F1 & TV rights - what does the future hold?

[Robem64]

Interesting article on the direction this might be going - and the consequences.

http://www.bbc.co.uk/sport/formula1/42816877

[Monty]

I have always felt that restricting 'free' viewing of F1 would be bad for sponsors and therefore, ultimately bad for F1. However, I had no idea of the numbers involved. The UK figures quoted in this article discuss an 80% drop in viewers but the actual numbers are somehow more startling - 3.1 million dropping to 652,000.
Can you imaging the suits holding the marketing budget looking at this - "so in 2015 our brand name was being seen by over 3million people in the UK and now it will be seen by under 700,000; if the car keeps going and actually gets picked up by the cameras. And they want how much??"

[lkjohnson1950]

If I have to subscribe to a pay per view, I'll watch something else. I expect I will be watching much less F1 this year because of the change in coverage anyway.

[Jericoke]

This comes back to how F1 is operated.  There is the FIA, there is FOM, and there are 10 teams.  All of them need money to operate.  All of them want more money.  All of them want as much money as possible.  It puts them into direct competition, as any money going to the FIA means it is not going to the FOM, nor any of the 10 teams, similarly with money going to FOM and each of the 10 teams.

FOM's original job was to create the maximum amount of money possible, ensuring that the FIA and teams get their fair share.  Now I feel like FOM's main purpose is to make money for its owners, rather than the teams. I can understand how this happens, and I can appreciate that people want to make money.

While I understand that the EU has (weird to me) rules about sports organizations and governing bodies being different entities, there is no need for the teams to be separate from the sports organization.  I'd like to see the teams become franchises of FOM.  They would still be owned by their respective owners, but the FOM would have far more control over the teams.  FOM itself would then answer to the franchise owners.  Instead of looking out for 11 self interests, suddenly 11 are working as a team with collective interests.  Maximizing viewership to bring in sponsors might make more sense than maximizing broadcast rights.  Or it might not, but they would make that decision collectively.

[Jericoke]

If I have to subscribe to a pay per view, I'll watch something else. I expect I will be watching much less F1 this year because of the change in coverage anyway.

Canadians have had to pay for F1 coverage since the 90s.  Americans for longer I believe.  I find it hard to believe we're more passionate F1 fans than English or Italian viewers.

[cosworth151]

OTT isn't working that well for major sports here in the States. The once-powerhouse NFL has suffered steadily declining ratings for several years now. It hasn't done much for MLB (Major League Baseball), either. It has worked for ultimate fighting, but it's a comparatively small sport that has been mostly pay per view, anyway.

A similar scheme has made me finally give up on the WEC. The only WEC race I've watched in two years has been LeMans, and that was on free internet.

[Ian]

I've already stated that 2018 is my last season watching F1. When it was on the BBC I used to get up for all the early ones but I ain't gonna get up early in the hope of a good stream(if there are any). One thing did make me chuckle and that was the idea on an occasional music soundtrack during the race. Who wants to listen to music when watching F1?

[Scott]

Judging by the amount of ads sold by RTL during a GP, I suspect their deal is already eye watering.  Switzerland wasn't mentioned in the article, maybe because Sky hasn't yet got a toehold in Switzerland, so they have no way to pry the broadcast from the national broadcaster SF, which shows it essentially ad-free (ads before and after or during race stoppages, but only 3/4 screen with a 1/4 window showing the live feed for most).  I've recently discovered that there is a TV fee in Switzerland similar to that of the UK, but it is buried in our local taxes. 

They are holding a referendum next month to abolish it and let the national broadcaster languish in the commercial landscape, but I am voting to keep the fee/tax.  It's insignificant considering the quality and diversity of the broadcasts it provides across 5 channels.

I think TV broadcasts will be dead fairly soon anyway, and even Sky will struggle to stay ahead of streaming channels and services which will very quickly overtake cable TV.  There will be paywalls, to be sure, but they won't be able to charge anything close to what Sky wants to charge.  It will be as big a change as that which hit the music industry as it went from selling CD's to digital and streams for a LOT less money.  Once they realise that OTT makes the value of onscreen sponsorship much more important than rights fees, then they can focus once again on increasing the audience, which should be more important than the broadcaster anyway.

[Alianora La Canta]

While I understand that the EU has (weird to me) rules about sports organizations and governing bodies being different entities, there is no need for the teams to be separate from the sports organization.  I'd like to see the teams become franchises of FOM.  They would still be owned by their respective owners, but the FOM would have far more control over the teams.  FOM itself would then answer to the franchise owners.  Instead of looking out for 11 self interests, suddenly 11 are working as a team with collective interests.  Maximizing viewership to bring in sponsors might make more sense than maximizing broadcast rights.  Or it might not, but they would make that decision collectively.

Most of the team bosses, for historical reasons, are too independent-minded to go for a franchise concept. Half of them have already nearly had to bail their teams out of F1 once to stop the FIA and FOM from doing something that would probably have ended F1; there's not as much confidence as Liberty would like that such a step would not be needed again.

As for " I find it hard to believe we're more passionate F1 fans than English or Italian viewers..." ...North Americans have typically had much more penetration of pay TV than in Britain, and I'm not sure that 20 races is going to cost quite so much.

For example, the cheapest way to watch F1 in the USA next year is the ESPN standalone service. This is $20/month or $240 per year. Even someone on minimum wage will manage to cover that cost in under 30 hours (the least I could consider a full-time working week). Granted, this is only via the internet and it will cost more on cable if taking/obliged to take other channels with it. However, this is not even an option in the UK; there, the only choice is the "over TV and bundled with lots of other channels" method:

TV licence: £155
Sky basic platform: £20/month - £480
Sky Sports F1 extension: £18/month - £216 (though Sky allows the channel to be swapped in months where there is no F1, it cannot be dropped during the winter - at least in theory)

Total cost to someone like me who doesn't have their own TV and has been told their parents can't afford pay TV: £851 per year.

I would have to work for just over a month to earn that much money. There's F1 support, and there's spending over 1/12th of one's income simply on getting the broadcast. At that point, it would be cheaper for me to simply go to a couple of foreign Grands Prix, watch the British Grand Prix (because of legal requirements, that has to be shown on some sort of free-to-air channel) and call it good. (Thanks to Twitter and BBC Radio, I can do even better than that, at least in 2019 and 2020.)

At some point in the pricing, refusing to pay stops being about not supporting a sport and starts being about recognising there are better ways to support it than the one it has traditionally preferred.

[Robem64]

I personally refuse to sign up to Sky Sports on a contract basis purely to have F1 channel........given my wife and I both watch the racing then I simply buy a Sky Sports day pass with NowTV for race day. £6.99 for two of us to watch the live race ain't too bad.

[Jericoke]

While I understand that the EU has (weird to me) rules about sports organizations and governing bodies being different entities, there is no need for the teams to be separate from the sports organization.  I'd like to see the teams become franchises of FOM.  They would still be owned by their respective owners, but the FOM would have far more control over the teams.  FOM itself would then answer to the franchise owners.  Instead of looking out for 11 self interests, suddenly 11 are working as a team with collective interests.  Maximizing viewership to bring in sponsors might make more sense than maximizing broadcast rights.  Or it might not, but they would make that decision collectively.

Most of the team bosses, for historical reasons, are too independent-minded to go for a franchise concept. Half of them have already nearly had to bail their teams out of F1 once to stop the FIA and FOM from doing something that would probably have ended F1; there's not as much confidence as Liberty would like that such a step would not be needed again.

As for " I find it hard to believe we're more passionate F1 fans than English or Italian viewers..." ...North Americans have typically had much more penetration of pay TV than in Britain, and I'm not sure that 20 races is going to cost quite so much.

For example, the cheapest way to watch F1 in the USA next year is the ESPN standalone service. This is $20/month or $240 per year. Even someone on minimum wage will manage to cover that cost in under 30 hours (the least I could consider a full-time working week). Granted, this is only via the internet and it will cost more on cable if taking/obliged to take other channels with it. However, this is not even an option in the UK; there, the only choice is the "over TV and bundled with lots of other channels" method:

TV licence: £155
Sky basic platform: £20/month - £480
Sky Sports F1 extension: £18/month - £216 (though Sky allows the channel to be swapped in months where there is no F1, it cannot be dropped during the winter - at least in theory)

Total cost to someone like me who doesn't have their own TV and has been told their parents can't afford pay TV: £851 per year.

I would have to work for just over a month to earn that much money. There's F1 support, and there's spending over 1/12th of one's income simply on getting the broadcast. At that point, it would be cheaper for me to simply go to a couple of foreign Grands Prix, watch the British Grand Prix (because of legal requirements, that has to be shown on some sort of free-to-air channel) and call it good. (Thanks to Twitter and BBC Radio, I can do even better than that, at least in 2019 and 2020.)

At some point in the pricing, refusing to pay stops being about not supporting a sport and starts being about recognising there are better ways to support it than the one it has traditionally preferred.

I'm just saying that given both Canada and the USA run successful F1 races, despite having pay TV requirements, means to me paying to watch F1 won't automatically kill it. 

Of course there is a price limit.  Finding it is risky, like any business venture.

[Dare]

I already have ESPN so it helps me. $20 a month plus many
other channels as well

[Ian]

Jeri, it's not about whether Americans or Canadians are more passionate about F1, the cost of adding sky sports to my Virgin package is about £35 a month and you can't just purchase Sky F1, you have to have the whole lot, and as the only other sport I like is rugby union which I get on BT sport and that comes free with my package so I'd end up paying for all the football ones too which I'd never watch as I can't stand football. The £35 is a quarter of my weekly pension which is needed for other things. Not having a pop at you, just explaining the reason.

[Jericoke]

Jeri, it's not about whether Americans or Canadians are more passionate about F1, the cost of adding sky sports to my Virgin package is about £35 a month and you can't just purchase Sky F1, you have to have the whole lot, and as the only other sport I like is rugby union which I get on BT sport and that comes free with my package so I'd end up paying for all the football ones too which I'd never watch as I can't stand football. The £35 is a quarter of my weekly pension which is needed for other things. Not having a pop at you, just explaining the reason.

I agree with your point that there is such a thing as too much.

The article is written with the idea that any pay TV is too much and will crush all live racing.

The analogous situation here in Canada is NHL ice hockey coverage.  One company has control over 'out of market games'.  That is, you can probably watch your local team at low or even no cost, and a few weekly 'national' games.  An average week has about 40 games, and you can have maybe 5 for free.  All the other games are only available if you subscribe to one particular telecommunications company (which, incidentally, isn't available nationally).

[Alianora La Canta]

I don't think live races are necessarily crushed by pay TV - in fact Malaysia refused to broadcast their own home race (on any channel) one year in a (largely successful but banned for subsequent use by Bernie) attempt to increase their live attendance.

The trouble is that in such a situation, the live attendees then don't follow the F1 racing otherwise; they switch to other series that are easier to follow. The near-ubitiquity of some sort of pay TV in the USA probably helps that situation in that country, but most other countries do not have that situation, and a global TV orientated on pay seriously damages the global audience.