Accenture’s Next Big TV Bet: AVOD and FAST Soar

The new TV landscape Accenture is talking openly about will be led by a plethora of advertiser-supported on demand or AVOD services, and linear advertiser-backed channels labeled FAST (Free Ad Supported Television) for short. Both venture categories are reaching consumers through smart TV sets and devices, as well as multichannel bundles using smart sets and gadgets as their main distribution path. Consumers are spending more time watching AVOD and FASTprogramming now, and their viewing time will increase in the months ahead as they reduce their monthly or annual budget on mega-content service subscriptions.

At the same time, suggests John Peters (pictured), Accenture's U.S. West Managing Director of Media and Entertainment, subscription mega-content players are depending on ad-supported tiers at a reduced monthly or annual fee to counteract flat or declining household universes. Disney+ will enter an ad-supported version into the marketplace this fall, and Netflix is exploring ways to launch a limited ad tier option in 2023 or 2024.

"We believe this is really the beginning of innovation," Peters says. "It's going to be like wireless where there are no more households to penetrate. It's going to be about how you're going to steal share, or how do you get more of [someone's] time?"

A study Accenture conducted last fall among 6,000 consumers worldwide noted that 63 percent believe it's too expensive to pay for all the entertainment services they want to watch on TV. Limited commercial alternatives "offers opportunities to all players in the media value chain," according to the study's executive summary. "That's the good news … this is truly the beginning of the innovation that will harness the potential of a very directed relationship to consumers. It's time for companies to take the next step and knock on the front door of their consumers. The companies that do so will reap the rewards.”

Smart TV product makers and bundle providers that create as well as curate or collate original channels and programs may be in a great position to generate that level of consumer relationship, Peters explains. They can institute greater resources to build the data infrastructure necessary to give viewers a more personalized, valuable TV experience.

"You go from being the front door to the place where you might actually do the shopping and viewing," he says. "You're not just the parking lot [at] the mall. They can convert this sort of traffic aggregation into other forms of power. It's going to be the most interesting space to watch."

Amazon and the multiple ways they impact TV viewers -- from Fire TV sets and devices to Prime Video subscriptions featuring original series and movies, ad-supported Amazon Freevee and the upcoming Thursday Night Football package -- is another company that can spark innovation in this arena. "They can get you to spend time doing any number of things," Peters says. "You will stick around, and commerce will happen. The Amazon model is one to watch because they are not just in video."

Another element moving the AVOD/FAST era forward will be interactivity, especially in the areas of advertising and the ability of viewers to buy products and services through the TV set. "Hulu's launch of various interactive ad formats the last few years, from picking one of two or three commercials from a company you want to watch during a particular break, to 'binge' ads welcoming you back to the couch after a snack or bathroom break, is a great launch pad for more novel approaches ahead," Peters notes.

"Interactivity will be great for the consumer experience and will be great for advertisers," he quips. "It's probably going to drive up the amount you can charge for that cost-per-message. If consumers can take a little more control of what ads they're watching, and when they watch them, commercials can be something they really like, and they'll have more trust with the platform."

When this TV era gets into full swing, who will come out on top? For now, Peters and his colleagues have no judgment calls. Yet. "The war is starting to rage," he says. "It's Samsung vs. Comcast vs. Roku vs. other companies who are going to come at this totally differently." Plus, look for sports betting and gaming/gamification to let loose as this era moves ahead.

"The wall is going to come down and it's never going back up," Peters declares. "It’s going to be massive. And we get to watch it."

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