Google And You Tube Can Solve The Formula1 TV Rights Saga
The Indian Premier League (IPL), one of the world’s most successful cricket tournaments, created a stir in 2010 when they announced that all their matches would be streamed LIVE on Google’s YouTube website. It was the kind of deal only a Lalit Modi could pull off! And he did!
The IPL, much like Formula1, is a city vs city format (or a club vs club format, whichever way you’d like to see it) where teams compete over a 2-3 month period against each other to ultimately select a final winner. During various forums where I have explained Formula1 to newbies, I have often used this format of the IPL to explain how teams exist in Formula1 and how they compete over 9 months of the year to ultimately choose a winning team and driver based on a points-scoring system.
To me Formula1 was always the reference point while watching an IPL match. Whether it was the TV production, commentators and their knowledge, the insider stories or even their merchandising, hospitality and cheer leaders! After all, Formula1 has been around for 60 yrs and the IPL for only 4! However, there was one thing that the IPL went one up on Formula1 and that was when they signed the global live streaming rights for all the IPL matches.
By signing these rights, Lalit Modi, the erstwhile and now-ousted Chairman and Commissioner of the IPL pulled off a stunt that even Formula1’s Ringmaster Bernie Ecclestone couldn’t think of. The IPL – You Tube deal was a first for You Tube, where a major sports tournament was telecasted live on their website across the world. This deal opened up new viewer markets for IPL and of course brought about extra revenue opportunities for You Tube and Google. (There are restrictions too, but I am not in a mood to even discuss those!)
Leading up to the 2011 Hungarian GP, Ecclestone shared a new TV deal with the Formula1 teams (the FOTA), which actually would have put them in a fix. Come 2012, BBC and SKY sports would share Formula1 broadcast in the UK, which would mean that the sport for the first time in its history, would be aired on a pay-per-view channel in the UK. SKY Sports would now get the rights to broadcast all Formula1 action over a weekend and would share footage of a few prominent races with the BBC. This would effectively mean that Formula1 viewers would now need to shell out more (by my calculations: 300 GBP annually) to watch F1 on TV.
The immediate effects of this new TV deal will be on team sponsorships as TV viewing figures are expected to decrease in the short term. However, each team is expected to benefit about a million plus pounds due to increase in revenue with this new TV deal. Which is why I said that the teams would actually be in a fix!
F1 is taking a big risk by splitting their broadcast starting the 2012 Formula1 season. However, I can only imagine the possibilities should F1 tie-up with You Tube to broadcast their races live. I understand that You Tube can’t be the primary medium and can’t replace the TV, but should they use You Tube as an online medium, the expensive production and airing fees will be drastically reduced. Importantly, for the fans, telecast will only be around 5 mins delayed. Can Formula1 learn from the Indian Premier League?