Apple, Inc. recently announced a new Apple TV, and with it CEO Tim Cook dropped a bomb: The future of television is the app. In an era of dying cable television subscriptions, now is the time for Formula 1, for Bernie Ecclestone, to switch broadcasting models.
About a year ago, I wrote about NBC Sports’ challenge for better broadcasting in the fast environment of Formula 1 with a tiny blurb about competitive broadcasts; it’s time to expand on the latter, but let’s start with some history...
The Old Model
The almighty Bernie Ecclestone owns the commercial rights to Formula 1 and is in charge of negotiating the television deals that bring in the cash.
The way television has worked up until now: Bernie sells the rights for a company (say, NBC) to exclusively broadcast it’s live world feed (filmed and directed by Formula 1) to that company’s subscribers in a given region (Americans who buy cable packages) wherein said company can lay over other content (three fat men sitting behind a desk talking), should they feel that more important.
The broadcasting company (NBC) makes money from commercial-interruption advertisers and/or cable subscriptions and then subtracts out how much they’ve spent on the exclusive broadcasting rights: voila profit!
The New Model
I am not privy to how the current television broadcasting contracts shake out per country, but I would assume an exclusivity clause exists; this needs to be amended to something along the lines of, “exclusivity outside the official Formula 1 application/website/broadcasting-medium” (I will refer to this as application or app from now on, for simplicity).
This amendment would allow a country’s exclusive cable broadcaster to retain viewers not willing to access the application, be that for financial or knowledge constraints of leaving cable for internet-based viewing, and allow them an open playing field within the safety of their app.
Open Playing Field
I would very much like to see broadcasters competing for views within the application, be that country-locked or not. Sky F1’s relatively ad-free broadcasting could rival the ad-stricken NBC Sports for views. NBC Sports may hold a more trivial viewer’s attention where the Sky Sports broadcast would attract the viewer looking for more in-depth analysis (as their status-quo stands now).
We could also see new (indie?) broadcasters pop up to present the race to us.
With an open playing field, a broadcaster would have to pay a set amount per viewer per race (i.e. $1), and how they gained revenue would be up to them, be that through a subscription within the application, through advertising, or a balance of the two.
Obviously, better broadcasts would warrant a higher subscription cost, or better advertisers due to the increased traffic.
However, non-exclusivity within a region is not strictly necessary for this new model to work within the official Formula 1 app. A single broadcaster could easily establish tiers based on advertising content and still pay the same fee to Bernie for the broadcasting rights; this way, the broadcaster could rake in the money from viewers lost from exorbitant cable television pricing.
Here is an example of what I would like to see this new model evolve into:
Package Tier Cost
Current Example Broadcast
|Free Monthly Subscription||Lackluster broadcast with far too many ads.||NBC Sports|
|Low Monthly Subscription||Straight World Feed broadcast||-|
|Medium Monthly Subscription||Great broadcast with an occasional ad, but none that interrupt the race||Sky Sports F1|
|High Monthly Subscription||Great broadcast with no ads, ever.||Sky Sports F1 with no ads, ever.|
- Free Monthly Subscription ($0)
This is option is key in introducing new viewers to the sport as cable packages diminish, especially in America. Why would anyone pay a monthly subscription to something they aren’t yet passionate about?
- Low Monthly Subscription ($5-10)
Formula 1 produces a fine world feed with enough information for fans to track the drivers’ progress themselves; why put commentary over that?
- Medium Monthly Subscription ($15-20)
The choice I find most avid F1 viewers taking, counting myself among them. I love the Sky broadcast, I just want it in HD.
- High Monthly Subscription ($50-100)
Only dedicated F1 fans. In a world shifting to a hatred of advertising, this option needs to exist.
*Prices are just examples
Formula 1 is a fast sport and the boffins surrounding Bernie Ecclestone can’t be far away from looking this direction.
Can you tell I hate commercial interruptions yet?
image via Reddit