Mark Bliss and Kira Baca from Rightsline speak with Erick Opeka, President & Chief Strategy Officer at Cinedigm, about the rise of FAST channels and how it continues to impact live television. Cable channels are cutting the cord on their broadcast deals and relaunching in the FAST universe – and according to Erick Opeka, this trend just might be the future of live TV. 

Video Transcript (Part 1):

“Cable, when it originally started was, you know you watched ABC, NBC, CBS, when the shows were sort of bland & had to appeal to everybody. There were some good things but if you loved cooking you probably weren’t ever going to catch on NBC about cooking.”

“But then the Food Network came along, and the History channel came along and so forth. I think what has happened is that those channels have become parts of big companies that are chasing big profits they need big audiences, so they’ve all drifted away from being niche or ‘enthusiast’ audiences as we like to call them.”

“And so what has happened is this technological explosion of capability where you can operate a faster, pre-ad supported streaming television channel at a fraction of the cost and reach people just as easily is really re-inventing what live television means.”

Video Transcript (Part 2):

“The cable world has always had this dual business model where you get carriage fees and advertising revenue. It had stability, you have long-term deals. If I had a new cable channel, yes I would have to come up with fifty million but I would probably get, you know, between the carriage fees and a long five-year distribution deal, I would have time to figure out my audience & chart my path forward. Meanwhile, in the FAST universe, it’s a little bit like a gladiator pit where there’s no carriage fees, you have to give up a huge swath of your ad revenue.”

“The old cable deal was who they’d be lucky to get to five or six percent of your ad revenue. In this case, it’s fifty percent if you don’t have a whole lot of clout. So instead of having that two-pronged revenue stream, now you have a half of a revenue stream, & oh and by the way, they can cut your channel at any time. There’s no long-term carriage deals like there is in cable, if you don’t perform, your channel loses carriage.”

What it really does, it makes you think, you have to think always about growth, growth, growth. Grow an audience, being effective with programming and you have to think like an entrepreneur always. You can never rest on your laurels unless you’re in the top twenty-five, thirty percent of  channels.”

That’s a really different mindset. I would be lying if I said sometimes it’s a little nerve-wracking. You know, we have a really big portfolio like any portfolio, some are really crushing it & some we’re still trying to figure it out. It’s a lot of pressure to figure it out especially this is big table stakes now with a seventeen billion-dollar marketplace. If we lose a channel, it’s not about what we are losing today but what we could have lost if we had figured it in the future.”

Video Transcript (Part 3):

“If you look back globally, I’m not sure of the exact number, and this number was tossed out to me recently. I don’t know if there is a way to validate it or not? But someone told me that globally there’s something like eighteen thousand cable channels & then another sixteen thousand broadcast channels on top of that.”

“I think in the FAST space there’s maybe three hundred and fifty globally right now, so we got a long way to go I think. Now what’s interesting is, what I’m starting to see, and I’m actually helping to facilitate is the transition of some of those cable channels into the FAST universe.”

We just partnered with Robert Rodriguez on his El Rey network. About a year ago they had to make a decision, were they going to lock themselves into another five-year deal with cable or were they going to try to do something different? So they decided to pull a Thelma & Louise, jump off the cliff, and cancel their cable carriage deals so they could be free to pursue a FAST strategy. So we basically relaunched El Rey as FAST network late summer this year. We’ve had a fantastic reception so far. We’re having to modify the programming line up for FAST.”

“It’s a little different than broadcast but we’re very very pleased with how it’s done so far, & I think we’re going to see a lot more of that coming forward especially as the big cable companies look at how much they’re spending on carriage fees for channels & saying ‘You know, these independent channels that have no viewership, they’re not going to cut it anymore.”

Erick Opeka, President & Chief Strategy Officer at Cinedigm