Is Bernie holding Formula 1 back?

Having listened to what the delegates in the first session at the Motor Sport Business Forum had to say about broadcast rights in the new media age, I thought I’d set the cat loose among the pigeons. So, when Chairman Allen invited questions from the floor, I asked:

Given what was said earlier about the broadcast rights being based on a model that’s at least 15 years old, do you think that Formula 1’s rights holder is holding back the sport by clinging on to this outdated model?

I fully expected an epidemic of fence-sitting, but the responses were very interesting. Neville Wheeler of Cisco said:

The pace of change in the internet in general is so fast that unless you’re prepared to break away from the shackles of the old way of doing things, you’re rapidly left behind. You will very quickly find that the people who are passionate fans will seek out and access the content in one way or another.

The smart organisations are trying to find a way of monetising those rights, rather than trying to create a walled garden to protect them as long as possible. We have to get to a point where the audience immersion, social media and associated technologies are a key component of the way motorsport – and sport in general – is delivered to the global audience.

I like the ‘walled garden’ analogy. It speaks to everyone who has tried to access a territory-locked live feed or put up a montage of racing footage on YouTube. FOM has a marketing department of 12 and half of them must be lawyers; one probably even has ‘YouTube Grinch’ in his or her job title.

Gérard Lopez from Mangrove Capital Partners said:

To most people, the so-called MTV generation is the modern generation. To us it’s not – it’s old-fashioned. People don’t buy music any more. Kids don’t watch television as much as they used to. People consume media in a different way. Even some video game platforms are being forced out of the market by on-line gaming. Rights holders have to touch their audiences differently.

It doesn’t make sense to try to charge people for something that they will figure out how to get for free. F1 will be available on the internet and you need to be prepared for that. The challenge is not in deciding what you give away for free but in deciding what sort of value you’re going to provide on top of that – elements that people are actually willing to pay for.

New Lotus F1 boss Tony Fernandes said:

I came from the music business. I left that business because it didn’t want to embrace the internet. I told them [Time Warner] that if they didn’t embrace it, the music industry would be destroyed. They were more concerned with EBEYDL – Earnings Before Everything You Don’t Like – calling it ‘cashflow’. I quit that day.

Social media is a fantastic way of reaching an audience and keeping them excited on a day-to-day basis. There’s a massive opportunity. But whatever you do, it has to be accessible and reasonably priced. There’s a fantastic app for the iPhone that keeps you informed about timings on a race weekend, but it’s pricey. I think F1 has to look at that.

Everyone I’ve spoken to has been enormously impressed by Tony Fernandes. He seems to be exactly the kind of driven, entrepreneurial, forward-thinking businessman F1 needs, and not a flim-flam man or a Walter Mitty type.

The next panel was about sponsor value, and one or two of the representatives echoed the sentiment that FOM needs to take a more proactive approach to marketing the sport – but more about that in a separate post.

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  • Comments (12)
  1. Excellent points all. Good question to ask.

    Will this cause Bernie to mislay your press pass?

    • Stuart C
    • December 9th, 2009

    My accreditation carriage turned into a pumpkin a while ago, but he is welcome to roast it with a sprinkling of caraway seeds…

    • me
    • December 9th, 2009

    never heard of EBEYDL before, but that was exactly how the music biz were acting. i wonder if they still are.

    out of interest, was bernie/a fom rep in the vicinity of these discussions?

    • Steven Roy
    • December 9th, 2009

    Nice to see people on the inside final catching up with what the fans have been saying for years and it is no co-incidence that the people saying it are new to the paddock.

    There are countless examples of Bernie holding the sport back. When people look at his contribution they compare the sport before and after Bernie and talk about the changes on the assumption that had there been no Bernie there would have been no change. Every other sport on the planet has made massive progress in the same period. In addition most other motor sports have done a better job than F1.

    The online experience for an F1 fan is pathetic. The IRL provides an online experience that is so far ahead of F1 that you would think it was from a different century. We have all grown up with F1 looking down its nose at Indy but the IRL people know how to make their product look good online.

    While Bernie has spent the past few years pulling videos from youtube the ALMS has been asking fans to post their videos on the ALMS website which drives traffic to it. I am sure the sponsors are thrilled that the youtube audience does not have access to their branding.

    A1GP had far superior live timing to F1 and like the IRL had the option of live telemetry from any car in the field. I can’t think of a single championship I have looked at in the past few years that could not teach F1 a lesson and that is before you consider what other sports like baseball are doing.

    We have finally had a new official F1 game after many years of nothing. The market for games is enormous and gamers are happy to buy a new game every year if they like the series. Online racing is popular and many drivers do it. Anyone with a business brain would create an official online F1 game with the winners of competitions getting the opportunity to race against Lewis Hamilton and co. The games market is a licence to print money for F1.

    How long did it take Bernie to figure out F1 merchandise was even an option and he has barely scraped the surface of what could be achieved?

    I could rant on this subject all day but no-one wants to read that and anyone who does probably has.

    Is Bernie holding F1 back? Yes like the iceberg held the Titanic back.

  2. It’s a nice thought but from what I’ve seen of CVC they have no intention of investing in Formula One at all. It’s totally crazy that we are still yet to get a HD feed and that the official F1 website is so behind the times. I honestly can’t see Formula One coverage moving to the Internet anytime soon.

    • Uppili
    • December 9th, 2009

    World cup football is going to have a select matches telecast in 3D….Think about it for a minute….which sport is more suited for 3D? A sport where blokes keep plodding a ball around a field or a sport where bloody racing cars are coming at you at 200 mph? Heck, we don’t even have HD telecast yet….

    • gravit8
    • December 9th, 2009

    I sincerely hope these guys get a message across on this subject sooner than later. I’m not sure about their respective nationalities, but for instance, I KNOW BBC’s live and online content/coverage are lightyears ahead of what’s available in the US (without those sneaky proxy servers and workarounds, which degrade the images and also take merchandising/ad revenue from the legitimate broadcasters).

    An F1 fan in the US has, on the average race weekend, maybe the second practice session, qualifying, and the race. There are no live feeds online for US fans, and the result is that many of us are familiar with ‘illicit’, poor-quality live feeds that are often interrupted mid-stream by BE’s crack team of copyright nazi’s (think soup nazi from seinfield – “NO SOUP(F1) FOR YOU!!”).

    To be blunt, this sucks. I’m a passionate F1 fan and still find the entire process almost too much to bother with. If not for the fact that the 4-5 races broadcast on a major network were ON A TIME DELAY (seriously) there would be little mainstream interest in this greatest of autosports.

    Add this together and it’s almost impossible to legally stay up to speed (and ohh, how we love our speed) with the goings on in F1. I’m sure I’m not the only fan who would gladly pay FOM/F1/whoever directly for the content that we know exists out there in other countries, not to mention the immense amount of live footage and streams that never get seen b/c of the often times fickle camera directors.

    As much as I’d feel bad for cutting the income of FOX networks (sarcasm here) I’m fairly certain they’ve been part of the problem – acquiescing to outdated broadcasting rights and requirements that were set in place years ago.

    In short, if F1 wants to get back into the North American market (with a healthy saturation of broadband users), they need to cut the BS and free up the broadcasting rights. And thats just in north america…

    • Stuart C
    • December 9th, 2009

    I could rant on this subject all day but no-one wants to read that

    This is a democratic space, so you can – and if they do, they will…

    There are no live feeds online for US fans, and the result is that many of us are familiar with ‘illicit’, poor-quality live feeds that are often interrupted mid-stream by BE’s crack team of copyright nazis

    I hope this situation will be resolved soon. As one of the delegates pointed out, fans who are prepared to look hard enough will unearth these illicit feeds. The sensible strategy is to work towards a scenario where a revenue stream can be generated from internet feeds. Most of the delegates here feel that FOM is like the little Dutch boy with his finger in the dyke. I have more posts brewing on this.

    In short, if F1 wants to get back into the North American market (with a healthy saturation of broadband users), they need to cut the BS and free up the broadcasting rights. And thats just in north america…

    You’re not alone. The North American market is very lucrative and many sponsors are quietly (some not so quietly) fuming that F1 has no presence there. At least Canada is back on the calendar (although I suppose we’ll have to wait until Friday for final confirmation of that).

    out of interest, was bernie/a fom rep in the vicinity of these discussions

    No, but the wake-up call will arrive shortly.

  3. No, but the wake-up call will arrive shortly.

    i vote we print out this page and send it to him by telegram.

    • gravit8
    • December 10th, 2009

    mr. c. :

    No, but the wake-up call will arrive shortly.

    i vote we print out this page and send it to him by telegram.

    I vote we print the numerous pages of this kind of discussion happening across the interwebs, make it into a book, and beat BE over the head with it. Or at least throw it at him. Until we hit him with a copy. (be nice, though, he looks rather frail. Just a toss should do it).

    Because, you know, otherwise, he’d probably just say it’s a small minority of fans or something.

    I know on other forums like sidepodcast this has been an ongoing discussion amongst true fans of this wonderful sport. The politics, the racing, and the action all take a back seat to being frustrated b/c you can’t catch or find a decent live feed to watch something as ‘boring’ as FP1, simply b/c FOX wouldn’t cough up another couple hundred grand to broadcast those sessions.

    Basically, why would anyone here give two ^&*$s about a series, even if they got a spot on the calendar anywhere in this country (even Canada, sorry), when you can’t watch it for the rest of the year without feeling a tad guilty for infringing legitimate copyright laws? We’ve got a bazillion channels that feature nothing but stick and ball sports (BOOOOORING!), with multiple pay-per-view options, packages, etc, and not one single option in any format to watch F1 outside of Speed/Fox (again, a freakin time delay? SERIOUSLY?!?)

    That said, I have to give credit where due – to the other fans with access to the feeds we don’t have, who are willing and able to hack their way through the overgrown muck of F1 broadcasting rights to provide fellow fans an opportunity to watch (in full blocky pixilated glory) something as ‘insignificant’ as FP1.

    Err, you welcomed the rant. You got it. Given a miracle (or a winning lotto ticket) I might someday be able to take the pilgrimage to Spa, or Silverstone, probably never Monaco but maybe Monza, at which point I could die happily…but it’ll most likely be by myself as an American because nobody else here has ever heard of F1. Blows my freaking mind, too, because we literally throw cash at NASCAR for some unfathomable reason. Toyota pulled out of F1 but re-enforced it’s commitment to NASCAR. HELLO? ANYONE SEE THE PROBLEM HERE?

    • Steven Roy
    • December 10th, 2009

    Every time I read about an illegal feed being taken down I am reminded of a short clip on a program about the Scottish ski areas. In a large cafe the presenter pointed to a large hand written sign on the wall that said “We do NOT(underlined twice) sell hot chocolate”. Clearly they got asked for it so often that it was worth someone’s time to make the sign so they would not be pestered with the requests. Of course anyone with the business acumen of a gerbil would have realised that there was a demand for hot chocolate and therefore a profit to be made from it just as anyone with any business acumen would know that if there are innumerable illegal feeds and youtube videos then there is a demand for these services and therefore money to be made from them.

    On a similar subject it has always baffled me that the people running a sport as international as F1 don’t realise that there are people who want to watch the sport who may be in countries where they don’t speak the language of the host broadcaster. How difficult is it to offer an online subscription service where people can watch a decent feed with commentary in the language of their choice?

    My only hope is that the 17 year contract given to Silverstone is a sign that Bernie is planning his exit. Hopefully we will see several more long contracts given to circuits so he can collect his commission on these deal before he exits stage left.

  4. i don’t find the F1 iPhone app expensive. I have purchased the 2010 app for $38 (AUD).

    This is only $2 per race. If only it was marketed that way…

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