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F1 facing Pay-TV conundrum

NEWS STORY
17/08/2017

Ever since taking control of F1 at the beginning of the year, the sport's new owners have made no secret of the fact that they are looking to monetise as many aspects of the sport as possible.

With an eye on younger fans, those that exist and those still to (hopefully) be won over, the sport is looking at various ideas that will appeal to a generation more likely to follow the sport on devices while out and about as opposed to sitting in front of a TV screen for a couple of hours on Sunday afternoons.

As a result, the sport, which under its new owners is looking at a series of 5-year plans, is looking at moving away from the more traditional broadcasting to the likes of live streaming.

Quite how this will sit alongside traditional broadcasting remains to be seen especially as live streaming could see new names enter the market or current broadcasters forced to adapt, after all this is likely to be the shape of things for the future.

Indeed, only last week Disney announced that it is pulling all its content from Netflix and is to start its own streaming service, thereby cutting out the middleman, while Amazon is understood to have outbid Sky for the exclusive rights to ATP World Tour coverage in the UK having previously won the streaming rights in the US for the NFL's Thursday Night Football.

In the UK, from 2019 the only live F1 TV coverage will come from Sky which has the exclusive rights until 2024.

Ignoring the fact that many simply don't want to give their hard-earned to the 'Dirty Digger' - as Private Eye so affectionately refers to Rupert Murdoch - the fact is that that many are unwilling or unable to pay. After all, F1 is not available as a stand-alone and in order to access it one has to buy the full sports package, meaning that in most cases for just 20 races a year fans are forced to pay for 12 months of football, rugby, cricket and various other sports they are probably not interested in.

Again, using the UK as an example, those unwilling or unable to pay for Sky have access to ten live events on Channel 4 with the remaining races shown later in highlight form. Quite how this will play out after Channel 4 loses its rights to the live races in 2019 remains to be seen.

All of which leaves F1 facing a conundrum, does it take the gamble and throw all the action behind a paywall such as Sky or, putting aside the live streaming issue, continue with a combination of pay-per-view and free-to-air.

Speaking to financial analysts Chase Carey admits the sport faces a dilemma.

"In terms of the television arena that we deal with, I guess the way to describe it is that there are three or even four potential arenas that we are engaged with," he said. "Traditional free, pay, digital, and then our own probably more direct 'over the top' product.

"To some degree what you have is conflicting goals across them," he admitted. "Probably the economic premium paid gets higher as you go up the ladder, but the reach gets less.

"We're trying to balance what is the right mix of reach and direct economic value," he continued. "Clearly there are impacts on other partners we have, for sponsors the fan engagement is obviously very important.

"For us the goal is to maximise long-term growth, not to find a short term pop," he insisted. "If you're energising the sport we want to make sure we continue to position it for long-term growth that finds a balance between that reach as opposed to just where you can get the biggest buck?"

Mindful of the threat from streaming and the like, he was keen not to sound as if the death knell was being sounded for traditional broadcasting of the sport.

"It's more and more heading to various forms of digital platforms," he admitted, "but I don't think it will happen as fast as some people think. Some habits die hard, and there is a value in volume and choice.

"On the programming side there's still value in reach. It's going there (digital), but it will take time. There's no question that there will be a lot more ways that content will continue to be offered to consumers."

Then again, other than looking at ways that content can be given (sold) to fans - and for the best price possible - the sport must work much harder on ensuring that that content is of value in the first place.

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READERS COMMENTS

 

1. Posted by MossMan, 20/08/2017 15:23

"If you ask me, all this is going to do is kill off the majority of the audience, get a small number of people to sign up but that audience will also shrink, while a much larger number (myself included) will find ways to stream it without paying.

(I have done this before when I was in a country with no terrestrial coverage...)"

Rating: Neutral (0)     Rate comment: Positive | NegativeReport this comment

2. Posted by Spindoctor, 18/08/2017 9:36

"It's all about the "Value Proposition".
20 pcm is far too much for a few hours of racing. Especially compared to BT Sport where you get the FULL MotoGP series, lots of other motor sport and some Premier League matches for less than a tenner. That's decent value in the context of Sky's 20+ pcm for F1. I know the "shows" last hours longer, but all the chit-chat bores the pants off me, especially when Eddie Jordan is involved. Analysis and comment are far better communicated via other means like Pitpass.

The main problem is the disconnect between the "product" Liberty bought (and overpaid for) and the one it wants to sell. An attempt to "Go It Alone" would most probably fail, as F1 needs more exposure to potential audiences, not less. If they are serious about gaining a mass audience, they'd be talking to Netflix & Amazon with a view to doing deals at a price people are prepared to pay.

"

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3. Posted by Jezzer, 17/08/2017 19:45

"Using Netflix as an example....a very good example....I pay 7.99 per month to get the whole catalogue when I want however many times I want. F1 seriously could not charge anything like that for a product that will have 20 new "shows" added every year!! Unless F1 improves a hell of a lot I personally won't pay anything let alone a Netflix priced product. Liberty are on to a loser. "

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4. Posted by the dodger, 17/08/2017 17:06

"I am with virgin and the price they want now I wont pay 22.00 to get F1 if it goes all pay I wont be watching it after more years than i will admit to."

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5. Posted by Rock Doc, 17/08/2017 13:46

"In Canada you can't get free to air TV any more. You have to sign up with a cable company to be able to get anything. Oh there are a handful of free channels but you still need a digital box to get them.

So I do get F1 and I don't have to pay an extra for sports channels. They do do sports packages but F1 isn't part of it. The bonus for me is that I get the UK commentary instead of the useless US Speed commentary which is enough to put anyone off the sport. If a race only has Speed then I turn off the sound.

My cable company tried to mimic NetFlix a few years ago with their own streaming service. It failed after 2 years and everyone went back to Netflix. I guess the moral is that people will only pay if they get something for it.

If F1 goes behind a paywall for everyone the racing will need to be interesting to people talking about it. Otherwise non-payers will not hear about it and those that are paying will drift away. Recent years have seen some good racing and bad. But I know that as a life long a fan. My kids get bored with it easily as they don't know the series in the same depth. All they want to see it close racing on the track, not the under-cut or over-cut or DRS. Get them interest for the whole race and you have a winner, pay-wall or no pay-wall. F1 is not there and I doubt it will be anytime soon.

If they try to suck F1 dry for every penny then F1 (as big as it currently is) will not be around much longer. They need to get the sport to be more engaging first, closer battles ON TRACK. If I had to pay extra on top of the cable at the moment I would have to say it isn't worth it, especially since I have to get up early for most races to watch it live. There are some tracks over recent years where it just isn't worth getting up at 2 am or 3 am anymore, so I don't.
"

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6. Posted by TedS, 17/08/2017 13:13

"I 'cut the cord' in the US where the only english broadcast of F1 is on pay tv (NBCSN for the most part). I record the GP on a little box with an Over the air Antenna in Spanish... for free. I still watch the race but don't get the commentary.. and I'm wondering if it is even worth it. I'd most likely pay by the season to have an on-demand stream of Quali and the Race."

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7. Posted by Mad Matt, 17/08/2017 11:32

"I would pay to stream F1, especially if it can be streamed at a time convenient to me. However I'm not willing to pay more than a fiver a month, after all I get Netflix's entire catalogue for under 10.

I think we need to be careful of aiming too much at kids, after all kids grow up and their habits change... just as ours did. My kids will watch stuff on their phones but much prefer to use the TV if I let them.

F1 needs close racing with overtaking and battles we can see on track. The aero needs to be fixed so cars can run close to each other. My kids find F1 boring but will sit and watch other formula where the cars are overtaking and occasionally tapping each other! That's what will increase audiences and up sponsor investment.

Sitting behind a pay wall stops a lot of people watching at all, stops people trying it out and so is counter productive in the end for a sport like F1.

Make it more interesting, as I say above and people will "tune in" and so sponsors will pay more.

As an aside I suspect Disney are going to be disappointed, I'm not going to stop paying Netflix over their withdrawal and I'm also not willing to pay Disney as well as Netflix."

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8. Posted by McMacca, 17/08/2017 10:59

"Ah but now SKY uk WILL sell the F1 channel as a standalone (from the sports anyway you still need a basic sky package). The price point 18 per month (216/year), too much in my opinion. Look at August - 1 race weekend, not good value. December / January /February - NO RACES, Not good value.
How about F1 follow disney and run their own service an price it properly say 10 per month?
Thoughts?"

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