F1 facing Pay-TV conundrum

17/08/2017
NEWS STORY

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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Published: 17/08/2017
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