56 replies to this topic

[Thomas99]

 I see these rules basically trying to 'give fans what they want' and lets be fair, most of the recent changes to the sport have been for the better. This year the cars are following much closer and the racing itself is great, the qualifying format works with two runs in Q3 and the tyres degrade but not so much that they're ruining the racing like in some other earlier years of the experiment.

 

But the biggest issue for fans is not the quality of racing but the access. I know being in England since the BBC only now shows half the races live a lot of friends of mine who don't have Sky have just stopped following the sport. That notion of "I'll skip this one race" quickly turns into "I'll skip every race" and its no surprise viewing figures are down.

 

I'm positive if FOM put 15 minute race recaps on youtube people would watch subscribe and watch them and if they offered a reasonably priced stream people would buy it. The reason viewing figures are down seems rather obvious to me and not at all a symptom of some issue with the racing.

 

 

[Brother Fox]

Because the people with the power to do so still havent grasped what the internet can do.

[wrcva]

Because Bernie and his luddite team are still living in a different era...

[Disgrace]

There's certainly no chance that any race content will be put on YouTube, particularly given FOM's recent monetisation of comprehensive live timing. Race highlights would only be offered as part of an online package like MotoGP provides. Of course, this would mean FOM would actually have to promote the sport themselves rather than delegate it at £40 million per year to Sky for instance.

 

CVC and Bernie are slowly on their way out - the last thing on their agenda is to make long-term investment now because they'll wring no profit.

[mtknot]

 I see these rules basically trying to 'give fans what they want' and lets be fair, most of the recent changes to the sport have been for the better. This year the cars are following much closer and the racing itself is great, the qualifying format works with two runs in Q3 and the tyres degrade but not so much that they're ruining the racing like in some other earlier years of the experiment.

 

But the biggest issue for fans is not the quality of racing but the access. I know being in England since the BBC only now shows half the races live a lot of friends of mine who don't have Sky have just stopped following the sport. That notion of "I'll skip this one race" quickly turns into "I'll skip every race" and its no surprise viewing figures are down.

 

I'm positive if FOM put 15 minute race recaps on youtube people would watch subscribe and watch them and if they offered a reasonably priced stream people would buy it. The reason viewing figures are down seems rather obvious to me and not at all a symptom of some issue with the racing.

I would definitely throw my money at the screen if I could have a paid youtube stream to F1.... 

[Thomas99]

There's certainly no chance that any race content will be put on YouTube, particularly given FOM's recent monetisation of comprehensive live timing. Race highlights would only be offered as part of an online package like MotoGP provides. Of course, this would mean FOM would actually have to promote the sport themselves rather than delegate it at £40 million per year to Sky for instance.

 

CVC and Bernie are slowly on their way out - the last thing on their agenda is to make long-term investment now because they'll wring no profit.

 

Ok but maybe race edits and a few highlights from the race on youtube. Youtube is great promotion, the FOM channel would get 10 million subscriptions and its like free advertisement.

[lbennie]

Because bernie has many massive contracts with local broadcasters that guarantee exclusivity.

[baddog]

Too many badly written contracts.. but no seeming effort to improve them when they come up, which indicates a failure to understand the medium.

[bourbon]

Cable tv stations are starting to offer live streams (anywhere tv) free to their customers everywhere cable is sold.  Some countries have long had the privilege, but others are slowly joining in.  So streaming is coming, in general.  For those countries that don't get coverage, FOM may have an opportunity that does not conflict with any contracts.

[Guizotia]

The underlying reasons for this are quite clear when you understand the business logic (I'm simplifying greatly in the below):

 

People generally want exciting lives, they want new-ness.  People who run businesses are no different.  And exciting for someone who runs a business means innovation and growth.

 

There is a difference between young and old industries.  In a young industry (e.g. wearable smart devices) there are lots of opportunities and growth is possible.  In an old industry (e.g. desktop PCs) opportunities are very limited and growth is very difficult.

 

If someone is running a private business then they can do what they like.  If someone is running a public business i.e. with shareholders, then they are employed to make money for the shareholders.

 

Companies have proved over the years that they just can't give up on sexy innovation and growth.  But in a mature industry pursuing growth is more often than not the same as throwing money down the toilet.  Shareholders pockets and toilets are two different places.  This makes shareholders unhappy.

 

Even if they keep away from the innovation money-pit, successful companies in mature industries aren't likely to have the fierce competition of the young industry.  This means that the pressure to be efficient, and ensure day-to-day costs are minimised, is low.  This again makes shareholders unhappy.

 

So what's a shareholder to do?  Well luckily for them someone in the 1980s had a think about this problem, and the leveraged buyout was born.  

 

A leveraged buyout is a purchase of a company using debt.  It works like this - imagine you are an investor and you want to buy a company.  Instead of paying for the company with cash, you (and other investors you gather together) loan yourself money. You use this loan money to pay for the company but (the key point is) you then make the company liable for the loan repayments.

 

This is a very neat trick.  What you have done in effect is get the company to buy itself, out of it's own future earnings.

 

And why would we want to do this?  Because now the company is lumped with big, unavoidable debt repayments.  What that does is force the transfer of cash out of the company to be the highest priority for the people running it.  If they don't make those payments, the company goes under.

 

That's basically what CVC did with Formula One a few years ago.  I've added comments below in red.

 

 

July 17, 2014 11:40 pm

CVC Capital Partners will extract a further $360m from Formula One under the terms of a debt refinancing deal that will benefit shareholders of the motorsport series by more than $1bn.  

More money coming out of F1 than they thought, so they are loading it with more debt.

 

The refinancing is due to be completed by the end of the month and is being undertaken to take advantage of favourable debt markets, according to people with knowledge of the deal.  

 

F1 has proved one of the most successful investments for the private equity group, which bought it in 2005-06.

 

It invested nearly $1bn and used $2.5bn of debt, but through stake disposals and dividends has generated more than five times its outlay.

 

http://www.ft.com/cm...l#axzz3D41gayHe

 

When you understand this you can see why there is a big mismatch between the money that F1 makes, and the amount of effort that it puts into innovating.

 

The mentality of the management is basically like the mafia - to extract as money as you can without killing the patient.  If the business truly is in a mature industry with low growth prospects, makes sounds business sense.  If the business isn't in this situation, then this approach is a short-term gain at a longer-term loss. 

 

Leveraged buyout is basically a cash-extraction tool.

 

 

[loki]

There is an order of magnitude more money in traditional broadcast than Internet broadcast and will likely be that way for some time to come.  People can say what they will about innovation and being behind the times but the fact is that old fashioned TV is a bigger money maker for large scale sports than the Internet.  Some of the smaller sports have benefited greatly from streaming and online coverage but for the big sports the money is still in the old school media.  That doesn't mean they couldn't do highlights or even short promotional/informational content but watching races and qualifying live isn't going to happen in wealthy markets anytime soon.

[HoldenRT]

Why can dinosaur not have jet pack or mobile phone etc?

[Talisker]

Because I assume F1 makes more money by auctioning off rights to commercial TV providers like Sky, than it would offering internet streaming coverage to subscribers. And the TV companies take all the risk.

 

It's nothing about moving with the times, not being technologically savvy etc. It's pretty obvious that if it was a more lucrative option, they'd be doing it. 

[FullThrottleF1]

Maybe because it is run by a bunch of old men living in the 1970's where TV was the only glowing electronic appliance?

[grandmastashi]

For the same reason none of the pre 2003 season review videos have never been released on any other format other than VHS. Bernie values the footage extremely highly and charges a fortune per second if you want to use it. 

 

This is why we never really get any commemorative official Blu Ray/DVD releases from F1 covering famous drivers, teams, races etc, he believes the more you hold it captive, the more people will want it (and to a degree he's right). 

 

I've made the comparison to F1 and WWE wrestling in the past when it comes to Bernie and Vince McMahon; both similar in many of their crotchety ways, but very different in others. Vince is completely willing to take a punt and let the brand be used on whatever sells, wheras Bernie is the complete opposite. When you consider WWE release event, biographical/historic DVD/Blu Rays almost weekly, you can see their fans obviously have an appetite for them. Personally I'd love to get all the old season reviews remastered in HD, along with proper career retrospectives and whatever else they wanted to push out... off the top of my head Ayrton's Senna's greatest victories, The Top 50 Overtakes of all time as voted by vans etc etc 

 

It always comes back to the fact that as fans, we're the lowest priority Bernie has! 

Edited by grandmastashi, 12 September 2014 - 07:32.

[HoldenRT]

We should be glad and thankful that it's in colour, has widescreen and HD resolutions.

[LuckyStrike1]

Because Bernie doesn't understand it and because any of the influential people within F1 that does understand it -  people within the community of team managers, team owners, FIA reps, FOM, race promotors,  etc. - does not have a backbone strong enough to tell Bernie so and because there does not exist a marketing function for F1. 

Edited by LuckyStrike1, 12 September 2014 - 09:02.

[pdac]

Because the sums don't add up. The money you can make from such a service is dwarfed by the loss from exclusive TV contracts.

 

F1's primarily purpose is to make money for FOM and CVC.

[noikeee]

We should be glad and thankful that it's in colour, has widescreen and HD resolutions.

 

And it took insanely long for us to have widescreen and HD. If we extrapolate how late F1 was to that, to internet streaming, I reckon we'll be able to legaly watch a race online by 2025.

[pdac]

Because Bernie doesn't understand it and because any of the influential people within F1 that does understand it -  people within the community of team managers, team owners, FIA reps, FOM, race promotors,  etc. - does not have a backbone strong enough to tell Bernie so and because there does not exist a marketing function for F1. 

 

To be fair, the reason Bernie is in control is because the teams trusted him to take control of the commercial side and boost the sport - and he delivered in spades. Those people suddenly became richer than their wildest dreams.

 

The issue now is that Bernie adopted a B2B business model. This lead to the emphasis changing from being fan focused to to being business focused and, as the money level increase, it moved away from businesses and towards states and nations. Now, like a lot of businesses do, it's reached that point where it becomes difficult to achieve the levels of growth that people have become used to.

 

With my cynics hat on, I think most of the talk at the moment is not about losing fans and viewers because it's bad for the sports sake but rather for the effect it will have on the growth and profitability of the businesses involved.

[turssi]

Because bernie has many massive contracts with local broadcasters that guarantee exclusivity.

Yeah, this has been asked often and what lbennie states here seems to be one of the sensible explanations. FOM has contracted away the rights to put content online and even more: they are obliged by their contracts to keep uploaded content off the net and can't even explain to online fans why, as that would break some disclosure items.

[ElDictatore]

Because bernie has many massive contracts with local broadcasters that guarantee exclusivity.

 

Basically this. Seeing that F1 isn't in good financial health, getting more money out of TV rights is probably quite significant. If they had online streams and subscriptions the price for TV rights would drop - and they had probably done the maths to be able to say that this model wouldn't generate enough money.

They probably would have more possiblities in that regard if they somehow manage to reduce cost.

[wrighty]

Why can dinosaur not have jet pack or mobile phone etc?

 

Dinosaur with a jet pack?!
 

 

On topic, i suspect that if Bernie doesn't trust his teams ability to make every available cent from it (i.e. not gonna get his leg lifted) he won't get involved.

Edited by wrighty, 12 September 2014 - 10:54.

[JHSingo]

It's a very good question and I've honestly no idea why they haven't got a YouTube channel etc.

 

Pathetic how pretty much any F1 video is removed from YouTube. Not a very good way to grow the sport...

[ardbeg]

There will be Internet streams when the TV rights revenue falls below the projected stream revenue. Not having streams increase the value of the broadcast rights. In the long term, Bernies strategy is bad, but he is an old man and I guess it works fine for him.

[PlatenGlass]

I find it interesting that in recent years, older races have appeared on YouTube without disappearing.

[Nonesuch]

It's a very good question and I've honestly no idea why they haven't got a YouTube channel etc.

 
All teams have YouTube channels which feature hours of F1 related video. The 'problem' is with the actual races, for which national broadcasters pay millions to have the exclusive right to broadcast it within a specific territory. The broadcasters could put clips on their own website (and some do), but their websites obviously don't have the same kind of audience that Google has. There's also the issue of limiting content on a website to specific regions; it is possible, but it is usually not difficult to circumvent these restrictions. That probably discourages the practise as well.
 

Pathetic how pretty much any F1 video is removed from YouTube. Not a very good way to grow the sport...

 
It's mostly the recent stuff that gets removed (because of the exclusive rights). There's plenty of older stuff available, and I've uploaded a few clips from around 2000 and never had any problems with FOM or Google.

 

It is of course questionable how excited watching Mansell vs. Prost makes a person for the current Hamilton vs. Relia.. Rosberg battle.

[Disgrace]

Because Bernie doesn't understand it and because any of the influential people within F1 that does understand it -  people within the community of team managers, team owners, FIA reps, FOM, race promotors,  etc. - does not have a backbone strong enough to tell Bernie so and because there does not exist a marketing function for F1. 

 

This is similar to the idea that the banksters did not understand the derivatives which helped cause the global financial crisis, but it doesn't really hold up. Bernie has remained F1 supremo as long as he has precisely by wholly controlling the environment around him. I don't doubt for a moment he understands new media. The absence of a shift towards it is not somehow incidental, but very deliberate.

[pdac]

This is similar to the idea that the banksters did not understand the derivatives which helped cause the global financial crisis, but it doesn't really hold up. Bernie has remained F1 supremo as long as he has precisely by wholly controlling the environment around him. I don't doubt for a moment he understands new media. The absence of a shift towards it is not somehow incidental, but very deliberate.

 

The truth. In his billion-dollar world he understand all too well how trivial the amounts of money that it would bring in are.

[smitten]

Pathetic how pretty much any F1 video is removed from YouTube. Not a very good way to grow the sport...

Is there actually any evidence that a youtube channel would grow the sport? You know, a proper study rather than "this sport has one, and I think F1 ought to"

Presumably they already know how popular their race highlight videos are already in each market, and obviously with youtube they would have to share revenue.

Edited by smitten, 12 September 2014 - 17:08.

[Tsarwash]

I would certainly subscribe to an official F1 feed. I'm not sure how much I would pay for it though, maybe up to £200, but hopefully a lot less. I don't want to give Sky any money, as this seems to only encourage them. 

[Brazzers]

It's all to do with the profit margins for Bernie. Basically the licensing aspect to streaming is all to do with Bernie getting a much higher price from tv networks than if there were licenses to youtube and such. If he had licensed the streaming aspect, then the price for the tv rights would be lower, which in turn would have a lower ROI & ROA for Bernie and co. It's not necessary about Bernie being backwards (even though I personally think he is). Let's not forget the cash making king that is F1, I mean it was one of the few industries from the GFC that has increased revenues and profit. 

Edited by Brazzers, 12 September 2014 - 17:32.

[Ellios]

It's a very good question and I've honestly no idea why they haven't got a YouTube channel etc.

 

Pathetic how pretty much any F1 video is removed from YouTube. Not a very good way to grow the sport...

 

As you know, it's removed due to copyright infringement, same as Football, MotoGP etc... I agree with you not the best way to grow the sport but if you don't own it you can expect to be hit with a takedown. Many upload the footage in the hopes of getting youtube monetization

[GoldenColt]

 I don't doubt for a moment he understands new media.

 

Yes, because Bernie is known for getting on well with new(er) technology...

 

 

[f1RacingForever]

It's all to do with the profit margins for Bernie. Basically the licensing aspect to streaming is all to do with Bernie getting a much higher price from tv networks than if there were licenses to youtube and such. If he had licensed the streaming aspect, then the price for the tv rights would be lower, which in turn would have a lower ROI & ROA for Bernie and co. It's not necessary about Bernie being backwards (even though I personally think he is). Let's not forget the cash making king that is F1, I mean it was one of the few industries from the GFC that has increased revenues and profit.

Yep.Sucks for fans but it's a sound business model. There is more money to be made forcing viewers to subscribe to a $20 a month TV package that includes multiple channels and programming then the $5 a month most would willing pay for a youtube stream service. Bernie is no fool.

[pdac]

Yep.Sucks for fans but it's a sound business model. There is more money to be made forcing viewers to subscribe to a $20 a month TV package that includes multiple channels and programming then the $5 a month most would willing pay for a youtube stream service. Bernie is no fool.

 

Don't forget that Bernie doesn't even get into the idea of charging $20 a month for a TV package. He leaves that to someone else and charges them a flat fee (that increases every year). If they don't get enough $20 subscriptions to cover their costs, tough, they still have to pay Bernie.

[blub]

Keep in mind that F1 was in SD for years after most sports had switched to HD, why spend the money if every time you open for business the money floods in?  FOM is all about NOT spending money, every cent saved goes into FOM CVC’s pockets.

About twenty years ago a funny thing happened in the film business, several studios were taken over with the whole leveraged buy-out game. I remember MGM being a play thing over and over and the reason was their film library. With the advent of the VHS and CD/DVD business, old films had real value and the libraries alone were worth a fortune. No one could tap into the larger part of a libraries value because there hadn’t been a way to get to an audience outside of cable and over the air TV. Within a few years half the income to the  film studios came from this new industry. I think Bernie saw this concept of over valuing a past library and went to work, along with CVC they were able to over value all of F1 to get greater loans. The trick in this case was to value the library highly but never let it become a revenue stream because at that point the over valuation would become clear. So, use the library as a financial tool but never sell any of it, beyond a few small things here and there to favor a contract holder to the TV rights. I know it’s strange but the libraries presumed value is worth far more then it’s actual value. Keep it under wraps if you will.

I agree with those that say the way F1 is sold and meets an audience today is the best and most lucrative way for FOM to do it. When people say FOM doesn’t get the new media and the social stuff I agree but that is NOT where the money is right now. Social media and the internet are only marketing tools NOT income tools. FOM understand half of this but they fall on their face on the marketing part of this. Part of this is because FOM does not want to spend a cent on marketing, they want the teams to do all that. This is where the mistake is, yes to social media and all the other new media stuff, but only for marketing. FOM is not going to create a real marketing department, it costs money and can only lead to spending more money.

There should be a constant stream of videos created with the teams by FOM and distributed on the internet between every race. There should be historical videos, comic videos, narrative short videos, team profile videos, technical videos etc, the whole range of possibilities. Today only the teams or broadcasters do this kind of stuff. In one way FOM is so lazy, on the other their bank account is well rewarded for it.

[pdac]

Keep in mind that F1 was in SD for years after most sports had switched to HD, why spend the money if every time you open for business the money floods in?  FOM is all about NOT spending money, every cent saved goes into FOM CVC’s pockets.

About twenty years ago a funny thing happened in the film business, several studios were taken over with the whole leveraged buy-out game. I remember MGM being a play thing over and over and the reason was their film library. With the advent of the VHS and CD/DVD business, old films had real value and the libraries alone were worth a fortune. No one could tap into the larger part of a libraries value because there hadn’t been a way to get to an audience outside of cable and over the air TV. Within a few years half the income to the  film studios came from this new industry. I think Bernie saw this concept of over valuing a past library and went to work, along with CVC they were able to over value all of F1 to get greater loans. The trick in this case was to value the library highly but never let it become a revenue stream because at that point the over valuation would become clear. So, use the library as a financial tool but never sell any of it, beyond a few small things here and there to favor a contract holder to the TV rights. I know it’s strange but the libraries presumed value is worth far more then it’s actual value. Keep it under wraps if you will.

I agree with those that say the way F1 is sold and meets an audience today is the best and most lucrative way for FOM to do it. When people say FOM doesn’t get the new media and the social stuff I agree but that is NOT where the money is right now. Social media and the internet are only marketing tools NOT income tools. FOM understand half of this but they fall on their face on the marketing part of this. Part of this is because FOM does not want to spend a cent on marketing, they want the teams to do all that. This is where the mistake is, yes to social media and all the other new media stuff, but only for marketing. FOM is not going to create a real marketing department, it costs money and can only lead to spending more money.

There should be a constant stream of videos created with the teams by FOM and distributed on the internet between every race. There should be historical videos, comic videos, narrative short videos, team profile videos, technical videos etc, the whole range of possibilities. Today only the teams or broadcasters do this kind of stuff. In one way FOM is so lazy, on the other their bank account is well rewarded for it.

 

The thing is, though, FOM is selling to businesses, not the public. They sell to the TV broadcasters and to the circuits (that one I find quite bizarre). And, as you point out, it works very well and the money rolls in. So why on earth would they need to do the marketing? That would only be required if their customers (the TV companies and the circuits) were threatening to take their business away. And this won't happen overnight because they are tied into long contracts that have big penalty clauses for early termination.

[lbennie]

Yes, because Bernie is known for getting on well with new(er) technology...

 

 

 

He does this stuff on purpose, he likes to play the senile old man in interviews too, but really hes still quick as whip, the guy is a shark. 

[August]

It really sucks one must subscribe the TV channel to see F1. Of course, there are other interesting sports too, e.g. IndyCar, even though the Fontana race wasn't even live. But there's so much you don't care about and some sports are on another PPV channel.

 

I'd rather pay only for what I want to see.

[pdac]

It really sucks one must subscribe the TV channel to see F1. Of course, there are other interesting sports too, e.g. IndyCar, even though the Fontana race wasn't even live. But there's so much you don't care about and some sports are on another PPV channel.

 

I'd rather pay only for what I want to see.

 

Of course you would. Everyone would only like to pay for what they use, no matter what area of life you're talking about. However, that's not the society we live in and it's certainly not the model of society that I would want. I think it really sucks that the BBC are no longer covering everything live as the license fee is something that I do have to pay for regardless of whether I could not care less about East Enders or Cash in the Attic or whatever.

[redreni]

Their model is based on national markets. I guess they could have a paid stream and geoblock it in the places where making it available would be bad for business. For example, 10 of the 19 races are officially only available through a subscription-based pay channel here in the UK, and a pay-per-view internet stream would represent a much cheaper way of watching for people who are interested in F1 but not in the other motor racing series and other sports content that lurks behind BSkyB's paywall. That would affect the value of any new contract with BSkyB, and would almost certainly be against the terms of the existing one.

 

Personally I think F1's model is rubbish because it tries to maximise rights income, which goes to Bernie, at the expense of viewer numbers which, if you can increase them, increase advertising and sponsorship rates thereby benefiting both the teams and Bernie, but mostly the teams. It's short termism.

 

I think to get people watching there should be a basic internet stream available for free, possibly with ads, possibly geoblocked in countries where the race is on free-to-air television provided the free-to-air broadcaster makes the race available in its own market on a decent variety of platforms (e.g. like the races that are shown live on the BBC, which can be watched in the UK via the iplayer, so that people can watch through their tablets, phones etc as well as at home). That's how you get the mass market - try to get on traditional, mainstream free-to-air channels but at the same time don't exclude those who want to watch for free on mobile devices and, in any market where you can't get on mainstream TV, at least make a basic live stream available via formula1.com so that people can still watch.

 

And for the more specialised audience, I think formula1.com should offer a paid service as well, offering the world feed ad-free in both live streaming and on-demand, as well as onboards, pitlane, car tracker, proper, detailed live timing, basic live telemetry, full access live and on-demand to all pit-to-car team radio and the race control radio channel, etc. That way you reach out to the widest possible audience, and still have a bespoke offering for the nerds which we might well be willing to pay for. Insisting that an F1 nerd who wants to watch the races live has to also pay to watch hundreds of football matches which he might not be interested in, in order to receive a service which is essentially no better than what the free-to-air broadcasters provide for their live races, is a knackered, clapped out late 80s business model and a good way of alienating people and lining the subscription television service provider's pockets, while only boosting F1's commercial revenues by a relatively small amount.

 

In other words don't hide the basic coverage behind ridiculous paywalls. If you want to charge, charge for premium services which the afficianardos might actually want to pay for, because a lot of it would be in addition to what we've had access to up until now, and which the casual viewer will be willing to do without.

[LORDBYRON]

Its just to simple and more likely that there media contracts made sure they cat have it

[MrPodium]

Their model is based on national markets. I guess they could have a paid stream and geoblock it in the places where making it available would be bad for business. For example, 10 of the 19 races are officially only available through a subscription-based pay channel here in the UK, and a pay-per-view internet stream would represent a much cheaper way of watching for people who are interested in F1 but not in the other motor racing series and other sports content that lurks behind BSkyB's paywall. That would affect the value of any new contract with BSkyB, and would almost certainly be against the terms of the existing one.

 

Personally I think F1's model is rubbish because it tries to maximise rights income, which goes to Bernie, at the expense of viewer numbers which, if you can increase them, increase advertising and sponsorship rates thereby benefiting both the teams and Bernie, but mostly the teams. It's short termism.

 

I think to get people watching there should be a basic internet stream available for free, possibly with ads, possibly geoblocked in countries where the race is on free-to-air television provided the free-to-air broadcaster makes the race available in its own market on a decent variety of platforms (e.g. like the races that are shown live on the BBC, which can be watched in the UK via the iplayer, so that people can watch through their tablets, phones etc as well as at home). That's how you get the mass market - try to get on traditional, mainstream free-to-air channels but at the same time don't exclude those who want to watch for free on mobile devices and, in any market where you can't get on mainstream TV, at least make a basic live stream available via formula1.com so that people can still watch.

 

And for the more specialised audience, I think formula1.com should offer a paid service as well, offering the world feed ad-free in both live streaming and on-demand, as well as onboards, pitlane, car tracker, proper, detailed live timing, basic live telemetry, full access live and on-demand to all pit-to-car team radio and the race control radio channel, etc. That way you reach out to the widest possible audience, and still have a bespoke offering for the nerds which we might well be willing to pay for. Insisting that an F1 nerd who wants to watch the races live has to also pay to watch hundreds of football matches which he might not be interested in, in order to receive a service which is essentially no better than what the free-to-air broadcasters provide for their live races, is a knackered, clapped out late 80s business model and a good way of alienating people and lining the subscription television service provider's pockets, while only boosting F1's commercial revenues by a relatively small amount.

 

In other words don't hide the basic coverage behind ridiculous paywalls. If you want to charge, charge for premium services which the afficianardos might actually want to pay for, because a lot of it would be in addition to what we've had access to up until now, and which the casual viewer will be willing to do without.

 

Ok. Let's look as Silverstone for a model. They are entirely depended on the revenue of a grand prix weekend to cover hosting the costs of the race. They obviously don't complain (well they might a bit), as said revenue gives them massive publicity and which helps them generate income for the rest of the year. So why would any event agree to free streaming? There is a nice balance. F1 has turned from a specialised event into a global sport over the past thirty years. Someone took the risk to do that, and that person was Ecclestone. On more than one occasion he offered to sell the event to the teams. They didn't want any of it, just the reward without the risk. So back in the days, Ecclestone took the risk, and he's reaping the rewards. Why on earth would anyone spoil that model to cater for people who want to watch coverage for free? It just wouldn't work. I'm in the UK, Sky coverage is excellent. It's a tenner a week, hardly a fortune (and they don't credit check), so it's available to all. I think people should just stop moaning, as at the end of the day, we all invest a huge amount of time here discussing the sport we love. I'm sorry, but if you don't want to pay a few quid a month to enjoy the spectacle, then don't moan.

[SlickMick]

Not sure I can take anymore of these business studies for dummies lectures by wannabe Krugmans.

TV makes Bernie more dosh! End of.

 

[chunder27]

Podium

 

AM not so sure Silverstone covers their outlay from F1 alone.

 

I would imagine they are also bumling up entry fees for GP and the like, they hvae skyrocketed in recent years, also because Dorna wanted more money to host the race, but as a business thre is nothing to stop you putting up prices on other marquee events like Classic (which has risen considerably in recent years) and GP to cover any lack of breaking even in F1.

 

F1 always seem to sell out, so you are more or less guaranteed the income you can get for the admittance, the other events not so, weather plays a part as do entries and national interest in riders.  So in theory you could cover the shortcomings form one event by charging more for others.

 

A few quid a month is not the issue, it's all the extra costs life is throwing at you, petrol, utilities, insurance, these thigs mean you are more likely to not see F1 as worthwhile.

 

Oh, and you do not HAVE to pay the licence fee at all, do the research. You only require that licence if you watch things as they are being transmitted, and seeing as though BBC record all races and show full races hours after the event what is the point in paying it? Unless you watch lots of live TV?

Edited by chunder27, 18 September 2014 - 17:17.

[Tapz63]

Because it is too big to fail.

[jonpollak]

Not sure I can take anymore of these business studies for dummies lectures by wannabe Krugmans.

TV makes Bernie more dosh! End of.

I know, right? .....Have we ALL not beat this dead horse over and over again?

Jp

 

Edited by jonpollak, 18 September 2014 - 17:44.

[blub]

Sorry Mr. Court and Spark, but I have to add more cents into this discussion.

pdac, to answer you response to my post, the point of FOM spending some real money on marketing is to GROW THE PIE! F1 is in a far more competitive market place then ever before, video games, the internet for other uses, the rise of new sports like the X Games etc F1 needs to sell itself to grow the pie. If more people were to watch more money would come  from sponsorship, more would watch the race in person and on TV and on and on. Growing the pie is my point regarding FOM spending money each year to engage an audience in an effort to add value and find new viewers.

I am a fan of Bernie but only up to a point, when I do my “if he were hit by a bus” test I see F1 largely the same as it is today. The truth is most of the so called innovations and structure that F1 has today came to it far later then in other professional sports, they innovated BE followed. BE was good for the sport for not messing it up. The history of business is littered with people who got the top job at a company and proceeded to destroy it, so respect must be paid to BE for doing far more good then bad, but he is missing the promotion trick and that is having a ripple effect on teams and their ability to stay in the game and compete. Marketing has a real role in any commercial product, and for F1 its almost like it doesn’t even exist.

[MrPodium]

Podium

 

AM not so sure Silverstone covers their outlay from F1 alone.

 

I would imagine they are also bumling up entry fees for GP and the like, they hvae skyrocketed in recent years, also because Dorna wanted more money to host the race, but as a business thre is nothing to stop you putting up prices on other marquee events like Classic (which has risen considerably in recent years) and GP to cover any lack of breaking even in F1.

 

F1 always seem to sell out, so you are more or less guaranteed the income you can get for the admittance, the other events not so, weather plays a part as do entries and national interest in riders.  So in theory you could cover the shortcomings form one event by charging more for others.

 

A few quid a month is not the issue, it's all the extra costs life is throwing at you, petrol, utilities, insurance, these thigs mean you are more likely to not see F1 as worthwhile.

 

Oh, and you do not HAVE to pay the licence fee at all, do the research. You only require that licence if you watch things as they are being transmitted, and seeing as though BBC record all races and show full races hours after the event what is the point in paying it? Unless you watch lots of live TV?

 

Yes, they do. The ticket fees cover Silverstone's costs for hosting the grand prix. That's the only revenue they get to the best of my knowledge. However, a lot of races are underwritten or subsidised by gonvernments. And I'm not talking about attending a race, I'm talkiing specifically about people wanting to watch races free, through whatever streams they may choose. The BBC licence fee is another point of contention altogether. You mention other marquee events, fair point. But do they enjoy even a small percentage of the coverage F1 does? No. Just look at GP2 alone. Great racing. But when the race is finished, there's maybe 100 people attending the podium ceremony, have a look, you'll know what I mean. It simply doesn't get the coverage an F1 event enjoys. And that has to be paid for. FOM pay for the coverage, it's not cheap. Who do you think spent the cash so we can enjoy HD streams, etc? Ecclestone did, at the end of the day. He had the foresight to take the risk and now he's enjoying the benefits. So why on earth would he break a succcessful business model to cater for people who want to watch everthing online for free? However, we live in an age where streaming via internet is now viable for anyone with more than a stable 2mbps connection (I do know what I'm talking about here, I worked in global voip telecoms). So at some point, the entire grand prix weekend experience will be avaiable online (you can even watch via Sky Go). It wil undoubtedly attract many new customers, but should it be free? Probably not, the BBC, ITV, and BBC again tried to use the model, but it didn't work. Channel 4 even put in a bid, but it wasn't seen as sustainable. And I sincerely beleive that if the teams weren't so shortsighted as to want all the reward with no risk then things might have been different. So, as much as I admire Ron Dennis et al, I think they were incredibly naieve. They had their chance, they lost it, **** happens. We live in a capitalist society, and nothing in life is free, not even F1.