Sir Martin Sorrell, the chief executive of WPP and a member of the current Formula One Group board of directors, has given a wide-ranging interview to the official Formula 1 website, which is well worth a read. Sorrell, 71, is expected to earn a whopping £70 million this year.
Sorrell’s interview on the F1 website talks about a number of issues, including television audiences, Sky’s Formula 1 coverage and virtual reality. Sorrell speaks highly of live sporting events: “…despite streaming, despite the rise of tablets and smartphones – all the implications which in theory would make linear TV less important – live sporting events are extremely powerful. But it’s not the event alone – it’s also what’s surrounding it.”
Where the UK is concerned, I have always insisted that television is king. Overall, television audiences are declining slowly as the devices Sorrell mentions continue their surge. But, for the large sporting events, such as the upcoming European football championships and the Rio Olympics, television is the driver to these events. However, the reason those events are so popular is because they are easily accessible and free to the widest possible audience. The viewer does not need to download X app on Y device, the event is there ready to view without anything extra to do. If you hid either the Olympics or European championships behind a pay wall, audiences would plummet.
I find it odd that Sorrell talks highly about live events bringing people together in “powerful” ways, yet skirmishes over Sky’s Formula 1 audience: “When Sky UK started to broadcast there was an argument that audience would come down because it is pay TV. But the actual quality of the production and the use of technology and the engagement of the viewer is much better than it ever was. The product is simply better.” The product may be “simply better” with innovations such as the Sky Pad, but it comes at a price to the consumer. The cost for the consumer results in a diminishing audience, meaning that the live event is less powerful than in previous years. If you are reaching fewer people, you cannot make your voice heard as loudly as you once did before.
“Virtual Reality for Formula One could be fantastic – driving the car! In the Ridley Scott film ‘The Martian’ you can do that. I have lifted off in the space craft from the surface of Mars, walked in space and looked down into deep space and got terrified, with the headphones and the goggles. The technology is already incredible and will improve massively in the next few years. Think about what you could do. And there are some – Bernie and others – who are embracing new technologies.” – Sir Martin Sorrell, speaking to the official Formula 1 website
Sorrell sells the concept of Virtual Reality being part of Formula 1 in the future. Sorrell says “I said before that I believe that Virtual Reality will hit it big time. I know that some of my colleagues disagree, but I believe in it.” In the context of consuming Formula 1, I don’t see Virtual Reality being the next big thing. It works brilliantly in video games, but with Formula 1 I’m not as convinced, in the same way I was unconvinced about the hype over 3D a few years ago. Virtual Reality, whilst the technology is amazing, is a niche market. I would go as far as saying that less than 5 percent of Formula 1’s audience would be interested in Virtual Reality.
Sorrell also talks about generating interest from “other [income] models” aside from “getting a flat fee for broadcasting rights”, a statement that also feels odd given that Sky and FOM signed a near £1 billion broadcasting contract less than three months ago. The other model Sorrell refers to is presumably an over-the-top model where consumers are purchasing video content off FOM to watch at their leisure. Given the fees Sky paid, over-the-top is bound to be in conjunction with Sky as opposed to against Sky.
Lastly, Sorrell says that the fast growing markets (BRICS and Next Eleven) are key. For those wondering, those two groups cover Brazil, Russia, India, China, South Africa, Bangladesh, Egypt, Indonesia, Iran, Mexico, Nigeria, Pakistan, the Philippines, Turkey, South Korea and Vietnam. So, expect a lot more movement in those countries over the next five to ten years.