Formula One’s new owners Liberty Media has given the first indication of its plans for the future development of the sport.
Liberty Media president and CEO Greg Maffei said it plans to increase the revenue the sport generates through broadcasting including much greater use of digital media, hosting more races, increasing sponsorship and growing the sport in markets such as the USA.
The broadcast revenue stream is one area where Liberty believes F1 can bring in more money. “I think there’s an opportunity to grow that broadcast stream, much of it free-to-air, to competitive pay services,” said Maffei, speaking at Goldman Sachs Communacopia Conference today. “That’s for example what happened in the UK when [Sky] recently bought the rights.”
Maffei also said Formula One can increase revenue from sponsors. “I think there’s opportunity to grow, invest in the sponsorship organisation,” he said.
The Liberty president says he believes Formula One’s record 21-race calendar this year could expand further. He identified Asia and Latin America as likely places for growth.
“I don’t think that gets solved in a week but I think that’s an interesting long-term opportunity,” he said.
“There have been 65 grand prix races in this US for Formula One. I think it’s actually, on the list of all the places there’ve been races, the United States is actually fourth or fifth. So it’s not as if it’s never had races here it’s just it’s been… there were races in Long Beach, there were races in Denver. You think about places where they’d have natural feel I would argue Miami, Las Vegas are very interesting places for the long term.”
“But that isn’t going to get solved in a week. I’d like to hope that, being Americans Chase [Carey, pictured], Liberty, could help with that process. I don’t think, as I’ve said, this is a quick fix. But for the longer term it’s a large, untapped market with upsides.
Another area of particular interest to Liberty is digital media. “Less than 1% of revenues is from digital,” said Maffei. “They really have no organised digital effort.”
“I think there’s a lot of things that can be done about gaming, VR [virtual reality] and AR [augmented reality].”
“There’s an enormous amount of video feed and data about the races that we are already capturing that we are not in any way processing, incrementally, for the dedicated fans, for opportunities around things like gambling.”
Maffei added a “much more direct to consumers kind of experience” would be possible for F1 with digital broadcasting. “How that augments and how we work that into the traditional broadcasters needs to be worked through,” he added. “But I think there’s a lot we can work with.”
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GeeMac (@geemac)
22nd September 2016, 17:14
“There’s an enormous amount of video feed and data about the races that we are already capturing that we are not in any way processing, incrementally, for the dedicated fans, for opportunities around things like gambling.”
Was anyone else getting more and more excited by that sentence only to be incredibly disappointed the last word was “gambling”?
So Liberty’s plan is basically for us to fork out more as fans and for the sport to make more money for Liberty. I feel quite good about reserving my judgment about Liberty until I heard their plans rather than welcoming them as the sport’s saviours.
Martijn (@)
22nd September 2016, 17:27
Hahaha, had the same emotions running through that sentence..
Tommi Alanen
22nd September 2016, 19:05
No way more races!! Absolutetly not! Where is the glamour???
UNeedAFinn2Win (@uneedafinn2win)
22nd September 2016, 19:44
They bouht the business for making a profit. Nothing shocking to see here
bpacman (@bpacman)
22nd September 2016, 21:22
Exactly my thoughts too! I think before we get too hung up on Liberty’s comments, it’s worth bearing in mind the setting where they were made. They were hardly likely to start talking about changes to tyre compounds or levels of downforce at a Goldman Sachs event.
Although I can completely understand why people don’t like the talk about moves to pay-TV, I wonder if we may see the revenue model shift more towards TV rather than race hosting fees. This would be a good thing as it would take the pressure off the traditional circuits which struggle to meet the huge hosting fees Bernie has demanded (and possibly could lead to tickets becoming more affordable for fans, particularly if Liberty think having full grandstands is vital for the appeal of the sport).
duncan idaho
22nd September 2016, 23:24
Transitioning to pay TV trades off revenue against total audience – FOM income is increased but the sport shrinks (and there must be a clear correlation with unsold seats).
Pay TV sales/subscriptions must be very susceptible to the overall economic conditions, particularly when the ‘competition’ is a taxation arrangement.
Are they seeing enough buy-in on transition (UK, Aus) ? If they aren’t, the next negotiation won’t include any speculation margin or enticement premium. The market would have shrunk, classic track promoters sent to the wall and Bernie n/a to drag in a regime or two to fill the gaps.
AlonsoSpeed
23rd September 2016, 1:00
As an American , living here in the states there one single channel that broadcasts Formula1
NBC-Comcast Sports early in the morning , except for COTA, Mexico, and Brazil where it will appear on NBC 5 (basic channel) but only if it doesn’t conflict with football or nascar in which case it gets regulated some other channel.
Consequently, for year 2012-2015 I’ve been using my friend’s london address /name a UK proxy IP and some darkweb shennigans in order to watch F1 live via skysports. I pay the $900 annual for full package of skysports everything . This year the proxy stopped working, my $900 went to the dumps and now I’m forced to watch on free-stream site in crap quality for a sport i love.
Also, it’s very hard to place bets here in the States as it pertains to bookee for F1 and impossible to find odds similar to those of skybet . Once, again I do something special in order to gain access to skybet and 4 other similar sites to place my bets with even further convoluted method of getting money in and out of accounts. 97.8% success rate over 10 years is pretty damn good .
I say yes to gambling
No to more races
Yes to pay services
yes to pro business
hell no to legacy /old school corrupt politics of F1 (i.e. Qatar deal with $100m annual hosting fee)
GOOD BYE BERNIE !
F1 is plagued with the “old boys” club mentality , as it was sold on the premise of being a good business with a significant value add opportunity . That which was free in the good old days, will now cost money. it will suck, but in the long run you’ll love it. I’d give my right hand to have uninterrupted Formula1 race similar to Skysports, Channel 4 , or like any other european sporting event without bloody commercials every 12 freaking minutes. There a lot , i mean alot of poeople who would pay good money not have commercials , pre, during, post FP1, FP2, FP3, qualifying and race day . More everything experience like Skysports , Channel 4, or BBC .
You guys in europe should have seen what it looked during the era of “speed channel” before COTA in 2012 . It was awful . NBC Sports much better , but falls miles short of skysports.
The legacy payments to Ferrari for $100M annually, and collectively Redbull/McLaren/Williams/Mercedes for the other $280M will be eliminated when contracts ends . If Ferrari wants to leave, let them go to WEC their threats are empty . it’s business and there won’t be any more bribes for manufactures to remain in the sport. If all the big guys leave, you’ll have a lot more teams competing and the field will be leveled.
BasCB (@bascb)
23rd September 2016, 6:18
When I read your comment AlonsSpeed, I can see how and why the things they want to look at can work.
– more races – provided they make sense a couple of extra races that would be at “normal” times for the American market could do wonders to get F1 working in the US. And yeah, if one can buy premium access where there is not much available, that would help. With more races, there is more likelyhood of it. Provided the calendar planning is done more with the traveling in mind (and less focused on forcing teams to accept a longer calendar like it has been for the last few years), I think the teams might accept it. Not a boatload, but a few more maybe at strategic places (those NY, LA, calefornia races? Maybe Argentina or something).
And if Liberty gets the betting organised, while I myself am not a fan of it, I guess it would also be another incentive to get footage out there and boost the market. Betting is large in Asia as well, another fit.
It would also mean doing some proper promotion of the sport, working together with sponsors to do so. I think that teams could be involved by having them bring a car and a few (ex-)drivers to events. They can still pull on Coulthard, next year Button will be available, maybe Massa can be available, I think Mario Andretti would be relatively open to it. And the likes of Jackie Steward can always be found, provided they get money from it too.
When the earnings of the sport can be raised, it will be relatively easy to agree on new deals with all teams that have them getting their part and doing away with the signup money deals. And we can forget about the strategy group when the teams can buy a couple of % of shares of the sport outright.
Canderous (@yoshif8tures)
23rd September 2016, 6:32
$900 woah. It’s not worth that much. And FYI, there are some very good HD streams available if you know where to look.
Joe Early
23rd September 2016, 10:26
You should look at NowTV her ein the UK, I refuse to pay £880+ to Sky for just F1. A weekend pass is £12 x 21 races = £252 a year which I dont mind so much
WEC is €25 euro for all races, other than LeMans been ~€18.
grat
26th September 2016, 15:36
You paid $900 a year? Geez. You can get a basic cable subscription for that. A little bit more, and you’ve got HD + DVR.
JCost (@jcost)
23rd September 2016, 11:57
+1
Stuart Becktell
22nd September 2016, 17:14
I would be lying if I said the first part about moving to more paid TV services didn’t scare me. I would love digital services to be available, expecting that it would require payment, but having everywhere in the world go to pay TV is a bad idea.
I also never knew there was a Grand Prix in Denver? There was a CART race there but thats obviously not F1! Hopefully they remember the issues which occurred with the Las Vegas F1 race too.
Keith Collantine (@keithcollantine)
22nd September 2016, 17:30
Maybe he meant Dallas? Or Detroit? Neither especially nearby, though.
Marc Thielke (@motor)
22nd September 2016, 18:14
Well, he lives in Colorado; maybe he just let slip that the next North American F1 race might be called the Mile High Grand Prix?
Peppermint-Lemon (@)
22nd September 2016, 19:01
Buh Dum chaaah! :)
Mark
22nd September 2016, 21:26
That wont do much for HP.
ColoradoF1
23rd September 2016, 16:38
Mexico City is higher. We in Denver just like our branding.
Mr. Fantastico (@latorres86)
23rd September 2016, 17:00
Exactly, a mile high is not even that high. But it has been historically good marketing for the city.
RACERNORRISKI (@racernorriski)
22nd September 2016, 21:22
Right on about the CART race in Denver. Which was a big money losers for the promoters. There was a direct infusion of several million dollars from Bill Daniels (a local big $$$ guy who is now long deceased) to keep things on track, no pun intended. Also seems this guy never heard of Austin, TX either. More than 21 races a year?? I am thinking the drivers and pit crews may have something to say about that schedule as it seems pretty exhaustive at the time. LIBERTY is owned by John Malone who was never a racing fan of any sort that I an aware of…. Thanks, Norris
Morty Vicar (@mortyvicar)
22nd September 2016, 23:36
TV is dead. The future is already here and it’s individual streamed content. I’d pay Liberty or whoever to get a reliable, high quality feed for an F1 weekend, to be consumed live or canned. Bernie should have done this a decade ago at least but he’s too much of a dinosaur to understand new demographics and consumption trends. F1 has probably lost a lot of potential consumers who – like me – have long since junked TV as the over-priced, over-advertised, underwhelming crap that it is. So long as Liberty don’t pollute the feed with too much annoying advertising and so long as they don’t charge too much, they and we should be fine. Of course any media capitalist pig with shareholders to placate is going to want fees for a direct feed and fees from advertising so we’re going to have to be vigilant against the encroaching advert-oozing. Cable TV has been a horrendous example to media companies and the internet in how to screw users and bombard us with with useless advertisements virtually non-stop.
Strontium (@strontium)
22nd September 2016, 17:34
Interesting thought, with the rumours of Apple being interested in McLaren, could they be interested in expanding the sport to North America so that iMcLaren would get more brand exposure and popularity there?
Miss Universe
23rd September 2016, 7:16
Apple could have F1 with their lunch money, and I’m sure they would have looked closely at it for content but they didn’t buy-in (unless there’s some arrangement with Liberty). The noise is any McLaren tie-in is about cars not entertainment.
John H (@john-h)
22nd September 2016, 17:38
Slightly worryingly there’s nothing about the sport, but just how the sport is consumed. I know they hold the broadcast rights, but whatever you do with one affects the other. Let’s hope they mention the sport at some point.
And I hope more TV means I won’t lose my RTL feed!! (I’m sure it will, but so be it)
spoutnik (@spoutnik)
22nd September 2016, 18:02
Exactly my thoughts! And same fear for Belgian tv.
Optimaximal (@optimaximal)
22nd September 2016, 19:34
@john-h You can bet every single FTA contract will be on the chopping block once current agreements expire. They’ll intentionally price them out of the market or only offer renewals to Pay TV broadcasters, under the auspices of ‘competition’, like how Sky TV requested an exclusive contract.
Tristan
22nd September 2016, 19:38
Completely agree.
The way I read this is “we will focus on improving how we sell and position the product” rather than “we will focus on improving the product” which is a big mistake to me. “Quality over quantity” is what we should be hearing, not “more races, more sponsors, more sales, more profit.”
Phil-F1-21
22nd September 2016, 20:14
+ 1. Their statement does not give me any sense that they will be good for the sport at all. How about making the sport better and doing more for fans rather than just expecting us to pay more.
UNeedAFinn2Win (@uneedafinn2win)
22nd September 2016, 19:42
They bought the Commercial Rights, so duh…
Tristan
22nd September 2016, 19:54
There’s two ways to sell a car. Make the best damn car the world has seen and it sells itself or make a bunch of dodgy cars on the cheap, and hire the best damn salesmen in the world to sell it. This statement leans too far towards the latter to me.
Tristan
22nd September 2016, 20:01
ps: apologies for salesmen rather than salesperson
Robbie (@robbie)
22nd September 2016, 23:37
I wouldn’t have expected Liberty to be jumping in on the quality of the product aspect, as new regs are already in place and we will have to wait and see if said changes improve the product. In other words I’m sure the hope is already there that the product will improve starting next year, so Liberty’s job is to get it out there to more people. Or maybe they are happy with fewer people watching but paying more? Hard to say right now.
BasCB (@bascb)
23rd September 2016, 6:23
Hm, well, I for one am rather GLAD that the promotor’s first thoughts are NOT about changing the sport itself but about improving how it is brought to the fans! @john-h!
On the one hand it is sad to see the sport behind pay walls, but on the other hand, it would be even sadder if they changed the sport to be “entertainment” by completely changing the weekend format, bring in things like fan boost, made to degrade tyres and went for Bernies shortcut ideas etc.
John H (@john-h)
23rd September 2016, 10:14
@uneedafinn2win You miss my point. You can’t have one without the other. Do you really expect the commercial rights holder to let FiA to do what it wants with the series? Duh…
@bascb I understand your point and I think I was being overly negative. I’m just hoping for some reassurance that we’re not talking about reverse grids and sprint races I guess – maybe they’ll have something to say about that in the future, especially as it would be nice to see how 2017 works out as a spectacle first.
BasCB (@bascb)
23rd September 2016, 12:50
It seems we certainly agree about being wary of “spicing up” the entertainment!
Dmitry (@albedo)
22nd September 2016, 18:03
“I think there’s a lot of things that can be done about gaming, VR [virtual reality] and AR [augmented reality].”
Just imagine every car had a 360 camera and we could connect to it using а VR headset Т_Т
Hamilzors
22nd September 2016, 18:32
Pure nausea
Tristan
22nd September 2016, 19:17
I remember there was talk (from someone in the know) of the camera’s being no where near the required quality on board for even 3D, let alone 360 VR, due to the extreme G-forces and vibration the cars endure.
I could totally imagine VR from fixed points around the track however. Valve have said that sporting events are a prime way to enjoy VR as unlike a movie it’s a far more social experience regarding talking to friends to while watching. That being said learning the right way to do it is still in its infancy, and certainly not ready for the prime time required by a sport such as F1.
petebaldwin (@)
23rd September 2016, 10:16
Imagine how good that would be? VR 360 cameras positioned at various turns around the track so you can effectively “sit in the stand.” It would get so many more fans involved if they could experience (more closely) what it’s like to attend an F1 race live.
Tristan
23rd September 2016, 19:12
Not only the stands, sit in the VIP box, sit at the apex, sit in the helicopter circling above. And there should be a pretty big degree of freedom for movement too. The tech to reproduce 3d environments from camera to traverse in VR is being developed quite heavily with many workable proof of concepts out there. Virtually walking on the track while the cars race by isn’t beyond the realm of possibility.
That being said though I simply can’t see it beyond occasional gimmicks for a long time, which makes me think Libery’s plan is either “pie in the sky” or extremely forward thinking.
Augmented reality is actually much more exciting to me. Imagine pointing your camera/tablet’s phone at the track (as people seem want to do lately) during a race and getting an overlay pop-up of that cars position, timing and a live gap to cars infront/behind. Could even get the racing line overlayed on the track like the codemasters games. That’s much, much, much closer to reality and could be done as soon as next year with a little investment in the right people.
Matthew
22nd September 2016, 19:55
So, Red Bull released a 360-degree video of Verstappen doing laps (can’t remember which track) on their Facebook page with telemetry data. I watched it on Gear VR when it first came out, and I don’t remember the vibration being too bad (to the point of motion sickness, at least).
The only real problem I had with it was the rendering quality, but that seems to be a universal problem with streaming VR videos at this point.
JeffreyJ
23rd September 2016, 0:44
I believe that was the TT Assen circuit in the Netherlands, last year.
Tristan
23rd September 2016, 19:33
Williams did something similar years ago (iirc) now too. I’m certain on those 360 camera proof of concepts the drivers aren’t pulling anywhere near the G’s they would or punishing the cars re: vibration from attacking curbs and such as they would in race trim.
I wish comments were easier to search because it was a pretty insightful comment from someone who worked in the industry down to knowing what cameras at what costs were used on the cars (iirc).
charliex (@photogcw)
22nd September 2016, 19:41
Right now, everything they say is speculative and nothing more. Here in the USA, F1 has been a pay television event for years because it is only accessible on a cable television channel that changed from season to season. NBC, the present broadcaster, will air the USGP and Mexican GP over free-to-air broadcast stations. However, NBC’s contract with FOM expires at the end of this season. I’m curious to see how they impact the digital side of things especially here in USA. The quote is very correct. Any second USGP will be a street race because no one is going to drop twice or three times the amount it took to build Circuit Of The Americas in New Jersey or California. And I just don’t see Mr. Ecclestone going away quietly either.
JeffreyJ
23rd September 2016, 0:50
If Liberty wants to grow F1 in the USA, pay TV is going to be a problem.
If you have ton’s of stuff you can do, watch or otherwise consume and you don’t know F1, chances are you are not going to buy a PayTV F1 subscription. It’s not rocket science.
kyorin
22nd September 2016, 20:07
There will be no sponsors if every country moves to PayTV only, the audiences will be so small that companies won’t want to pay nearly as much in sponsorship fees as less people will see their logos. The moment F1 becomes a Sky exclusive in the UK will unfortunately mark the end me being an F1 viewer (after watching it for nearly 40 years).
OLDDUFFER1
23rd September 2016, 15:20
Here, here! Also if gambling becomes an important aspect this is likely to lead to the corruption we have seen in many other so called “sports” (Even cricket!). If you are a true fan you are not just looking for “entertainment” (lots of crashes?) but are interested in the technical details, strategy etc. I really worry that an entertainment group has taken over and the effect this will have on the sport.
Stephen Crowsen (@drycrust)
23rd September 2016, 21:26
I think you are lucky to have had 40 years of viewing, but that aside, yes, I agree with your comments on corporate sponsorship: PayTV discourages it, or reduces the amount a corporation is willing to pay (depending on your point of view).
Clark Finlay (@ck2000)
22nd September 2016, 20:15
So if you want to watch F1 you need to pay, if you need access to the data (timing screens, lap charts etc) pay more if you want to see other streams (on board) pay a bit more and all the data will be used to try and encourage us to bet on the sport via a dedicated sponsor (Sky Bet in the UK no doubt). And they wonder why the viewer numbers are dropping like a stone.
Phil-F1-21
22nd September 2016, 20:24
I agree with Kyorin. As has been said by many people, the sport in my experience has a relatively small, middle-aged/older following as it is. If the main way of viewing it requires payment, how will this attract new viewers who have not seen it before? Similarly in other forms of media, why should free-to-air tv channels mention it at all in their programming e.g. the news or why should news paper even in digital form write articles on a psort with a dwindling fan base.
I get the impression that they are not all that worried about losing viewers in regions which have traditionally followed the sport as they think they will more than offset this by viewers in the U.S. or Far East.
Also how are the teams going to feel about up 25 races? They are going to want a lot more money. Maybe 3 car teams for the big boys as well as the number of smaller, independent competitors will surely dwindle.
tgu (@thegrapeunwashed)
23rd September 2016, 10:15
That’s my view too. A lot of middle-aged people (like myself) aren’t going to fork out for pay TV, so either I’ll find a pub which shows F1 (I believe the nearest is more than 10 miles away on country roads), or I’ll reluctantly quit watching. For younger viewers, it’s hard to see what might draw them in: who is going to fork out for on-demand viewing when at least 50% of the races amount to 3+ hours of tedium?
knoxploration
22nd September 2016, 20:34
Hear this, Liberty: The day you switch me to pay television if I want to watch races live is the day that I stop watching Formula One once and for all. I’ve been watching near-religiously for the last 25 years, although with the steep decline in quality of the racing, I’ve already switched to frequently skipping races entirely in the last 2-3 years. This quality of racing combined with a requirement to pay will be enough to persuade me that F1 is simply not worth watching any more, and I won’t be alone in that.
RACERNORRISKI (@racernorriski)
22nd September 2016, 21:26
I totally agree with you on every point you made in your comment. The endurance races are much more interesting and the LIBERTY coverage just maybe the best thing that has happened to their viewership in a very long time. Thanks, Norris
Maddme