In Q2 2023, PARQOR will be focusing on three trends. This essay focuses on "The definition of scarcity is continuously evolving away from linear and towards walled gardens."

To remind you, PARQOR identifies a few key trends each fiscal quarter that reveal the most important tensions and seismic shifts in the media marketplace. Must-read stories or market developments are not always obvious from press reports or research analysis, and often require a deeper dive. PARQOR’s analysis questions established ideas and common wisdom, reassesses the moving pieces, and reveals the potential in the media marketplace in 2023.

Free ad-supported TV services (FASTs) are a hot topic lately, and deservedly so: both Paramount Global’s Pluto TV and Fox Corporation’s Tubi are now showing up in Nielsen’s monthly The Gauge index of the most-watched services across broadcast, streaming, cable and other sources on TVs in the U.S. Both are consumed less than 0.5% of both HBO Max and Peacock and less than 1.0% of Disney+. 

So, two free services are performing as well as the best performing legacy media subscription services, and better than subscription services not showing up on The Gauge like Discovery+, Starz and Apple TV+. There is an obvious hole in that story: The Gauge does not track consumption on mobile devices, and somewhere between 15% and 50% of Netflix consumption is on mobile devices, and around 90% of YouTube consumption may be on mobile devices. As for everyone else, they tend to be black boxes outside of Nielsen — we are lucky to get the limited insights from Nielsen that we do get.

This means the story for FASTs is positive — both Fox and Paramount have reported growth in users and revenues from Tubi and Pluto, respectively — and also emerging competition subscription streaming services in the U.S. facing flattening growth. But, to play devil’s advocate here, what if there is not one story for FASTs but multiple stories, and they aren't all positive?

Key Takeaway

The FAST story is a good one but it isn't a consistent one, and its future lies outside the hands of Nielsen's current market leaders.

Total words: 1,500

Total time reading: 6 minutes