28/05/2013
NEWS STORY
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In early 2012 Formula One held a press conference to announce the signing of a sponsorship deal with Tata Communications which became the sport’s official technology supplier. At the event F1’s 82 year-old boss Bernie Ecclestone was asked why it had taken so long to sign a deal like this and, in response, he quipped that he is “getting old.” A recent article written by Pitpass’ business editor Christian Sylt suggests that Ecclestone is trying to make up for lost time.
F1 has long lagged behind other sports when it comes to broadcasting advancements. Although it was one of the first motor sports to use on-board cameras, in was one of the last to switch to being broadcast in HD and still isn’t shown in 3D.
Perhaps it is down to the fact that Ecclestone was one of the earliest adopters of digital multi-feed technology which allowed viewers to choose from a number of different cameras. It was launched in the late 1990s but after poor take-up it was discontinued just a few years later.
Then there is the fact that in 2002 the F1 Group, which owns the rights to the sport, had to pay £5.6m ($8.5m) for the F1.com domain after failing in legal action against a company which was using it. Since then Ecclestone’s approach to technological developments seems to have cooled but signing the Tata deal may have ignited it again.
Tata plugged F1 into its network soon after the deal began and one of its biggest strengths is that it has the largest network of undersea cables in the world. This allows it to transmit data at a far higher speed than by using satellites, as F1 previously relied on, and it also significantly increases capacity.
F1 now has fixed line connectivity at all Grands Prix. Importantly, this means that it is always connected, unlike a satellite which is only on for several hours at a time, and it is bi-directional. This allows individual fans to demand specific content and potentially interact with it in future.
Targeting specific fans opens the doors to them requesting specific content and Sylt’s article, in American motor magazine AutoWeek, reveals that F1 is considering making races available live online at the same time as they are shown on television.
At the moment, the rights to broadcast races online lie with each of F1’s broadcasters and they have to ensure that the footage cannot be viewed outside their home country as it could reduce TV viewing figures elsewhere.
However, the F1 Group is considering removing the online entitlement from each broadcasting contract so that it could charge viewers to watch races live on its own website.
The plan is buried deep inside the 498-page prospectus for the planned flotation of F1 on the Singapore Stock Exchange.
On page 144 it states that “we are in the initial stages of developing our digital media assets. The right to stream races online is typically licensed out to our broadcast partners around the world but we may consider changing our model and exploiting them independently in the future. As the exclusive rights holder to the World Championship, we have the benefit of controlling both our online platform and content which gives us a wide range of opportunities to monetise our rights, including through internal and third party solutions.”
It adds that “we will continue to enhance the digital experience over time for our fans by exploring new opportunities including allowing access to premium digital content as well as adding additional language options to our website.”
It would not take a great deal of time to implement the plan because 56 out of F1’s 63 broadcasting contracts expire before the end of 2015 so the online entitlement could be removed then. Furthermore, the ten largest contracts accounted for £240.2m ($363.3m) in 2011 and half of them are amongst those which expire by the end of 2015.
Each contract typically has a duration of between three and five years. Competition law in the European Union stipulates that the contracts have to be limited to five years in countries where a race takes place and three years elsewhere. Time will tell whether the right to stream F1 online will be included in the next wave of deals.