Rakuten TV doubles down on ad-supported streaming in Europe
In a market defined by subscription fatigue and advertising reinvention, Rakuten TV is betting that FAST is not simply an add-on to streaming but one of its defining next chapters.
“The appetite is huge, and it’s growing,” Cedric Dufour, CEO of Rakuten TV tells Streaming Media. “We are seeing a real shift in consumer behaviour and in advertising budgets. The momentum behind FAST is not just cyclical; it’s structural.”
Rakuten TV was early to the opportunity. Founded in Spain in 2010 as a subscription service before transitioning into transactional VOD, by late 2019 early 2020 it had pivoted to AVOD and FAST becoming the first platform to rollout those propositions across 42 countries in Europe.
“Developments in the US had signalled that premium content could thrive in a free, ad-supported environment,” Dufour explains. “We realised there was room for free content with ads as a new way of delivering content. So we invested heavily in AVOD and FAST.”
The platform now distributes approximately 500 FAST channels across Europe, including around 120 owned-and-operated channels reaching more than 150 million households. Individual markets typically carry about 100 channels, balancing Rakuten-owned IP with third-party offerings such as CNN and a range of sports, news and lifestyle brands.
“Technically, we could offer 250 channels in each country,” Dufour says. “But consumers already complain about too much content and too many choices. The priority is quality and curation, not quantity.”
Rakuten TV CEO Cedric Dufour
Virtuous circle
The early days were not straightforward. European audiences were unfamiliar with FAST channels and often confused them with traditional linear broadcast channels. Studios, too, were cautious.
“There was reluctance,” Dufour admits. “Studios were concerned that if they opened their catalogue to free ad-supported distribution, it would cannibalise subscription or transactional revenues.”
The breakthrough came through monetization. “We were able to demonstrate that FAST could generate meaningful advertising revenue without eroding other windows. As performance data improved, content supply followed.”
With better monetisation came more catalogue access. “With more qualitative content came larger audiences. And with larger audiences came more advertising revenue.”
That “virtuous circle” is now firmly established. Advertisers are steadily reallocating budgets from traditional linear TV into connected TV (CTV), drawn by targeting precision, measurable performance and access to younger viewers.
Recent internal research shows that 70% of TV viewers watch FAST channels at least once per week. Among those viewers, a significant share — particularly younger demos— no longer consume traditional linear television.
“If advertisers want to reach younger audiences, CTV is essential,” Dufour says. “If they stay only on traditional TV, they will not reach this population.”
That said, Dufour believes CTV is additive to linear. “They will coexist,” he says. “There is space for both, just as streaming did not eliminate cinema.”
Ad loads on Rakuten TV’s FAST channels are broadly comparable to traditional TV, he says, but user perception differs. “Better targeting, geolocation capabilities and first-party data (where user consent is granted) allow for more relevant advertising, which improves tolerance.”
Telcos, once sceptical, have also shifted position. He says, “Three or four years ago, many operators questioned the need for FAST alongside hundreds of broadcast channels. Now, they recognise the distinction — and the incremental value.
“The advertising model with FAST on CTV is different. The consumption model is different. It reaches new audiences,” he says.
Movies remain Rakuten TV’s strongest-performing genre, reflecting its origins in film distribution. Last December for instance it launched its flagship FAST movie channels (themed around action, romance, comedy and crime) with over 100 hours of curated on-demand films on French telco provider Free Ciné.
Top channels and movies on Rakuten TV
Drama and action also perform strongly. Notably, single-IP channels have exceeded expectations. Dedicated channels built around series such as Alerta Cobra and 21 Jump Street have delivered consistent engagement.
“You might think audiences would tire of watching the same show continuously,” Dufour admits. “But the performance proves otherwise.”
Local nuance matters. Operating across 42 territories gives Rakuten TV a substantial comparative data set. Japanese manga performs particularly well in France and Germany, for example, but less strongly in other markets. In Poland, the platform operates a dedicated local-language movie channel to address domestic demand.
“Local content is very important,” Dufour says. “It must sit alongside global content.”
Partnerships with smart TV manufacturers including Samsung TV+, LG Channels, Hisense VIDAA, TCL Channels, Xiaomi TV+, Free and Netgem have secured branded remote-control buttons, home-screen placements and EPG integrations.
“Our bet from the beginning was on television — because we’re primarily about movies, and movies are best enjoyed on a big screen. Today, around 90% of our viewing still happens on TV screens. However, we recognise growing consumption on mobile and tablets and are adapting accordingly. While TV remains our core, we aim to be present wherever audiences want to access content.”
From B2C to B2B expansion
In recent years, Rakuten TV has expanded beyond its own D2C platform. Through Rakuten TV Enterprise, it now distributes channels and powers VOD stores for partners.
An agreement announced last week with Prime Video will see Amazon’s platform carry Rakuten FAST channels in Spain, Italy and Germany.
“We could have said they are a competitor but we do not decide where users watch content. Therefore, expanding distribution across multiple platforms - smart TVs, telcos, and streamers - is central to our strategy. Our own app remains important, but future growth will primarily come from expanding touchpoints and partnerships across Europe and beyond.”
Telecom partnerships further extend reach. Rakuten TV operates the VOD store for Orange in Spain and works with Germany’s 1&1. Last December its app became available on Virgin TV in the UK, “significantly expanding reach across one of Europe’s most competitive households.”
It has previously funded content, notably as part of its contractural obligation to operate in Spain, but Dufour says covering production costs through advertising alone proved challenging. “We scaled back original production to focus on channel curation and distribution.”
The company is a division – and a relatively smaller one at that – in Japanese parent Rakuten Group which is valued at US11.05 billion. It was formed in 1997 and has built a plethora of digital services around its core online retail platform including fintech, travel and mobile. The group’s scale also supports cross-platform loyalty initiatives. In France, for example, Rakuten e-commerce customers can redeem loyalty points for Rakuten TV rentals or ebooks via the Rakuten Kobo app.
“The strength of the ecosystem is differentiation,” Dufour says.
For now, Rakuten TV remains focused on Europe, but the US market is under consideration. “It is very saturated,” Dufour acknowledges. “We are having discussions around distributing selected channels, potentially leveraging Spanish-language or movie-focused offerings.
“Beyond that, opportunities in the Middle East and parts of Asia are being evaluated, subject to rights agreements. In VOD, scale is everything. If you do not reach scale, content costs are too high.”