“The new deal is a great step forward for Formula One in Australia,” said Network Ten CEO Hamish McLennan on Friday morning. “It will ensure bigger and better coverage for motorsport fans.”
Here’s the thing, though: it isn’t a great step forward.
Friday morning provided confirmation that Australia, as is the case with a growing number of countries around the world, will switch to a pay TV-dominated model of Formula One coverage from this season – a full year earlier than anticipated.
The bargain struck between Network Ten, the self-proclaimed home of motorsport, and Fox Sports Australia, the other self-proclaimed home of motorsport, will see Foxtel broadcast every Formula One session live and in high definition while Ten simulcasts just 10 races live, and airs a one-hour highlights package for the others.
It’s a carbon copy of the pay–free combination model currently being used in the UK. So alike are the two that Fox Sports will be carrying its British counterpart and Murdoch stablemate Sky Sport‘s Formula One coverage in Australia in its entirety.
Of this deal we can say this much: coverage will improve. For all the affection we have for a bleary-eyed Greg Rust slogging through the middle of the night start of the annual dead-of-winter Canadian Grand Prix, Sky Sport‘s Formula One coverage is light-years ahead of just about anything any other broadcaster produces anywhere. Not that I’ve watched any from Australia, of course.
Now for the bad news. Television ratings in the UK have declined since exclusive free-to-air broadcast rights, then in the hands of the BBC, were dissolved and divided among it and Sky Sports.
And there’s more bad news. Formula One’s television viewership is in a state of decline around the world, particularly in Europe.
That viewership would decline was a prevailing concern for teams reliant upon maximising eyeballs on their ad-strewn liveries. Indeed, Formula One boasts that it is the most watched sport in the world, only to be outdone by the Olympics and the FIFA World Cup, which is music to an advertiser’s ears.
It is an unfortunate coincidence that on the day the latest blow was dealt to Formula One free-to-air, Ron Dennis announced McLaren’s abandoning of an almost two-year search for a new title sponsor.
These subtle strategic moves on the part of Bernie Ecclestone and Formula One management are all about maximising revenue at the expense of the teams. Advertising through the commercial rights holder is more cost effective for the buyer, but siphons opportunities to make money away from the teams. Television revenue works similarly, with management earning more money than they would by selling rights only to terrestrial broadcasters, but robbing teams of their earning capacity.
The end result? Formula One becomes a pure franchise. It is needless to have a number of proprietary teams when customers could simply buy into the sport and race control cars selected from a small pool of manufacturers. Costs are kept low – as is the demand from competitors to see a greater percentage of the sport’s revenue – and the commercial rights holder has total control over the product and associated risks.
We already see this in the calendar. How many circuits do we visit each year that are virtually identical to the viewer? How many vast stretches of pale asphalt will it take in a single year to numb the sense of location and identity? Race tracks, once the breathtaking backdrops to do daring feats of driving courage, have been homogenised to become scarcely more identifiable than one McDonalds is to another.
But I digress, Formula One in Australia is the real loser in this situation.
It is a tricky thing to pin down, because the viewer is not necessarily the loser. If you can afford the $50 per month, your viewing experience will be exponentially better for it. The casual viewer, meanwhile, will stop watching. Some may care. A number will probably be satisfied with the combination of repeats that Ten may or may not put in the place of its Formula One coverage.
Instead it is the fan-base as a whole that will suffer. The United Kingdom was able to bank on a significant percentage of its Formula One followers being far more than mere casual viewers when it made the switch, and it was largely proved correct by viewer numbers declining but refusing to collapse. The same goes for much of Europe.
But can Australia bank on a similar number of core fans to thrive in this environment? The answer, I fear, is no.
The numbers – that Formula One late on a Sunday night rates a few hundred thousand and Foxtel subscribers sits stubbornly at around one-third of the population – do not bode well. The last sport to be simulcast on free and pay TV also produced damning results, with the ABC attracting more than two million viewers to Fox Sport‘s 442,000 for the final of the Asian Cup. The numbers make for ugly reading.
For those core fans, how many times last year, in Daniel Ricciardo’s breakout season, did someone show a sudden burst of uncharacteristic interest in Formula One? The Ricciardo effect, as it has been dubbed, was huge over the last 12 months thanks largely to the ready availability of the season on free-to-air as the casual viewer flicked channels on Sunday night.
After all the numbers, the greater role pay TV has to play in Formula One’s grand scheme for revenue maximisation, and Greg Rust’s return to domestic racing, this is the real problem: ratings tell only part of the story of Formula One’s sudden and very real leap from the minds of diehard fans into the public consciousness over the last 12 months.
After the generation of so much momentum, is it all about to come crashing down in 2015?
Brawlsinmauls
Guest
Sorry to go off topic but what is motogp coverage like on fox?
Michael Lamonato
Expert
I think Jonathan Liew from the Telegraph offers an interesting perspective on the idea of sport on pay TV: http://www.telegraph.co.uk/sport/11358117/We-should-follow-Australia-in-protecting-free-to-air-sport.html
Michael Lamonato
Expert
You'd think it'd be only a matter of time until FOM gets its stuff sorted and starts offering direct subscriptions to digital content, as is the case with most major US sports. I'd be on board with that – if it's offered at a fair price, of course.
Julian Hardy
Guest
Hear hear! I would happily subscribe to a F1 streaming HD service for each race, but there is no way I am going to subscribe to Foxtel for $50 per month (plus installation costs) just to get my F1 fix on the 10 races that Channel 10 isn't showing live.
Julian Hardy
Guest
“It will ensure bigger and better coverage for motorsport fans.” This is an example of usage of the term "bigger and better" that I haven't seen before. How exactly is it "bigger and better" to watch 10 races live and 10 races in a delayed "highlights" package, compared to a full season live (as in the last few years)?! And people wonder why F1's global TV audience is declining every year?!
GB
Guest
As a Foxtel subscriber, and Formula One fan, this announcement was like Xmas to me. The Sky UK Coverage is absolutely fantastic, and has full coverage across the weekends. I used to download the practice sessions and then watch them before the race, but now it will be real time. The Foxtel HD picture quality is miles ahead of the OneHD picture quality. Even the downloads used to be better picture quality than OneHD, so that aspect is also a great boost for fans who have Foxtel. Having to juggle between OneHD for qualifying, then Channel 10 for the race, except if there was something else on channel 10 at the time, it would go back over to OneHD, was confusing and stupid. Its unfortunate that they haven't simulcast all the races across both networks though. Having just one race a month on free to air is never going to be received in a good light by most, as seen by the comments here and everywhere else.
Mark Young
Roar Guru
Hi Rupert, thanks for stopping by the roar, hope you enjoy it. Ignoring the entire Liberal/National Murdoch Mining theory you have presented and making a quick comment about the NBN. When you connect Foxtel, they have to pay for a cable running into your house (or the dish on your roof), connect it to a box they have brought along and connect it into your TV. With the NBN, the government if effectively paying for the cable to run into your house, you are paying for your own connection and box with a modem or internet TV. The content that Foxtel has, is provided to you with less expense to Foxtel if you are watching it through the NBN then through a dedicated Foxtel connection. I'm pretty sure that is why the NBN is quietly being installed in the background with cheaper and slower methods but much much much faster completions.
Distant Knight
Guest
Selling the rights to Foxtel is not short sighted at all. FOM have their money for the deal for the next 5 years, it's now up to Foxtel to be able to use this new product to try and attract new subscribers. In terms of advertising, FOM would be counting on pay tv subscribers being more likely to spend money with their sponsors. If that happens, they don't care if they lose some of the free viewers. The short sighted part from FOM comes in the lack of a direct live streaming service from them. They couldn't even get their live timing etc to work properly last year, so that might be asking a bit much I guess...
SM
Guest
It's certainly sad stuff, the short-sightedness in this decision is remarkable.
Alex
Guest
Hopefully foxtel will offer up a similar package to the one they currently do with the premier league. If not, i'll see how i go, i've been downloading the full sky weekend coverage (except practice) for the past 1 and a half seasons anyway. Still much cheaper than $50 a month.
Pete #205
Guest
Sad news really. The thing is, why do I have to shell out for Foxtel? Why, in 2015, do I have to pay anyone to deliver to me what the FIA/F1 could deliver to me directly?
Simoc
Guest
I guess the Asia Cup final says it all. The viewers are there but aren't going to pay for it. I certainly won't. McLennan has been hopeless for Channel 10, the worst run TV station in Australia. Even with Big Bash rating heaps they took it off live in Brisbane to show their normal banal rubbish. So I'll just watch live tracking when it's not on live. Even that has gone backwards. I think you're wrong Rabbitz. Sports with free to air continue to grow. Those without wither. Super 15 and basketball are the most obvious examples here.
Rabbitz
Roar Guru
The world has changed. We are over-saturated with advertising especially on television, and as viewers we tend to tune out to the advertisers message - which has led many organisations to believe that that their marketing budgets can be better spent elsewhere. Couple that with falling viewership numbers in general, has caused the FTA model of advertiser funding to become less profitable and effective than it once was. Paying for content is fast becoming "the way of the future", so subscription TV, Pay per View streaming and other similar delivery methods will become the norm. Content is king and if you want to see the content you are going to have to pay. It is sad but the FTA networks simply cannot compete, dollar for dollar, with subscription models. Of course here in Oz we get doubly screwed as there is a monopoly Subscription TV provider, who is owned by a media baron that has one of the major political parties by the short and curlies, and his hands down the pants of the other. Thus the predatory behaviour is excused and many regulatory barriers are put in place of any competition - 1940's copper technology in a national broadband network anyone? So I am afraid that it is a case of get used to paying to watch sport. The freebie model is fast falling into an abyss.
Wilson Flatley
Guest
My feeling is that if your not willing to shell out the 10 bucks a week through the season then you probably aren't an advertising target for them. This is why basically every sport is going towards a free/pay split model.
Nate
Guest
There goes my F1 watching habits. I enjoyed it while it lasted but I'm not one to be getting pay TV any time soon. That's at least one fan down.
Bayden Westerweller
Roar Guru
The core viewing base will inevitably recede. The casual viewer who tunes in solely for the showpiece events won't notice much difference, but ultimately those willing to invest in Foxtel will enjoy a sensational outcome. A critical factor as you indicated - is the "Ricciardo effect.' Should he continue to prosper, many will initially miss out, yet they may become inclined to make an eventual investment. Certainly not on the scale enjoyed by Ten, but if he is a long-term championship proposition, there will be those willing to pay up. I'll be making the investment purely since this is the coverage I've dreamed of for years - when I stayed in the UK in 2010, I was blown away by what was then comprehensive BBC coverage, and now with the Sky Sports coverage on offer in its' entirety, it's too good to pass on.
Rupert Murdoch
Guest
When the Liberal/Nationals get elected their handlers, the Rupert Murdochs, the mining bosses call in their favours. And in Grand Prix's case, Murdoch lobbied to have F1 removed from the anti-siphoning list and to can the construction of the NBN(notice how that is no longer mentioned in media circles). End of the day, you lot voted this government in and you can deal with it now. You sleep in the bed you made for yourselves Australians!