitability issues and a dedicated audience that is likely hard to reach elsewhere.

If you are a niche sports league (and by “niche” I mean anything other than the Big Four) then FASTs are your friends and you will get the sort of Big Fish In A Small Pond treatment there that you won’t get on ESPN.

If you’re ESPN, you can change that perception and give smaller sports the love they deserve, something that will make even more sense as you move to streaming and become the sports arm of the greater Max app where you can find other shows that appeal to these niche audiences and steer them there as part of a broader personalized experience.

Yes kids, the future is so bright you’ll want to wear shades.