Can Formula One survive a post-free-to-air world?

Michael Lamonato Columnist

By Michael Lamonato, Michael Lamonato is a Roar Expert

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    Formula One driver Daniel Ricciardo of Australia and Red Bull Racing speaks with members of the media after taking part in a rafting session in the Lachine Rapids. (Photo by Dan Istitene/Getty Images).

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    Both Lewis Hamilton and Mercedes will vie for their respective Formula One titles at this weekend’s United States Grand Prix, but only around 30 per cent of Australian households will have the opportunity to watch it.

    The sport moved exclusively to pay television this month.

    Free-to-air Formula One was wrenched suddenly from television sets during the Malaysian Grand Prix weekend, reducing Network Ten’s ten-race live allocation to just one race – the Australian Grand Prix, legally mandated to be available for free – in what is now the new norm for Australian audiences without access to the viewership wilderness of pay television.

    It would be unfair to say that Ten has acted in poor faith with fans, however, with its hand – or perhaps more accurately the hand of administrator KordaMentha – forced by the mechanics of the ailing network’s impending acquisition by CBS.

    A creditors report released last month reveals that Formula One is an unsecured creditor in the station’s demise and that the successful CBS deal would repay only $2 million the $20 million owed to it.

    Needless to say F1 was unlikely stand idly by and cop such a loss, and F1 global director of media rights Ian Holmes alluded to as much in his statement.

    “Following the recent difficulties at Network Ten, our first priority was to ensure that Australian fans of Formula One remained able to watch the championship without interruption,” he said.

    “I’m pleased to say that, having moved quickly, it is now guaranteed that anyone in Australia who wishes to watch … will be able to do so …”

    Foxtel, however, remains pricy, with a cable subscription including sport coming in at $55 per month. Foxtel Now, a lightweight online service, reduces that by $16, but with only around 50 per cent of the country connected to the NBN, live television streaming is frustratingly unreliable for many, including this writer and his humble ADSL connection.

    Where does that leave Formula One in Australia?

    To put it lightly, in a fair bit of trouble.

    Australia has always had a core Formula One following, but there’s no denying the bulk of it stays afloat on the success of Daniel Ricciardo. When Daniel’s up, so too is news coverage and social interest; when he’s not, it’s not.

    An Australian colleague put the question at the Japanese Grand Prix: what happens when, sometime in the next decade, Daniel hangs up his helmet?

    Daniel Ricciardo of Red Bull laughs during an interview with Formula One reporters.

    (Aron Suveg/Red Bull Content Pool)

    Can Formula One still be sustainable in Australia without a home hero to cheer on at 10pm on a Sunday evening? Certainly the nation’s ongoing enthusiasm would have to be called into question, as would be the health of the Australian Grand Prix itself, for which race organisers have openly acknowledged the ‘Daniel Ricciardo effect’ has boosted ticket sales.

    With no other Australian Formula One hopeful on the immediate horizon, drawing the conclusion Formula One’s popularity in Australia is on the precipice of a terminal downward spiral is worryingly easy.

    There is, however, a sliver of light in this increasingly dark tunnel.

    One week after Foxtel’s announcement a similar proclamation was made for the United States market. Broadcasting rights will transfer to ESPN from next season in a shock move that ends NBC Sports’s four-year association with the sport – but it’s the latter’s exit reasoning that is most interesting.

    “In this case we chose not to enter into a new agreement in which the rights holder itself competes with us and our distribution partners,” its press statement read, making a not-so-subtle reference to over-the-top broadcasting apparently being on Formula One’s horizon.

    Could broadcasting direct to the consumer, cutting out the expensive Foxtel middleman, be the solution to keeping F1 in the Australian consciousness?

    The only question, naturally, would be the cost to view. Foxtel subscription numbers remain modest because the price point is high; Formula One would have to find a happy medium between affordability and profitability.

    However, a non-scientific straw poll of internet forums and comment threads – emphasis on the non-scientific – suggests that Australians are generally unwilling to pay for most content. This is exhibited across a range of media, from news websites to television, and indeed one could set a watch to the regularity of articles calling Australia the world’s piracy capital after each Game of Thrones release.

    But on the other hand, according to a Deloitte report, in the reasonably short time Australia has had access to a healthy gamut of entertainment streaming services their subscription rate has grown beyond that of Foxtel, a 22-year stalwart of the media landscape.

    A question of the right content for the right price, surely – but that balance is easier said than achieved, putting great onus on what Formula One does next when it comes to the sport’s future in Australia.

    Michael Lamonato
    Michael Lamonato

    Michael is one-third of F1 podcast Box of Neutrals, as heard weekly on ABC Grandstand Digital nationwide. Though he's been part of the F1's travelling press room since 2012, people seem more interested in the time he was sick in a kart — but don't ask about that, follow him on Twitter instead @MichaelLamonato.

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    The Crowd Says (33)

    • Roar Guru

      October 17th 2017 @ 9:20am
      spruce moose said | October 17th 2017 @ 9:20am | ! Report

      F1 need to go direct to the consumer.

      I’d pay $90 a year for a season pass, that includes just qualifying and the race.

      If people want to pay more for an all access pass for all sessions…let them.

      • Columnist

        October 17th 2017 @ 9:24am
        Michael Lamonato said | October 17th 2017 @ 9:24am | ! Report

        Absolutely right, mate. It’s a fairly big hole in the broadcast offering, plus it means the sport doesn’t have its own outlet to develop its narratives throughout the year through a world beer commentary team and other F1-produced shows.

        But I think that over-the-top sort of service is imminent. F1 is certainly technically capable of it — it’s already figuring out how to stream 360-degree footage without processing delay — so I’d imagine it’d become available in the next season or two.

    • October 17th 2017 @ 9:50am
      Simoc said | October 17th 2017 @ 9:50am | ! Report

      I’m sure Liberty media will come up with something. They seem to be progressive as opposed to before them. Thank goodness we still get Moto GP free to air. That was a sensational Japanese GP in the wet. Hate to think we could miss F1 races of similar excitement.

      • Columnist

        October 17th 2017 @ 10:53am
        Michael Lamonato said | October 17th 2017 @ 10:53am | ! Report

        Yep, I think they will. Fortunately I think the care they’ll certainly take activating the tricky US market will benefit us — I think our audiences are a bit similar in that we’re detached from Europe but still comprise some core racing fans. The question is whether we can be convinced to take that extra step to seek out (and probably pay for) whatever services are provided.

    • October 17th 2017 @ 10:33am
      Dave said | October 17th 2017 @ 10:33am | ! Report

      As we have only got highlights for the past year i was loosing interest in F1 here in Australia , after 22 yrs i am walking away now the yanks have killed it . .

      • Columnist

        October 17th 2017 @ 11:46am
        Michael Lamonato said | October 17th 2017 @ 11:46am | ! Report

        Thanks for the comment, Dave. It’s been a real shame Ten has been able to carry only a handful of races — you do definitely lose track of the narrative over time, and you probably already know the result by the time the highlights go to air the next evening.

        I wouldn’t blame the American owners, though — they’ve been saying for some time they want to pull back from pay TV, but in this case their hand was forced. They’re doing good work, and in all honesty the only reason there’s hope for the future is because Liberty replaced CVC at the top of the tree.

    • Roar Pro

      October 17th 2017 @ 10:33am
      Alexander Clough said | October 17th 2017 @ 10:33am | ! Report

      I believe there is definitely a market there as long as the product being offered is worthwhile. A case in point (and very un-scientific) is the amount of NBA/NFL league passes my (mostly millenial) friends have.

      They’re able to watch any game, HD, in full or highlighted and able to keep up with the breaking stories/drafts/pre-season.

      Comparatively, I have no idea if anyone has NRL/AFL passes and tbh don’t even know if they’re still available.

      Something I believe could be done much better in F1 is explaining all the technical details in regards to tyres, hybrid engines, etc. Admittedly, the commentary team already does a great job of this, but newcomers would have no idea what’s going on. Although I guess it requires people actually knowing all the intricacies of F1 which would be a feat in itself.

      Also, it would be good to see profiles of up-and-coming drivers so we get to know them before they burst on the scene. Nothing like raving about a kid to your mates and bragging when he makes it.

      • Columnist

        October 17th 2017 @ 11:56am
        Michael Lamonato said | October 17th 2017 @ 11:56am | ! Report

        Thanks for the comment, Alexander. I reckon you’re right, especially when it comes to the extra detail. I imagine (or I hope, at very least) that when F1 does eventually make it down the ‘season pass’ route it isn’t just streaming the races with Sky commentary — the best outcome would be a dedicated F1 world feed commentary team along with original programming that covers all these aspects to make it accessible for newcomers and long-time fans.

        As for the up-and-coming drivers, I think this is definitely in the works — in fact I wouldn’t be surprised to see Formula One adopt a MotoGP-style racing hierarchy once F3 replaced GP3, having all three race each weekend. All three should be available on TV and on the internet stream, allowing you to keep up with all the F1 hopefuls before they make it to the main game.

        • Roar Pro

          October 17th 2017 @ 12:35pm
          Alexander Clough said | October 17th 2017 @ 12:35pm | ! Report

          Exactly, and a nice touch in the lead up to each race would be a little detail on the host city/track and it’s history – especially areas like Brazil, Mexico, Japan which has fantastic recent history.

          That world feed would be brilliant, although given the sway Sky holds with F1 (surely the #1 partner other than maybe Pirelli) I wouldn’t hold your breath. You’d have to convince some of the synonymous voices to come over too.

          Yes absolutely, that would be a great step. As a casual F1 follower at the moment nothing engages me to connect with F3 but I’d definitely prefer it in the race lead-up compared to talking heads.

          This really should be in cooperation with FTA though, especially in this country and the UK where pay-TV numbers are around Australian levels. I don’t know the story in the rest of Europe or Asia are though – I’m sure Liberty will be very interested in those makes though.

          • Columnist

            October 18th 2017 @ 8:55am
            Michael Lamonato said | October 18th 2017 @ 8:55am | ! Report

            Yeah, I share that concern about Sky. The station does a fine job, but at the end of the day it’s the British broadcaster — either it stops playing to the Hamilton/British audience or F1 should put together its own neutral team.

            I’m optimistic the new commercial rights holder will make an effort to move back towards FTA in these sorts of markets. At the end of the day viewers do count, even if they’re not immediately monetised by subscription fees. How this happens and when, though, is anyone’s guess given the various contracts already in place.

        • October 18th 2017 @ 9:11am
          bazza said | October 18th 2017 @ 9:11am | ! Report

          The NFL season pass is 280 a year. So season pass is not always cheap option. That’s for less than 6 months of games. However it does give you condensed games in option which is an awesome feature and allows you to watch a NFL game in 35m

          • Columnist

            October 18th 2017 @ 2:46pm
            Michael Lamonato said | October 18th 2017 @ 2:46pm | ! Report

            MotoGP, as I understand it, is around the $200 mark for a season pass (not considering preseason discount rates, which are more like $150, nor the discounts you get if you subscribe later in the season). That’s approximately $12 per race, which isn’t terrible value, especially when you consider the video offering is fairly comprehensive. But, like you say, the sheer quantity of content can’t match a league like the NFL, which is better value in that sense.

            That’s why I think what F1 provides on top of the races themselves — other programming, pre and post-race shows, commentary styles, camera angles etc — will be important. Maybe a subscriber would have access to the back catalogue of races, for example. That’d be pretty epic.

    • Roar Pro

      October 17th 2017 @ 11:44am
      Darren M said | October 17th 2017 @ 11:44am | ! Report

      My interest in F1 has waned recently. The lack of FTA coverage means I forget to check when it was on. Now it’s gone completely, I will probably not remember to watch any of it.
      I don’t have Foxtel at home, but family members do. I visit them for the football, but I cannot see myself rocking up at 10pm on a Sunday.

      My interest in Supercars also has fallen away since it’s no longer on. I couldn’t even tell you what teams are competing in that.

      Really, for sport to grow in this country it needs decent FTA access. We don’t have a pay-tv culture unlike so many other developed countries. Mostly that’s because Foxtel offered too little, too late for too much.

      • Columnist

        October 17th 2017 @ 11:59am
        Michael Lamonato said | October 17th 2017 @ 11:59am | ! Report

        Thanks for the comment, Darren. I think a lot of people probably share this experience, which is a sad but not unsurprising effect of sport moving behind a paywall. The 10PM starting slot, as you highlight, is a particular difficulty, too. It’s not like it’s easy (or even preferable) to head to the pub at 10PM on a Sunday night to watch the race, so for F1 it’s particularly costly.

        Would an F1-provided streaming service be something you’d consider subscribing to, though? The answer to this question is what will be of real interest to the sport for the next five years, I think.

        • Roar Pro

          October 24th 2017 @ 11:51am
          Darren M said | October 24th 2017 @ 11:51am | ! Report

          Honestly, I doubt I would, unless it was less than $30-40 for a whole season.

          You’d be lucky to find F1 on at a pub anyway. More likely, they would change the channel to rugby, football, cricket, or even golf if there was no NRL/AFL on.

          The 10pm (or 2-3am for races in the Americas) makes it difficult, but I think the fact that there is only one race anywhere near Australia is also a major issue. Lack of local access means people aren’t as engaged as they are with a sport they can turn up to every week.

    • Roar Guru

      October 17th 2017 @ 12:34pm
      Chris Kettlewell said | October 17th 2017 @ 12:34pm | ! Report

      The direct coverage can be good for people who are already really into it and are going to want to watch it all the time. I’ve got a friend who has the NFL and NBA passes and loves it. I personally find that while I love sport I just don’t have the time to watch lots and lots of it. So the idea of paying for something like that just feels like a waste because I’d barely watch much of it. That’s where FTA coverage is particularly good. For people like me who love my sport, and love it when something is on and I’ve got some time to sit down and watch it, but can’t justify spending money on something I’m not going to be able to watch much.

      So such things keep your hard-core supporters going, but don’t help at all with the more casual supporters. That’s where you’ll just lose people.

      Also, compared to something like NFL / NBA where you have lots of games every week, more content than anyone could ever watch, F1 is basically a case of one race every week or two. That’s a lot less content for people to watch on their online subscription, even if you include all the support races. So it would be interesting what would be considered a reasonable price for it to be considered decent value compared to things like NBA/NFL passes.

      • Columnist

        October 18th 2017 @ 1:22am
        Michael Lamonato said | October 18th 2017 @ 1:22am | ! Report

        You raise some good points, Chris. In particular how F1 prices itself and then justifies that price when most other sports are working with substantially more content and the fracturing of the market. I’ve often thought about what happens when content, not just sport, splits into more and more exclusive channels. If people only subscribe to one or two of what could be 10 different streaming providers, inevitably they’re going to miss out on some things. It’s an interesting question we’ll have to confront one day.

        I think a happy middle ground would see more comprehensive highlights of each race on FTA and at a more competitive time than late Monday night — enough to follow the sport and retain that vital stumble-on value you talk about for casual viewers but not so much a hardcore fan wouldn’t be interested in moving up to a paid tier of coverage.

        • Roar Pro

          October 24th 2017 @ 11:54am
          Darren M said | October 24th 2017 @ 11:54am | ! Report

          The problem with highlights is that most sport is watched live nowadays, and results are known immediately. There is virtually no appetite for highlight packages, hours or days after the event.

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