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Will the UK's switch to Pay-TV ultimately prove costly for F1?

NEWS STORY
10/09/2018

As it stands, millions of F1 fans in the UK have just three more races which they can experience live and for free. Indeed, amidst speculation that the 2018 season title fight will go down to the wire, should that be the case they will have to rely on a highlights show later that day as the season finale isn't one of those three.

Currently, those millions of fans have just the Russian, Mexican and Brazilian rounds before, in 2019, all live coverage of F1 in Britain is shown on pay-channel Sky only.

While there is talk that the British Grand Prix - as one of British sport's 'crown jewels' will continue to be shown live - millions of F1 fans will either have to accept watching their sport in delayed highlights form or bite the bullet and sign up to Sky.

That said, many of those fans are unable or simply unwilling to pay for coverage, especially when it involves anything related to Rupert Murdoch.

Until 1996, fans in the UK had the BBC to thank for their coverage, but in a shock deal - that Murray Walker is understood to have heard announced over the radio - in 1997 commercial channel ITV won the rights before the BBC won them back in 2009.

A couple of years down the line however in 2012, the BBC sought to back out of its contract and as a result a deal was agreed which saw coverage shared with Sky, the pay channel getting all the races (and practice sessions) while the BBC was reduced to just ten.

2016 saw a similar deal agreed between Sky and Channel 4, however, behind the scenes Bernie Ecclestone was orchestrating a deal which would see Sky become the sole live broadcaster of F1 in the UK from 2019 until 2024.

While anyone who plays 'bullshit bingo' whenever Messrs Carey, Bratches or Brawn appear on their screens will be aware, the word 'fans' figures prominently, yet despite this the deal stands, and as a result those millions of fans face the loss of free live coverage in just a couple of months.

And of course, with the British Grand Prix currently set to disappear from the calendar after 2019 that takes care of the need to find a broadcaster to show that particular race for free.

The teams are also pretty good at 'bullshit bingo' but they too have said little about the deal, then again, when one considers that they share 68% of the sport's profits why would they, especially when the Sky deal from 2019 is thought to be worth around £150m a year.

However, in focussing on short-term gain, is the sport making a mistake given that the teams' sponsorship income is driven by exposure which could steadily decrease as more Pay-TV broadcasters come on board?

According to data obtained directly from BARB, which compiles audience measurement and television ratings in the UK, and which is jointly owned by the BBC, ITV, Channel 4, Channel 5, Sky and the Institute of Practitioners in Advertising, Channel 4 regularly attracts 2 - 3 million to its live race broadcasts.

At this point one should point out that other Sky channels such as Sky Sports Main Event, Sky Sports Mix and occasionally Sky One, also show F1 races, and consequently these stats are not reflective of Sky's total audience. We are using BARB's figures for the flagship Sky Sports F1 channel as it is guaranteed to show all races.

The figures are for the average audience of the live broadcast and showings within 7 days afterwards, either by recorded playback or video-on-demand.

In 2016, the British GP saw 695 thousand watch Sky Sports F1's live coverage of the race, while 2.53 million watched the race on Channel 4. Similarly, the season concluding Abu Dhabi Grand Prix, which saw Nico Rosberg claim the title, was watched by 2.35 million on Channel 4 while 622,000 watched on Sky Sports F1.

In 2017 and this year, the British Grand Prix saw 453 thousand (2017) and 475 thousand (2018) fans watch the race live on Sky Sports F1, while Channel 4 attracted 2.82 million and 2.87 million, respectively. Indeed, in the seven years Sky Sports F1 has broadcast the British Grand Prix live it has averaged 531,000 viewers while the BBC and Channel 4 averaged 3 million.

Anyone who thinks that these millions of fans are going to switch over to Sky next season may be interested in some prime real estate in the centre of London that's going cheap, but for a sport which in 2017 saw global TV audiences hit a 13-year low, this doesn't appear to be a good move.

To add to the conundrum, Disney is currently seeking to takeover Sky, though it faces stiff opposition from Comcast. Should Disney prove successful, in a move echoing the time Bill Ford was looking at his company's accounts and demanded to know who a certain Edmund Irvine was, the American noting that said Mr Irvine was the highest paid employee on the Ford payroll, the successful bidder in the Sky takeover may well ponder why the F1 coverage (which includes the UK and Italy) is thought to be amongst Sky's biggest expenses, especially when Disney-owned ESPN is believed to broadcast it for free.

As Liberty ponders budget caps, engine rules, glamour and parties, it would do well to note the impact the move to Pay-TV is already having in Italy and Brazil, and at a time viewer numbers have fallen by 41.3% over the last decade.

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READERS COMMENTS

 

1. Posted by Lancelot37, 25/09/2018 20:59

"In my 80s now and there is no way that I will pay extra to watch F1 after being a fan since I was much younger. I will suffer, but Liberty will suffer even more. They shoud take note the loss of 41.3% of viewers in Italy & Brazil."

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2. Posted by MossMan, 13/09/2018 17:00

"@ Ubarrow - you hit upon something I mentioned in the new thread about the C4/Sky deal... why are sports results a normal part of news broadcasting?

I'm not being facetious - I genuinely do not understand why they report sports results all the [expletive] time!

1) In the "old days" you would have no other means to get the results than through broadcast media. In those days, it made sense. Nowadays, if I want to look up a result I can do that instantly on my phone. Sports on the news does not fill a need as far as I can see.

2) On the days when I am not able to watch the F1 live, as a fan I do *NOT* want to hear the result until I have had a chance to catch up (online or on a recording). Yet I keep getting it thrust in my face totally unsollicited! Driving home with the radio on? "News" will inevitably come on following a song I'm listening to and - if something interesting happened - they will immediately announce it as a headline before I even get a chance to hit mute. Same if the TV is on a "news" channel.

Personally I have no interest in football or whatever, but I can imagine that a real fan of that type of sport might also be faced with the same problem. Sports results are just not news in my opinion! If its a sport I'm not interested in, it's just a boring waste of my time. If it's a sport I *am* interested in then I will go find out in my own time!

I really, really wish that the broadcase media would put sports results in it's own show, completely seperate from the news so I never have to see it!"

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3. Posted by vins0n, 12/09/2018 11:30

"It's taken a while but I've gotten used to the fact that I won't be watching it next year and given that my interest has waned. I used to be excited and watch from start to finish. Now I switch off after the race has finished as the post show tends to be repetitive and boring.

One thing I won't miss are the godawful new graphics and sounds.

I guess the viewing drop will affect pitpass as well. What are you expecting? "

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4. Posted by LukeP, 11/09/2018 14:28

"If there is highlights coverage that is fine by me! Great for the snooze-fests that are sadly quite common. If no highlights, the Sky coverage is unfortunately just way too much. Wouldn't mind some Netflix-level payment but Sky is way more than this."

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5. Posted by Ubarrow, 11/09/2018 10:19

"I’m not going to take ou a Sky sub just to watch F1 although I’d pay, say, £30 for the season. The problem with highlight shows is that its almost impossible to be unaware of the result before watching. This could be the beginning of the decline...."

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6. Posted by gasconboy, 10/09/2018 15:48

"Did anybody watch the excellent racing from the "Revival" at Goodwood ?? This is what racing should be about. I have been following Grand Prix F1 since Moss followed Fangio on M/Benz.
It is interesting that so many fans of today enjoy the traditional circuits over the new ones and for spectators perhaps Paul Ricard reached an all time low with more run off areas than track and the paying public almost in the next departement.
As you can tell I am a pensioner so Sky prices are out of the question, I might reconsider if all the races were exciting like the historic races.
Here is a thought that won't happen but why not put the first 6 finishers of the F2 race on the back of the grid?? There is also more excitement at WEC races with 4 different categories and lots of overtaking but in general not too many spectators except "Le Mans""

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7. Posted by Ro, 10/09/2018 15:37

"Do be quite honest, I have been listening to Radio 5 Live broadcast on the web and then watchimh it on the TV if the race merits watching it. I will never pay for it. Pitpass is very informative so my word to SKY is "stick it up your ***e""

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8. Posted by Spindoctor, 10/09/2018 14:54

"I am probably not alone inasmuch as I really don't mind paying up-front for decent F1 coverage.
I already pay for Netflix & Amazon, as well as BBC and I'm reasonably content to do so.
What I am not, and will never be content to do is to pay the "Murdoch Tax". Irrespective of my (poor) opinion of the man & his media "empire"; Sky is quite simply too expensive.

However, the big problem is that F1 itself is no-longer that compelling. Compared to MotoGP the whole circus is bloated and pretentious. The racing is mediocre at best, enlivened only when accidents & "incidents" mix things up a bit.
That's not to say it has no value, simply that it really isn't as valuable a property as the F1 hierarchy would like us to believe.

So its really up to Liberty now. I'l pay a reasonable price for streaming F1, otherwise I'll simply not bother.
"

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9. Posted by Simon in Adelaide, 10/09/2018 14:00

"Welcome to viewing life in Australia where the F1 following is much smaller than that for V8 Supercars, I pay or Foxtel (Sky) because I can.
Can people explain why they have this sense of entitlement, that their sport should be free-to-air. A non-enthusiast would have every right to query why a rich elitist borefest should be allowed to occupy important reality tv time, it's all a question of perspective.
"

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10. Posted by GrahamG, 10/09/2018 13:46

"I certainly won't be paying to watch it - it's not even good value "free to air". Totally artificial now, race results are no reflection of driver talent, car speed or innovation. They have all been ruthlessly eliminated from the "sport" in the name of "the show" "

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11. Posted by Canuck, 10/09/2018 13:41

"What does F1-TV offer? Does it offer live broadcast? Apart from boxing, what other sports are only available through a User Pay Channel? Maybe those can provide lessons to FOM"

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12. Posted by JogonUK, 10/09/2018 12:48

"Regardless of the specifics of who owns/bought/sold of which none matters when making a choice on how you as the individual wish to watch Formula 1, it is simply a real easy couple of questions, 1:/ How serious is your enjoyment of armchair F1? and 2:/ How much are you wanting to spend to continue that enjoyment?

I've followed F1 for 30 years, having visited many of the tracks both past and present, (Spa and Monaco being my favourites),in the last decade or so I've enjoyed watching via UK terrestial, both full races and highlights (if the full race was not available) and on the odd occasion i've watched Sky's coverage when at a friends.

The dynamics of F1 have changed (no sh*t sherlock) and I have found myself switching off/muting all the hype before and after the race, I enjoyed the press conference after the race but thats about it for me, I loathe the new (not quite so new now) of the Podium Interviews, I get why they do it, but it's mostly cringe worthy chats that frankly make my stomach churn...

But I digress, I watch F1 because I enjoy the sport but the deals between the BBC and Ch4 and then Ch4 with their splitting coverage and then getting into bed with Sky with some races becoming highlights, well it helped wean me off the need to see every race from grid to chequered flag.

Would I be the same if it's altogether removed from terrestial? I could live without it, I can read, there are plenty of sites (PitPass being one of them) where I can get my daily fix....I would most certainly miss my F1 but these days it's not something that consumes me as it once did, be that due to age or simply because over time I've had to reduce my intake through not wanting to add to the coffers of the Murdoch empire...

RiP F1 ..."

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13. Posted by FQITW, 10/09/2018 11:55

"“Indeed, in the seven years Sky Sports F1 has broadcast the British Grand Prix live it has averaged 531,000 viewers while the BBC and Channel 4 averaged 3 million.”

The worrying thing now is that lets say, for instance, out of the 3 million that now watch for free, one hundred thousand defect to SKY.

SKY will be making so much money they won’t give a flying fart about the rest of the fans or anybody else.

This is why this decision will never be changed and will only encourage other Pay companies to come along.

I do hope CVC and Bernie are really happy counting the money they took out of this deal under their umbrella excuse of doing their best for the shareholders - not their fault at all - just following orders.

And as the teams argue over spending cuts whilst continuing to waste ridiculous amounts of money on aero and ‘motor homes’, they can rest easy knowing they are also to blame by sharing the extra money raised (to pay for the above) by denying the millions of fans who have supported them over the years the chance to actually watch their teams in action.

It’s the ultimate kick in the nuts-isn’t it?
"

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14. Posted by Greg, 10/09/2018 10:57

"There is always the internet channels that stream it, although illegal. "

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15. Posted by Optimaximal, 10/09/2018 10:01

"It's worth adding that the article speculates that fans will be able to continue to watch highlights FTA. Whilst the contract apparently states that Sky need to make highlights available on a channel with '90% technical availability' I don't believe it states that there needs to be any book-ending, analysis or even commentary.

In an ideal world, they'll keep the entire C4/Whisper team doing pure highlight shows, but then why would they want to make their expensive product continue to look bad next to the free option?"

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