Grand Prix Rejects

http://www.vivaf1.com/blog/?p=12627

An interesting read, though I would take their numbers with a pinch of salt until we see them at a different source.

A drop in viewing figures is not entirely unexpected, with stiff competition from the Olympics and the Euros pulling casual viewers away, but what I found interesting was just how low sky's numbers were.

The optimist in me hopes that the numbers don't add up for sky, but I fear that they will see this as an incentive to get exclusive coverage once the current BBC deal runs out.

BBC's viewing of the German GP beaten by golf? Ouch.

Fascinating stuff, and really interesting to see that a calender with fewer events, but all live and on free-to-air, would be more attractive to sponsors than a larger calender with it split between subscription and FTA. I suspect Sky will see the F1 as a loss leader that can easily be made up from other areas of the business such as their football coverage, and so the low viewing figures may not be a problem. In the long term though that might not be the case.

We'll see one of two things happen - Sky will flex their muscles and try and get exclusive rights to all live races, or at some point the channel will go to the wall and it will all return to FTA. The most likely of the two will be the first outcome, but if football eventually hits the skids and goes belly up (which I can personally see happening at some point) then perhaps the financial position of Sky will become untenable.

AndreaModa wrote:Fascinating stuff, and really interesting to see that a calender with fewer events, but all live and on free-to-air, would be more attractive to sponsors than a larger calender with it split between subscription and FTA. I suspect Sky will see the F1 as a loss leader that can easily be made up from other areas of the business such as their football coverage, and so the low viewing figures may not be a problem. In the long term though that might not be the case.

We'll see one of two things happen - Sky will flex their muscles and try and get exclusive rights to all live races, or at some point the channel will go to the wall and it will all return to FTA. The most likely of the two will be the first outcome, but if football eventually hits the skids and goes belly up (which I can personally see happening at some point) then perhaps the financial position of Sky will become untenable.

Free to air has the major advantage of opening up the broadcast to casual fans and those who only want to watch a handful of races, so it is not at all surprising that the limiting of free to air coverage has severely dented viewer figures. Even if these figures are subject to some revision, the general trend does seem to be downwards (F1Fanatic had a similar article midway through the season that also showed the same trend), which is going to be a cause for concern for the major sponsors of the teams.

FOM and the teams might be making more money in the short term from Sky's eagerness to break into this market, but I'd argue that this is pretty damning for the long term view. With the general shift away from free to air to subscription models, you are effectively locking yourself into the existing group of hard core fans - why would a casual fan of the sport want to buy a subscription if he only wants to see the occasional race?
I imagine that, for now, that is compensated for by the fact that the global viewing figures are still relatively strong - but given that most of the revenue and viewers of the sport come from within Europe, the very market that is being squeezed hardest by the move to subscription models, I only feel that this is going to cripple the sport in the longer term.
Where are the next generation of fans going to come from if they are effectively denied access? Anecdotally, the impression you get from those attending the races in person is that the crowds in attendance are mostly middle aged, mainly because they are the only ones with enough disposable income and interest to actually attend in person - something which cannot be good for the long term health of the sport.

mario wrote:
FOM and the teams might be making more money in the short term from Sky's eagerness to break into this market, but I'd argue that this is pretty damning for the long term view. With the general shift away from free to air to subscription models, you are effectively locking yourself into the existing group of hard core fans - why would a casual fan of the sport want to buy a subscription if he only wants to see the occasional race?
I imagine that, for now, that is compensated for by the fact that the global viewing figures are still relatively strong - but given that most of the revenue and viewers of the sport come from within Europe, the very market that is being squeezed hardest by the move to subscription models, I only feel that this is going to cripple the sport in the longer term.
Where are the next generation of fans going to come from if they are effectively denied access? Anecdotally, the impression you get from those attending the races in person is that the crowds in attendance are mostly middle aged, mainly because they are the only ones with enough disposable income and interest to actually attend in person - something which cannot be good for the long term health of the sport.

This is exactly my position. The whole problem reminds me of what happens in internet places that, for some reason, don't have new people joining. For example, in the case of F1 forums, I know of the F1 On Board forums, or the Farzad F1 Gallery boards. A lot of people visited these two pages main sites because they hosted a lot of F1-related videos, but one day, they were forced to remove the video content by the FOM, and the number of visitors dropped. As very little or no new people join, and the older people start leaving, the flux of information stagnates and progressively less and less people remain. And this could very well happen to F1, 10 or 20 years from now.

Ferrim wrote:This is exactly my position. The whole problem reminds me of what happens in internet places that, for some reason, don't have new people joining. For example, in the case of F1 forums, I know of the F1 On Board forums, or the Farzad F1 Gallery boards. A lot of people visited these two pages main sites because they hosted a lot of F1-related videos, but one day, they were forced to remove the video content by the FOM, and the number of visitors dropped. As very little or no new people join, and the older people start leaving, the flux of information stagnates and progressively less and less people remain. And this could very well happen to F1, 10 or 20 years from now.

This might change the picture, however, if it comes to pass...

dr-baker wrote:

Ferrim wrote:This is exactly my position. The whole problem reminds me of what happens in internet places that, for some reason, don't have new people joining. For example, in the case of F1 forums, I know of the F1 On Board forums, or the Farzad F1 Gallery boards. A lot of people visited these two pages main sites because they hosted a lot of F1-related videos, but one day, they were forced to remove the video content by the FOM, and the number of visitors dropped. As very little or no new people join, and the older people start leaving, the flux of information stagnates and progressively less and less people remain. And this could very well happen to F1, 10 or 20 years from now.

This might change the picture, however, if it comes to pass...

Bernie getting ousted has all sorts of implications...

Other forms of motorsport allow for their content to be uploaded to Youtube, IndyCar started doing that to great effect, and NASCAR clearly doesn't care if fans upload races to Youtube either. V8 Supercars started doing live streams on YouTube, and as someone that doesn't get those live, it was GREAT to be able to catch this year's V8 season by watching the races on Youtube.

In other words, if F1 doesn't do this to some extent, it's suicidal.

Very interesting reading.

I would like to know what does this mean for the F1 teams and FOM. Maybe - just maybe - they can make more money from the current situation than from a freeview - it's possible, I wouldn't rule it out. What I'd like to know is at which point the lost revenue from sponsors is bigger than the increase in revenue from paying viewers.

Cynon wrote:

dr-baker wrote:

Ferrim wrote:This is exactly my position. The whole problem reminds me of what happens in internet places that, for some reason, don't have new people joining. For example, in the case of F1 forums, I know of the F1 On Board forums, or the Farzad F1 Gallery boards. A lot of people visited these two pages main sites because they hosted a lot of F1-related videos, but one day, they were forced to remove the video content by the FOM, and the number of visitors dropped. As very little or no new people join, and the older people start leaving, the flux of information stagnates and progressively less and less people remain. And this could very well happen to F1, 10 or 20 years from now.

This might change the picture, however, if it comes to pass...

Bernie getting ousted has all sorts of implications...

Other forms of motorsport allow for their content to be uploaded to Youtube, IndyCar started doing that to great effect, and NASCAR clearly doesn't care if fans upload races to Youtube either. V8 Supercars started doing live streams on YouTube, and as someone that doesn't get those live, it was GREAT to be able to catch this year's V8 season by watching the races on Youtube.

In other words, if F1 doesn't do this to some extent, it's suicidal.

Which is why it is worrying that figures like Luca di Montezemolo seem to have failed to grasp that notion when they've criticised the promotion of the sport, such as when he suggested shortening the races. As with quite a few other parts of life, the larger issue with younger fans not engaging with the sport is the accessibility of it, and the service they are receiving - the more that organisations like FOM clamp down on Youtube and restrict access in general to their material, the more likely it is that those who have started to show interest will simply go "Why bother?" and go elsewhere. It isn't so much the races themselves - because, if what you are watching is fascinating enough, few would care about the length of the race - but the way that they are presented to the public that is the issue, yet few seem to be prepared to address that point.

For a start, why hasn't FOM opened up more access to additional content during the current races more often? OK, they do sometimes do so for the official race edits that they upload to Youtube, and there can be some fascinating moments in those clips (from unheard radio calls that put a different perspective on what we saw happening on track, to little moments like Vettel giving Schumacher a thumbs up as he passed him for 6th in Brazil). It is something that they are now beginning to do, but even so they are doing so in a somewhat begrudging manner.
Even more of a treasure for motorsport enthusiasts would be the archive footage that FOM has - the makers of the Senna biopic hinted that they had barely scratched the surface of what FOM has in its archives - opening up access, rather than locking it down, would go a long way in terms of self promotion for the sport.

CarlosFerreira wrote:Very interesting reading.

I would like to know what does this mean for the F1 teams and FOM. Maybe - just maybe - they can make more money from the current situation than from a freeview - it's possible, I wouldn't rule it out. What I'd like to know is at which point the lost revenue from sponsors is bigger than the increase in revenue from paying viewers.

The figures that have been bandied about for now suggest that the net revenue that FOM, and therefore the teams, are receiving from the Sky-BBC deal is more profitable at the moment; in addition to this, for the short term the teams have probably locked their sponsors into multi-year deals that mean that they are locked into certain payment schedules.

Moreover, although the relative disposable income of those in the UK makes it a reasonably attractive market, losing viewers in the UK could be offset if viewers are being gained elsewhere. The fact, though, that most of the other European nations where a hybrid subscription model has been tried seems to have caused a drop in viewing figures should be a warning sign to those in charge that the longer term picture isn't necessarily healthy - a few of the smaller sponsors appear to have withdrawn from the sport (even from some of the relatively high profile teams like Ferrari and McLaren), and there have been a few whispers that a few major sponsors are considering following suit (there have been rumours that Vodafone might withdraw from the sport once their contract with McLaren comes to an end).

A very interesting insight.

I don't see it as particularly surprising for Sky to have very few viewers, especially with the general backlash against Sky as a company in Britain in the past year or so. But average audience level, 0.6 million, is quite a shock. Blocking the BBC getting races like Monaco would be an obvious reaction to try and boost viewership for Sky. We'll see how it all pans out.

As for the long term view, I agree it isn't going to be good for F1. Despite the growth of internet viewing TV still remains 'king' due to the ease of access; sponsors still want TV viewers above other media. This is especially true with FOM's locked down view of footage... I love the fact I can view whole V8 Supercar or IndyCar races on youtube when I want; I've experienced a few issues with BBC iPlayer sometimes.

But, above all else in my opinion, the most damaging aspect of FOM's attitude to new media is the failure to embrace the history of Formula 1. Put simply, the rich history of Grand Prix motorsport is something that helped establish me as a fan of the sport versus other series, and view it as the top of the tree. But it seems they're ignoring the past. To a new fan it might like the current F1 is just a glitter ball flash-in-the-pan, rather than one of the world's most enduring sporting competitions complete with legends and folklore. This is where IndyCar is getting it right, even if embracing their history highlights the current struggles the series faces....

I apologise if the above paragraph doesn't make much sense, I can't really express my emotions when it comes to F1 well. I've only just returned to watching current races after switching off with DRS/Sky debacles. Having grown up revering F1 in all it's glory, actions by the sport today feel like the girlfriend you love to ends of the earth, but always cheats and hurts you.

Anyways, I'd like to compare the British viewing figures with those for the BTCC. And while we're at it, how about Sky's IndyCar coverage.....

HonoraryNortherner wrote:A very interesting insight.

I don't see it as particularly surprising for Sky to have very few viewers, especially with the general backlash against Sky as a company in Britain in the past year or so. But average audience level, 0.6 million, is quite a shock. Blocking the BBC getting races like Monaco would be an obvious reaction to try and boost viewership for Sky. We'll see how it all pans out.

As for the long term view, I agree it isn't going to be good for F1. Despite the growth of internet viewing TV still remains 'king' due to the ease of access; sponsors still want TV viewers above other media. This is especially true with FOM's locked down view of footage... I love the fact I can view whole V8 Supercar or IndyCar races on youtube when I want; I've experienced a few issues with BBC iPlayer sometimes.

But, above all else in my opinion, the most damaging aspect of FOM's attitude to new media is the failure to embrace the history of Formula 1. Put simply, the rich history of Grand Prix motorsport is something that helped establish me as a fan of the sport versus other series, and view it as the top of the tree. But it seems they're ignoring the past. To a new fan it might like the current F1 is just a glitter ball flash-in-the-pan, rather than one of the world's most enduring sporting competitions complete with legends and folklore. This is where IndyCar is getting it right, even if embracing their history highlights the current struggles the series faces....

I apologise if the above paragraph doesn't make much sense, I can't really express my emotions when it comes to F1 well. I've only just returned to watching current races after switching off with DRS/Sky debacles. Having grown up revering F1 in all it's glory, actions by the sport today feel like the girlfriend you love to ends of the earth, but always cheats and hurts you.

Anyways, I'd like to compare the British viewing figures with those for the BTCC. And while we're at it, how about Sky's IndyCar coverage.....

The IndyCar coverage is abysmal in the US outside of the Indy 500 so I would expect terrible numbers in the UK as well. The difference is that IndyCar is willing to release footage on the internet and may grow. FOM wants to force it to TV only. One can presume IndyCar may ultimately win in the end in the future if FOM doesn't change it's view especially if the dramatic Indy 500 finishes of the last decade continue in the future every few years. (J.R. Hildebrand crashing in turn 4 and Dan Wheldon passing for the win and Takuma Sato's attempt to pass and crash this year in particular).

JeremyMcClean wrote:BBC's viewing of the German GP beaten by golf? Ouch.

Not just plain old "golf" though, the oldest championship in the world. It's history gives it a lot of draw. That said, I didn't watch a minute of it, though I normally would. Also, I don't know how they can correct for availability of DVRs and their effect on actual numbers of viewers.

Row Man Gross-Gene wrote:

JeremyMcClean wrote:BBC's viewing of the German GP beaten by golf? Ouch.

Not just plain old "golf" though, the oldest championship in the world. It's history gives it a lot of draw. That said, I didn't watch a minute of it, though I normally would. Also, I don't know how they can correct for availability of DVRs and their effect on actual numbers of viewers.

Also it was the end of the Tour de France on that sunday so many people were probably watching Wiggo.

zantkiller wrote:

Row Man Gross-Gene wrote:

JeremyMcClean wrote:BBC's viewing of the German GP beaten by golf? Ouch.

Not just plain old "golf" though, the oldest championship in the world. It's history gives it a lot of draw. That said, I didn't watch a minute of it, though I normally would. Also, I don't know how they can correct for availability of DVRs and their effect on actual numbers of viewers.

Also it was the end of the Tour de France on that sunday so many people were probably watching Wiggo.

Actually [papay shield enabled] I was watching the Tour de France instead of the German GP that weekend. Not because I'm a Wiggins fan, but the TdF is something I've been following for many years and I wanted to see Thomas Voeckler through to the finish line and his first TdF jersey.

However way you look at it the viewing figures for SKY are appalling. Sure there were other major sporting events going on last year but, olympics aside, thats true for every year - theres always some championship going on somewhere with bat, ball or bike. Im sure they're hoping for improvements as the fanbase develops but I think their best chance to attract new subscribers was with the initial big splash they made last year. Also, reports like this are hardly likely to get people beating a path to their door, money in hand.

This SKY business may even end up as just a passing phase for F1, like manufacturer teams or grooved tyres, eventually things will get back to the way things were.

CoopsII wrote:This SKY business may even end up as just a passing phase for F1, like manufacturer teams or grooved tyres, eventually things will get back to the way things were.

And that would hopefully force Bernie's "pay TV is the future" project to be reviewed. In here, where we have been seeing F1 through pay TV for about 5 or 6 years, people don't know anyone else beyond Vettel, Hamilton and Alonso (except hardcore fans who seem to be rarer than a flying unicorn). What's worse, they are losing long time fans like my father who, when the Spanish GP happened and asked me who won, replied "Who's that?" to my answer. One doesn't need to be too bright to guess that F1 won't do well when hardly anyone is seeing it...

DanielPT wrote:And that would hopefully force Bernie's "pay TV is the future" project to be reviewed.

Well, to be honest this is one just one of Bernie's "justification shockers", as I think I will call them from now on: when he doesn't quite get what he wants he calls what he got what he wanted to get. After all, Ecclestone is not stupid: he knows that Pay TV alone has the problems you and other mentioned, whilst still offering a lot of dash. If he could get his way, every country in the world would run the German system: one private ad-funded channel having the main gist and one pay TV channel offering the goods (Free Practices, no ad breaks etc.) - that way Bernie earns double money, introduces new fans to the sport and, well, gets double money. Oh, did I mention he'd get more money out of that?

Since, however, the British private channels are unwilling/unable to pay and the BBC is too busy challenging those private channels to pay up, he has to give most of F1 to Sky and since we can't have Bernie losing, Bernie claims that that is what he would like to see in the future. This is proven rather easily when one reminds himself of the fact that it was the BBC asking Bernie to change the deal and not vice-versa

CoopsII wrote:This SKY business may even end up as just a passing phase for F1, like manufacturer teams or grooved tyres, eventually things will get back to the way things were.

Depends really on how the pay TV business develops: if it goes, you are right. If it is here to stay, well then F1 won't be leaving it anytime soon. It brings in the money and as one of the big three life lessons tought to me by the Tekken series is that an evil businessman will always be succeeded by an even more evil businessman Ecclestone's successor will not be inclined to stop any deals with Pay TV if Murdoch doesn't surrender.