Kunal's F1 Blog

Google And You Tube Can Solve The Formula1 TV Rights Saga

Posted on | August 3, 2011 | 16 Comments

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?

Comments

16 Responses to “Google And You Tube Can Solve The Formula1 TV Rights Saga”

  1. Suraj Patil
    August 3rd, 2011 @ 8:10 pm

    Yes, getting F1 onto youtube as well,along with the SKY/BBC telecast will be a good idea! For the spectators as well as in terms of revenues.. However,if this is the case,i guess nobody in the UK will subscribe to SKY just for f1 and everyone will switch to youtube! Then SKY will start hammmering Bernie again..lol

  2. Kunal Shah
    August 4th, 2011 @ 5:24 am

    Well SKY is anyways sharing broadcast with BBC, so they seem to be okay sharing their link. My assumption here is that SKY is okay, but the fan however is disgruntled over this new TV deal. Thanks Suraj.

  3. Asif
    August 4th, 2011 @ 3:29 pm

    To clear things up a little, it’s not Sky sharing it’s right with the BBC but the other way around. BBC gave up the rights because the government has forced it to cut costs.

    I don’t know how many of you have ever watched Sky Sports before but the football coverage is so over hyped and dramatic that most formula fans are already concerned what will they do with F1. The BBC coverage of the sport fronted by Jake Humphrey and co. in contrast was excellent programming and was BAFTA winner last year.

    Add to that the cost of £20-25 a month, if you already have a Sky connection else make it £50, that you need to pay to watch Sky Sports channels here.

    The BBC coverage was always ad free, don’t know how that will work out when the sport is aired on Sky.

    As for F1 revenues BBC were paying the top dollar for the broadcasting deal and was not getting any subsidized rates.

    What will effectively happen is that F1 in UK will cease to be a widely popular sport and watched by the middle and upper classes only who can afford a Sky connection.

  4. Mackinlay
    August 5th, 2011 @ 5:17 am

    Interesting view. But it would be pertinent to check on who accessed IPL on YouTube; audiences from which geographies. My hunch says that the audiences on YouTube would largely be the Indians spread across the globe. Indians in India would have by and large watched it on TV as against YouTube.

  5. Kunal Shah
    August 6th, 2011 @ 3:04 am

    Thanks Mack and Asif, good to read your views too.

    Asif, yes, it is BBC sharing the broadcast with Sky and not the other way around. F1′s primary audience is in the UK and they are for sure upset with this new TV deal. I wonder what will be the effect on the TV figures next season.

    Mack, I tried to get information on the YT-IPL deal, but the numbers weren’t too accessible. However, the YT deal also meant that the Indian working class watched matches from their offices (the earlier scheduled games). The YT-IPL deal might give an insight, but the BBC fans are seeking two things from any TV deal with Formula1. 1) free broadcast (not pay-per-view, which is expensive) 2) LIVE broadcast of all races.

    Somewhere the BBC highlights package does make sense to me. With F1 moving out of the traditional European markets, TV times aren’t as conducive to mass viewing as before. There are races that are telecast either too early or too late in the day. The viewing numbers during this broadcast surely isn’t as high as a typical Sunday afternoon broadcast. I hope that Bernie has done the math on the ratio of viewers dropping for these races and then done the BBC-SKY deal.

  6. Sahil
    August 7th, 2011 @ 10:59 am

    A 5 min delay in F1 is unacceptable. Live Timing will be tossed out. And remember, IPL on youtube was watched in low-res in India because of our broadband speeds. If F1 is broadcast on YT and accessed from Europe with T1, T3 lines, it’ll be very close to or even better than non-HD TV, effectively shifting the entire TV audience to YT. Sky would never allow that.

  7. Kunal Shah
    August 7th, 2011 @ 4:31 pm

    Sahil, I agree that a 5 min delay is unacceptable in F1, but it is better than a 5 hr delay, which could be the case should you be a BBC viewer, unable to purchase a SKY connection.

    SKY is anyways sharing telecast with BBC and there could be sharing with YT. However, your point is valid, no doubt. But again, the power of the internet can’t be ignored going into the future & signing TV deals for the future. In this case, F1 could certainly benefit by exploring the YT option.

  8. Berty_McJock
    November 23rd, 2011 @ 8:15 pm

    ‘ello. followed your link from the bbc website. interesting about youtube, the only problem i can see being download limitations (a 2 hours race on a sunday afternoon would annihilate my download limit, and my bandwidth would be throttled, possibly before the race had even finished).
    i do however feel the need to point out, that the main cause of upset in the uk is not that we have to pay sky to watch F1 (i cant afford to, a quick correction…it would cost £600/year, as you need a sky subscription AND a sky sports subscrition), but that the bbc entered into a deal with sky, while still under contract, thus stopping FOM (formula one management) from accepting offers from other free to air channels, thereby extending the bbc deal, and killing off the competition.

    nice to see you taking an interest though, as here in the uk we do feel strongly about this, and its nice to see its been noticed. thankyou.

  9. Kunal Shah
    November 24th, 2011 @ 9:04 am

    Thanks Berty for your comment and I do see what your view about the BBC-SKY deal is. BBC and FOM did play a good trick here.
    Also, I didn’t factor the download limit, which I am glad you have brought up.

    The only way you could make the cost decision is by considering the cost of increase in bandwidth and compare it with the high cost that SKY would charge.
    However, for this to happen, F1 needs to go LIVE on YouTube :)

    Keep racing!

  10. Tilak
    December 23rd, 2011 @ 12:04 am

    u gotto run live contests or mic up one of the drivers to keep the fans hooked on utube! ;)

  11. Chris Thompson
    February 22nd, 2012 @ 5:45 pm

    F1 on you tube would not be good, for f1 to come across well you need a large plasma or LCD screen, ideally 40″+, watching a race on a 15″ laptop with tinny speakers would be horrendous viewing experience.

  12. Kunal Shah
    February 23rd, 2012 @ 7:49 am

    True Chris that the viewing experience might not be too good. But should the quality of the production be fine, it could surely be blow up on a big screen, but of course, not on a 40″! It could solve the TV rights saga though.

  13. Pavithra
    February 22nd, 2013 @ 1:04 pm

    Good point, but if only Indian 2G data connection quality is good enough!!!
    Although there are 3G & more recently 4G data connections, large majority of Indians still use 2G, hence watching a live stream is gonna be a tad painful for a big majority even if the deal works out, i guess.

    Also, i tried watching one of the last year races online from one of the site’s from UK & it wasn’t good with my data connection.

  14. Kunal Shah
    February 23rd, 2013 @ 6:09 am

    Yes, this is bandwidth driven and relies heavily on the quality at the end user. We don’t have the best services yet, but hopefully it will improve by the time F1 decides to go the YouTube way!

  15. LATESH
    February 26th, 2013 @ 3:48 pm

    sorry for the late arrival at the party,,guys

    but M here to share a bit of some rough info…

    way back , may b 2010 some news dropped onto my ears about a deal of broadcasting of Spanish GP in Spain through a mobile network, live on the user’s smartphone. I guess it may b Telefonica, M not sure.

    The point is that how many Indians would sacrifice their weekend get together or even family movie on TV for F! ????

    so the entry points need to be re mapped..
    && with so many telecom biggies associatd with the sport,, Vodafone ,Airtel, Tata Comm.

    U exactly know how I m visualising the future !!

  16. Pavithra
    February 27th, 2013 @ 3:20 am

    Haa, via smartphones!! – I think the 3G connection in smartphones are anytime better than the 2G connection, so I’m sure at least 60% of smartphone owners use 3G in their phones – so if this deal works out, it should be good.

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