Broadcasting and online revenue models

[Taxi645]

So we all know F1's broadcasting and online revenue are very outdated. There is loads of available but unused data interesting to the millions of hardcore fans while an even larger audience is alienated by pay per view, hampering the growth of the sport and attractiveness for sponsors.

So how would one improve matters?

I think that question is not really hard to answer. Make viewing free everywhere drawing in new crowds and sponsors but simultaneously offer a very comprehensive payed premium package for the hard core fans.

So what would such a premium package offer?

There is loads of premium content one can offer:

- Life on board of your favourite driver.
- Life telemetry of your favourite driver, including fuel and tire use.
- Life advanced laptimes information, gaps, race histograms etc.
- Exclusive interviews with team members and drivers.
- Team specials; meat the team, history, future etc.
- Technical updates of the cars.
- In depth track preview.
- In depth look into strategy before, during and after the race.
- Increased radio broadcasts from your favourite teams.
- Drivers briefing.
- Perhaps even crowfunding personal favourite teams

I mean the possibilities for premium content are endless. Each race offer some premium content for free, making free viewing more attractive and attracting more people to the premium package.

[Richard C]

A freemium model would be interesting. But on their end it would be risky. Everyone can't see a race in person. Streaming may be the revenue stream (no pun intended) they are focusing on. Freemium runs the risk of... no revenue if the premium is not compelling enough for fans to buy.

They apparently plan to build out their own delivery infrastructure and that is not particularly cheap to do correctly. Given they will have issues at first, maybe free at first (you can't complain much about service problems if it is free) and then move to a near freemium model where basic streaming is quite inexpensive, but not free. Then provide premium content in which the possibilities is endless.

Richard

[NaBUru38]

As a major sport, F1 earns a lot of money from both sponsors and broadcasting rights.

We saw Bernie Ecclestone deciding to switch from free to pay TV, therefore prioritising broadcasting rights over sponsors. Of course, that's because he had control over tv money and not sponsor money.

As you know, today there's more entertainment options available than ever. There's pay TV, cinema, Netflix, YouTube, videogames, social networks, live shows, nightclubs, porn... Getting and keeping fans is harder than ever, and F1 did the opposite for a long while.

It's easy to try to get more fans by offering free access. F1, like football, can't afford that. But there are multiple business models, and the market changes really quickly.

F1 wants to offer an over-the-top (standalone) streaming service. That's great, since people can sign up no matter any other entertainment options they have.

But how will F1 convince a casual sports fan in Lyon, Guadalajara, Istanbul or Perth to check an F1 race and sign up for that service? netflix has done it, but mny other have failed. The established platforms (Sky, DirecTV, Vodafone, Telefónica) have a huge reach, and cannot be ignored to find new customers.

That's why it's interesting that F1 is negotiating with Netflix. They have refused to offer sports, as they are live-based, unlike films, so they lose value very quickly. But I doubt that F1 will tell Netflix to add race broadcasts to all subscribers, as it would be too expensive. Instead, I think that Netflix would offer a standalone package. So Netflix's job would be to promote the F1 package to its huge, worldwide customer base.

[Number4]

Almost all of your premium content wish list is already available on F1.com and Sky race control.
Channel 4 show F1 free to air in Britain. They have to charge about £25,000 per 30 second advert to break even.
To have matched Sky's offer they would have to charge about £100,000 per advert.
F1 would have lost £100 million per year just from the UK if they had chosen a free to air broadcaster over a subscription supplier.
They don't care how many people watch, it is all about the bottom line on the share holders spread sheet.

[gert]

I think it's quite easy:
if they move to a pay-per-view model with no more free package:
* My dad and my brother who are both casual viewers will both stop watching
* I will try to find an illegal stream somewhere or stop watching altogether.

[chunder]

This is the issue

F1 is moving to a pay model, not because fans want it, same as football, motogp, and most sport.

It only happens because the rights holder sells those rights, no other reason, money.

Dso you think sponsors want their product in front of less people? The sales people involved at FOM are walking a tightrope here.

I have watched some sports on dodgy streams for years and will NEVER pay for sports myself.

It is simply profiteering, and sadly as a world most are dumb enough to not realise what precedent is being set and just hand over their money without really thinking for the future, coz early on it was one company, then it was two, eventually it will be 5 or 6 all wanting your money all showing things you want, so your initial outgoing becomes 3 or 4 fold more.

Are we learning? Oh dear.

[Sodemo]

Originally Posted by chunder

This is the issue

F1 is moving to a pay model, not because fans want it, same as football, motogp, and most sport.

It only happens because the rights holder sells those rights, no other reason, money.

Dso you think sponsors want their product in front of less people? The sales people involved at FOM are walking a tightrope here.

I have watched some sports on dodgy streams for years and will NEVER pay for sports myself.

It is simply profiteering, and sadly as a world most are dumb enough to not realise what precedent is being set and just hand over their money without really thinking for the future, coz early on it was one company, then it was two, eventually it will be 5 or 6 all wanting your money all showing things you want, so your initial outgoing becomes 3 or 4 fold more.

Are we learning? Oh dear.

Exactly. This (for me) all started with Boxing in the late 90s and early 2000's. If the public had given it the middle finger by refusing to pony up for the pay per view fights, then they would have cancelled the program. However there are enough people in the world with more money than sense who will just pay up willingly for stuff which they previously received for free.

[chillibowl]

Originally Posted by chunder

Dso you think sponsors want their product in front of less people? The sales people involved at FOM are walking a tightrope here.

I have watched some sports on dodgy streams for years and will NEVER pay for sports myself.

i think sponsors what to put their products in front of people who might actually buy their products...so with all due respect, if people are not willing to pay for the event then how likely are they to buy the associated products?

but this is an old argument and i think also one that is a function of where one lives.

one of my bigger issues with Europe's FTA model was the lack of innovation.

in N.America, most major sports have been filming and broadcasting in HD since the late 90s/early 00s.

i think F1 had its first HD race in 2009/2010..almost a decade later.

anyways, agree to disagree, but all of the improvements in broadcast quality, amount of coverage, streaming options (both legal and illegal) have come about as the direct result of the investments made by the pay-wall sports channels.

Originally Posted by Sodemo

If the public had given it the middle finger by refusing to pony up for the pay per view fights, then they would have cancelled the program...

well boxing effectively killed itself and it wasnt the pay model that did it otherwise the UFC would not have experienced so much growth.

rather, its not that people didnt want to pay, they just wanted something more if they did pay.

likewise, its only now that a pay wall exists that F1 consumers have any sort of influence over the sport at all and the powers that be are actually acknowledging our purchasing power.

prior to that, in the FTA era (even when viewership numbers were much higher) BE/FIA/FOM could care less what the fan base thought about anything.

anyways, just my opinion on the matter and no doubt its an unpopular one.

[Mike Harte]

Originally Posted by chillibowl

i
one of my bigger issues with Europe's FTA model was the lack of innovation.

in N.America, most major sports have been filming and broadcasting in HD since the late 90s/early 00s.

i think F1 had its first HD race in 2009/2010..almost a decade later.

anyways, agree to disagree, but all of the improvements in broadcast quality, amount of coverage, streaming options (both legal and illegal) have come about as the direct result of the investments made by the pay-wall sports channels.



well boxing effectively killed itself and it wasnt the pay model that did it otherwise the UFC would not have experienced so much growth.

rather, its not that people didnt want to pay, they just wanted something more if they did pay.

likewise, its only now that a pay wall exists that F1 consumers have any sort of influence over the sport at all and the powers that be are actually acknowledging our purchasing power.

prior to that, in the FTA era (even when viewership numbers were much higher) BE/FIA/FOM could care less what the fan base thought about anything.

anyways, just my opinion on the matter and no doubt its an unpopular one.

Sorry to disagree with you again, chilli, but this cannot be laid at the doors of the broadcasters.

F1 tele-visual output has been controlled by FOM for more years than I can remember, and it was BCE who refused to bring in the equipment to allow HD, etc. to be produced. It must be remembered that FOM has it's own TV production company that travels from race to race, and on the fly away races, requires at least two 747 freighters just for it's own equipment.

For years, Bernie dangled visual gimmicks in front of the media, promising all sorts of goodies such as split screen, with the ability to choose a camera located on your favourite's car. But that was all he ever did; talk about how good live coverage could be. However, it was even more money that he wanted for all these "improvements", and if broadcasters, whether FTA or PTV, weren't prepared to pay, then Mr E wouldn't provide the output.

For too long the public, whether that be enthusiast such as ourselves, casuals and, more particularly, politicians have failed to take action against the monopoly that the FIA allowed BCE to create, for just the cost of a few coins of silver. And that monopoly will still be in existence, unless it is overridden in the courts in meantime, for long after any of us have left this mortal coil.

And the TV rights monopoly are only a small part of the overall power that was invested in FOM by Todt.

[chillibowl]

well thats kind of my point. FOM had no incentive to offer more (despite wanting to or claiming to want to of course) as long as FTA was the norm.

now that people are paying they are naturally demanding better quality and more viewing options...i think the speed with which the sport is now moving (their adoption of 4K/UHD this year for example) is a direct result of people now paying. in effect the sport is responding to the demands of the paying fan base.

to be honest though i dont now much about the TV/internet sales in the UK....my point could be all coincidental.

over here, owning an HD capable TV/digital broadcast/high speed internet/ formats and availability etc became the norm much earlier so maybe thats why our leagues moved over to better and more modern formats with more viewing options earlier on.

[Akrapovic]

Originally Posted by chillibowl

i think sponsors what to put their products in front of people who might actually buy their products...so with all due respect, if people are not willing to pay for the event then how likely are they to buy the associated products?

Not paying for one thing doesn't mean you won't pay for another. Just look at the sponsors themselves for why this argument doesn't work.

Google'd F1, first sponsor I see is Santander. A bank. I can't go through life without a bank. Second sponsor is Red Bull. I personally don't drink energy drinks, but back when I did, this was the one I tended to drink. Third sponsor I see is Petronas. Not paying for F1 doesn't mean my car doesn't require lubrication. Next is Martini. I don't drink, but my Mrs does like a good Martini Asti. She's happy to buy that product, but she's not going to pay for F1.

I don't watch F1 outside of the basic Channel 4 coverage anymore. It would cost me around £40 a month to watch a series that I simply don't enjoy as much as I used to. I do not see £40 a month (that's almost £500 a year - €550, $650) value in F1. But I DO see £1.50 of value in a can of Red Bull. Or the value of simply having a bank.

Not paying for one product does not mean you are no longer a consumer. I also don't pay for TV movie channels. That doesn't mean I don't consume other items.

Edit: Basic question here. Why is £40 a month seen as an acceptable charge for F1? WEC coverage is £40 for the entire year (including Le Mans). That £40 includes all the qualifying and races live, and replays of the last race (after which they get released for free on YouTube). Includes onboard camera selection, live timing, additional text based commentary, and a live track map. Also works on phone apps and other devices such as games consoles. I'm not saying F1 doesn't provide this this, I'm just asking why there is a 12 fold price difference?

[chillibowl]

Mike offered more of breakdown on what the costs are and while 18/mos just for the F1 channel (which of course requires one to first buy a basic package - which it must be said provides a lot of other content as well) does seem on the surface high...but $10 per race, in relative terms, is a fair amount to pay for several hours of original content.

but i would agree, better price points need to be found and even a choice of which weekends/GPs a person wants to pay for.

more choice is always preferable.

anyways, your cable packages are still cheaper then ours (around CAN$100/mos for the basic tier of channels plus my sports channel add ons)

i do like the idea of a deal with Netflix (but maybe thats because i am already a subscriber to that). f1 content, highlights, features already bundled into what i think is a very affordable and competitively priced streaming service. and if they can work it so races can be shown on delay or even ultimately live even better.

and then if there is some real competition in the market place, then the cable subscriptions should decline as well.

[loon]

I can watch 3hrs of Super GT for free on the internet, closer more exciting racing than F1 and way sexier cars, no pay F1 for me

[Number4]

"Sky Sports’ coverage aired across their dedicated Formula 1 channel and Main Event, with 730k (3.5%) watching from 19:00 to 22:30. As this is the first time that Sky have shared coverage of the USA round of the championship with a free-to-air broadcaster, (1.1%) watching via Main Event, a split of 68:32. In total, around a fifth of the F1 audience opted to watch Sky’s programming."

https://f1broadcasting.co/tag/ratings/

Sky's F1 revenue
At least 730,000 viewers paying £480 = £350,400,000
Advertising revenue guestimate =£10,000,000
Not less than £360,400,000 per annum, probably double that, peak viewing figure during the Italian GP was 1.39 million. £480 is part of package funding other channels too.

Channel 4 revenue
2,780,000 viewers paying £0 = £0
Advertising revenue guestimate for the races, practice and qualifying= £50,000,000
£50,000,000 per annum

This is how they control world sport. It is practically 10:1, men against boys.
All Sky has to do is keep F1 and all the teams sweet with a nice handout.
They just don't care how many people watch. It is all about getting subscriptions.

[coppice]

It speaks volumes about the depths to which Grand Prix racing has sunk that ultimately we are just talking about different ways of watching telly.

[Sodemo]

To be honest, people in the UK get shafted for many things. My colleague in Belgium pays for the Sky TV equivielent over there with the full package and he pays something around 40 Euro. The same package over here is more like 80-100 pound.

[chunder]

The thing is.

It is only like this, because someone told us it has to be like this.

We did not choose it to be like this, we were largely happy with a simple format.

FOM sold it to the highest UK bidder regardless, and they don't care about viewing figures, they care about money, NOTHING MORE. Or they wouldn't do it.

It's the same with cricket, fair play to the ECB, they sold it just after the 2005 Ashes, great time to sell, the high point of the sport in recent times, but they sold it to SKY. Countless people immediately prevented from watching the sport, countless people who were hooked in unable to carry on watching it, countless kids who sat with their Dads watching Flintoff, Vaughn, Pietersen, Warne and McGrath, hooked into a new sport, then just dumped because some board wanted more money than Channel 4 could offer.

It is what boards do. FOM are the only ones to blame here, not SKY, not the BBC not punters. FOM sold to the highest bidder and then compounded it by making SKY the sole place you can watch it in the future. Though that might have been SKY's doing aswell as FOM's.

Basically they are saying, the few million who watched it on FTA don't matter, as we can make more from the 100k that are prepared to pay.

Dress that up as a business model to anyone else and surely it fails? Also shows that advertisers with teams don't care about tv viewers.

Would fascinating to know if ANY sponsors have refused to get involved in sponsoring an F1 team because of the change to pay tv and SKY and the far smaller amounts of potential customers that can watch it. I somehow doubt it

[Moneyseeker]

Originally Posted by chunder

The thing is.

It is only like this, because someone told us it has to be like this.

We did not choose it to be like this, we were largely happy with a simple format.

FOM sold it to the highest UK bidder regardless, and they don't care about viewing figures, they care about money, NOTHING MORE. Or they wouldn't do it.

It's the same with cricket, fair play to the ECB, they sold it just after the 2005 Ashes, great time to sell, the high point of the sport in recent times, but they sold it to SKY. Countless people immediately prevented from watching the sport, countless people who were hooked in unable to carry on watching it, countless kids who sat with their Dads watching Flintoff, Vaughn, Pietersen, Warne and McGrath, hooked into a new sport, then just dumped because some board wanted more money than Channel 4 could offer.

It is what boards do. FOM are the only ones to blame here, not SKY, not the BBC not punters. FOM sold to the highest bidder and then compounded it by making SKY the sole place you can watch it in the future. Though that might have been SKY's doing aswell as FOM's.

Basically they are saying, the few million who watched it on FTA don't matter, as we can make more from the 100k that are prepared to pay.

Dress that up as a business model to anyone else and surely it fails? Also shows that advertisers with teams don't care about tv viewers.

Would fascinating to know if ANY sponsors have refused to get involved in sponsoring an F1 team because of the change to pay tv and SKY and the far smaller amounts of potential customers that can watch it. I somehow doubt it

Strip the sponsors off the cars that aren't either - linked to the driver(s), associated with the team as a part owner/shareholder, supplier and or partner of the main car manfacturer or even owned by the team owner and see what is left...

Add to that, sponsors that just want to be seen as a partner of another spirational brand - for example those that sponsor Ferari for the association. Even on Ferrari, UPS for example I believe has the deal to ship FCA parts worldwide.

Real, unconnected sponsorships based on pure marketing criteria and evaluation are a thing of the past largely. The AVE figures apparently show that Haas got $100m dollars in equivalent advertising in 2016, but did it increase sales by $100m?

[broadrun96]

Originally Posted by chunder

The thing is.

It is only like this, because someone told us it has to be like this.

We did not choose it to be like this, we were largely happy with a simple format.

FOM sold it to the highest UK bidder regardless, and they don't care about viewing figures, they care about money, NOTHING MORE. Or they wouldn't do it.

It's the same with cricket, fair play to the ECB, they sold it just after the 2005 Ashes, great time to sell, the high point of the sport in recent times, but they sold it to SKY. Countless people immediately prevented from watching the sport, countless people who were hooked in unable to carry on watching it, countless kids who sat with their Dads watching Flintoff, Vaughn, Pietersen, Warne and McGrath, hooked into a new sport, then just dumped because some board wanted more money than Channel 4 could offer.

It is what boards do. FOM are the only ones to blame here, not SKY, not the BBC not punters. FOM sold to the highest bidder and then compounded it by making SKY the sole place you can watch it in the future. Though that might have been SKY's doing aswell as FOM's.

Basically they are saying, the few million who watched it on FTA don't matter, as we can make more from the 100k that are prepared to pay.

Dress that up as a business model to anyone else and surely it fails? Also shows that advertisers with teams don't care about tv viewers.

Would fascinating to know if ANY sponsors have refused to get involved in sponsoring an F1 team because of the change to pay tv and SKY and the far smaller amounts of potential customers that can watch it. I somehow doubt it

That's a baseless childlike argument. It's mostly because YOU don't like what decision they have made for their business. Guess what, it is THEIR business and if they can show an increase in their revenue for their customer, Liberty Media and the teams (sorry it has and will NEVER be you the fan), they have to pursue that option or likely be in breach of contract. It's all well and good you feel like you've been slighted, then exercise your option and leave. That's pretty much the only leverage you have. The only place the fan is involved is on a team-sponsor level and given most have moved to non-consumer advertising the fan is being squeezed out there as well.


As for the earlier arguments against sponsor tie-ins, there are 1000s of studies that show exactly opposite the claims. Advertising and tie-ins work and work very well. MB knows exactly what they are getting out of their tie-in and promotional work and according to MB USA it is very effective at increasing their market share and customer loyalty across F1 and GT racing. Many of the decreasingly common consumer goods, most racing advertising is actual B2B and corporate not consumer, advertised show an immediate response worldwide in loyalty or consumer shifts when a product moves to a new series or team. It's not even close to debatable idea, it's almost a predictable pattern across continents, economic levels and product variety.

Dress up what business model? The we'd like to make money from these PAYING customers rather than provide something to all who want for free?? That seems like business 101 to me, more money in equals actual success. Happy feelings and smiles have no economic value outside of the schoolroom and communes. And if no sponsors have been lost going to, what most of the rest of the world outside Europe has already it seems, then maybe all involved with the numbers know how it will go. It's almost like they have studied it before or something.

[S griffin]

The thing is TV is always there and it needs to be showed on proper TV to keep getting interest. That way more new fans will stumble on it and viewers and attendance should increase

[Akrapovic]

Originally Posted by S griffin

The thing is TV is always there and it needs to be showed on proper TV to keep getting interest. That way more new fans will stumble on it and viewers and attendance should increase

That's not how the future is going though. My kids don't watch TV. They find the idea of channel surfing on a TV bizarre, and the concept of TV schedules, tuning in at 8pm to see a show madness. It's all internet streaming now - whether it be through YouTube or another platform. Channel surfing doesn't happen now - featured videos, recommended videos and social media mentions is where you find new content.

That's what the kids are using, so they might as well embrace it now and be ready for when that generation becomes the target audience. You either move with the times, or get left behind. F1 is at least moving with the times, but they've just decided they're too posh to let poor people be part of even viewing the sport, which is just lovely.

[chillibowl]

Originally Posted by Akrapovic

F1 is at least moving with the times, but they've just decided they're too posh to let poor people be part of even viewing the sport, which is just lovely.

to be fair that is on the harsh side. there is more ways to access the sport now then ever before ranging from paid to free.

but based on this and other similar threads, it seems like the the division is between those who live in the UK and those who live outside of it.

with the advent of pay and subscription models those of use outside of the UK have far more and better viewing options and it sounds like we get it at far more affordable prices....so i would suggest is an issue for your local government's TV/Internet competition departments and not f1 per say.

but i can certainly understand that frustration that causes given the UK is basically one of the home bases for F1 and the fan base there was traditionally the only one that mattered.

anyway i dont think this is a rich vs poor argument and certainly not to the extent of a 'let them eat cake' scenario.

[Akrapovic]

Originally Posted by chillibowl

to be fair that is on the harsh side. there is more ways to access the sport now then ever before ranging from paid to free.

Until this year, they did their best to remove every YouTube video they could. They've been removing free access as quickly as they possibly could. I don't see how there are "more ways" to access the sport now, until they finally started looking at YouTube. Until that, I'd say there were far less ways.

There are more ways to access the Creventic Dubai 24H, or Blancpain Endurance Series than F1. And those are actually free.

Originally Posted by chillibowl

with the advent of pay and subscription models those of use outside of the UK have far more and better viewing options and it sounds like we get it at far more affordable prices....so i would suggest is an issue for your local government's TV/Internet competition departments and not f1 per say.

It's not the governments fault that FOM signed a deal with SkyTV to put the series behind a massive pay wall. The fault of that lies strictly at the feet of FOM and Sky. Whilst TV packages can be expensive, there is plenty of free to air TV in the UK. F1 made the active choice to move away from this.

Originally Posted by chillibowl

anyway i dont think this is a rich vs poor argument and certainly not to the extent of a 'let them eat cake' scenario.

Actually I think it's exactly what it is. It's just put under another name, which we hear associated with F1 a lot - elitism. That's the posh name for it. Drop the European countries where the fans are, lets fly off to the middle east. They don't like F1, but they do like being important. Let's drop the German GP, French GP etc, where the fans are - that oil rich corrupt government would like a wee party. What is that, if not elite?

Originally Posted by Richard Casto

Ditto. My teen and college age children watch ZERO TV, but consume quite a bit via streaming.

Richard

I don't know if you're similar to me, but I found it quite odd at first. It's very different to how I consumed media when growing up. But they have literally no interest in a television. The TV is simply a device to get YouTube up, so they can watch what they want, when they want it. Once you realise that's how the world is going, it makes sense for series to be streaming. It's completely out of the comfort zone for most of us (although I'm lucky that I'm young enough to adapt to it easily - I realise if you're 60, that's a big change you're being asked to make!), but we can't just deny that's how the world is going and say "things were better in the old days".

Streaming is the correct route for series to be going down. But affordable pricing is a must, because the current UK system is a complete joke, and that's purely down to the choices made by F1, nobody else.

[Richard C]

Originally Posted by Akrapovic

That's not how the future is going though. My kids don't watch TV. They find the idea of channel surfing on a TV bizarre, and the concept of TV schedules, tuning in at 8pm to see a show madness. It's all internet streaming now - whether it be through YouTube or another platform. Channel surfing doesn't happen now - featured videos, recommended videos and social media mentions is where you find new content.

That's what the kids are using, so they might as well embrace it now and be ready for when that generation becomes the target audience. You either move with the times, or get left behind. F1 is at least moving with the times, but they've just decided they're too posh to let poor people be part of even viewing the sport, which is just lovely.

Ditto. My teen and college age children watch ZERO TV, but consume quite a bit via streaming.

Richard

[coppice]

Originally Posted by S griffin

The thing is TV is always there and it needs to be showed on proper TV to keep getting interest. That way more new fans will stumble on it and viewers and attendance should increase

And that's a good thing ? Fact is, the bigger it's got , the more the media tail has waged the sporting dog the more inaccessible and stupidly expensive it has become .