The over-the-top challenge facing motor sport

Over-the-top broadcasting. It is a phrase many visitors to this site will have seen referenced repeatedly, and it is only going to become more prominent as time progresses.

What it means is relatively simple: to deliver a service direct to the customer watching at home, rather than through a third-party satellite television channel or cable platform.

In the modern media landscape that poses many questions as to what the right or wrong approach is to take, if there is such a simple answer.

Motor sport faces a major challenge in not only understanding the landscape, but also exploiting it, satisfying stakeholders, and most importantly broadening the reach of the sport in the process.

An upward struggle
Whether it is MotoGP, World Rally Championship or Supercars over in Australia, most of motor racing’s big entities have an over-the-top platform now of some nature. All vary to different degrees, and hold a different level of importance for each series.

Late to the game and trying to catch up on the digital front, Formula 1’s over-the-top platform went live in May 2018 with F1 TV. However, the platform struggled on the technical front, with a variety of teething problems, leading to suggestions that the platform launched too early.

Speaking in front of industry experts at the Black Book Motorsport Forum, their Director of Marketing and Communications Ellie Norman was unashamed to admit that it has not been the smoothest of starts for F1 in the OTT world.

“It’s been a bumpy ride, I would suggest that we definitely launched F1 TV too soon,” Norman says.

Norman points to a ‘growth hacker’ mentality that F1 now has, the organisation unafraid to try things out to see what works, and what does not, even if it backfires.

“Working within digital is a really different space to working in broadcast, and often you are always in beta mode. But one thing I think we’ve done is, we’ve listened to the fans, and responded quickly by refunding them,” Norman told the audience.

“Twelve months on, the product is more stable, and I think it’s in a much better place now with the fan input, seeing how users engage with it, use it, and what they want for it. And that has been invaluable.”

The battle between pay-TV and OTT
But F1’s roadblocks on the over-the-top front expand far beyond the first twelve months.

Whilst most of the world can access F1 TV’s basic offering, many countries, including the UK, cannot access F1 TV’s premium tier. The only way UK fans can access the live race action is via Sky Sports, thanks to an agreement signed between Sky and ex-F1 supremo Bernie Ecclestone back in 2016.

For many, this is a source of frustration, with some fans feeling locked out of live F1 for the foreseeable. For F1, and sport in general, the balance is ‘delicate’ between over-the-top and pay television.

Over-the-top pricing
A snapshot for UK fans

MotoGP (live) – £177.26
WRC (live) – £79.76
WEC (live) – £38.99
Supercars (live) – £32.98
F1 TV (archive and non-live) – £19.99

Pricing per year.
WEC covers 2019/20 season.
WEC excludes Le Mans.

Do motor sport brands throw live content onto their over-the-top platform, allowing them to target a different audience directly, but potentially miss a key revenue stream?

Or, do the brands air their content live on pay television, helping the bank balance, but not their reach?

Gernot Bauer, Eurosport’s incoming Head of Motorsport, puts it bluntly. “As a broadcaster, I won’t pay a lot of money if every federation has a competing product because it puts so much challenge on us as a broadcaster.”

For broadcasters such as Eurosport and Sky, the emergence of a new over-the-top platform could cause their audience figures, and therefore revenue streams, to fall.

Having invested £1 billion over six years, unlocking F1 TV in the UK would cause consternation between F1 and Sky.

“Our investment is significant as one of the one of the investments that underpins F1, as all our rights do in every sport,” explained Scott Young, Sky’s Head of F1.

“I think that’s one of the differences between an OTT platform right now and major sporting broadcasters, like Sky and Eurosport, that actually invest a large amount of money that goes into those sports of which they need to help fund the teams to compete.”

Young denied suggestions that Sky’s relationship with F1 had become ‘strained’ because of F1 TV, but warned of the consequences if the balance between pay and over-the-top changed too quickly.

“There’s an ecosystem in there that is quite delicate, and if you unravel it too quickly it can have some lasting effects,” he said.

The NASCAR approach
The World Endurance Championship and World Rally Championship are examples of series that are nicely suited to the modern OTT way.

Both are long in duration, meaning that they can play out live in their entirety on OTT, without interruption from other sports on linear television.

Not every championship uses their over-the-top offering for live action though (for contractual or strategic reasons), which leads to the question of just how valuable OTT is without much live content to bring the viewer in.

“As each racing series creates their own OTT product it forces us, and them, to rethink that philosophy,” Bauer says.

“What is OTT, are you an alternative broadcaster for life? Are you a video on demand for archive material, or are you an app where you combine everything from Instagram to Twitter and so on? There is not one answer.”

For NASCAR, the situation is tricky, as all their premium-tier live content is exclusive to Fox and NBC in the US through until 2024, meaning that the series has no choice but to get creative with their domestic OTT offering.

NASCAR owns the Fans Choice platform and the RaceView service, but neither offer fans domestically live coverage of NASCAR races (overseas fans have access to Trackpass which offers live coverage).

“If we’re doing OTT, then it’s got to be driver lifestyle content, or it’s got to be some of our other series that we broadcast internationally,” explains Jill Gregory, NASCAR’s Executive Vice President and Chief Marketing Officer.

“I think as we look to the new media landscape, as everybody is today, we’re trying to decide what is the right mix.”

“We need to think about what goes on to traditional broadcasting, and what do you keep out for either your own OTT product, or even partnerships with social media platforms, the Amazon’s, and the Hulu’s.”

“For us, it’s about knowing where the fans want their NASCAR content and maximizing our exposure,” Gregory concluded.

2019 WEC - 6 Hours of Silverstone - OB Truck.jpg
Inside the World Endurance Championship OB truck at the 6 Hours of Silverstone, WEC one of the many tackling the OTT hurdle head on.

Second screen “has become first screen”
Of course, the likes of Sky, Fox and NBC have their own over-the-top platforms.

In the case of Sky, Now TV is becoming a more prominent player for cord-cutters due to its lower entry price. As Young alluded to however, Sky “need to do a better job” of promoting their other services to audiences.

That job is becoming increasingly important because, as Motorsport Broadcasting pointed out last month, research from UK’s communications body Ofcom shows that traditional viewing is falling quicker than ever before, with around half of UK homes now subscribing to at least one streaming service.

“You don’t need to be at home in front of your TV anymore [to consume sport]. Many people still think that way but they are not acting this way,” Bauer told the audience.

“I am constantly on my phone, watching on my phone on my iPad, on my laptop. I consume not the whole race anymore but certain bits of highlights, and that is interesting to me as it helps smaller federations to get a direct engagement with the fans.”

Young added that Sky’s current F1 audience is viewing other streams alongside the main F1 channel. In his opinion, the second screen “has become first screen.”

“We’re seeing a lot of data now on people actually not only watching data channels but watching other streams, watching our highlights, watching social feeds come through whilst they’re actually watching the live race.”

“And that to me is an amazing opportunity that we’re focused on tapping into.”

For broadcasters and championships alike, it is a constant battle to try to not only retain existing audiences, but to bring in a new, younger audience. That battle will only intensify over the forthcoming years.

Is over-the-top going to become the long-term destination for F1 and motor sport, replacing pay television for the next generation, or can the two entities coexist side-by-side? Could free-to-air television even make a resurgence?

Only time will tell.

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9 thoughts on “The over-the-top challenge facing motor sport

  1. Gernot Bauer’s comment is a classic case of the biggest mistake in marketing. If you look at the use of social media and digital platforms in the average population and then compare that to marketing and media folk, it’s light years apart. Media people consistently make the mistake of believing that the public do what they do. Just because he is “constantly on my phone, watching on my phone on my iPad, on my laptop” doesn’t mean his viewers are.

    And that is borne out in the data. Yes, 50% of UK households now subscribe to a streaming service. But how much do they watch? If you look deep into that Ofcom report and find the actual data, you might be surprised. Tucked away at the end is the key metric of average minutes per day. The average person watches 192 minutes of “traditional” TV per day, 26 minutes of streaming, and 34 minutes on YouTube. If you prefer percentages, that means that the average person spends 10% of their total viewing time on a streaming platform. And to add a second data point to this, BARB research shows that the average hours of TV watched per day in 2017 was 3hrs 23mins. Spin back to 2000, almost 2 decades ago, and it was 3hrs 40mins. That’s probably why we’ve had online streaming of sports events (eg: NFL on Twitter) for some time now. But it’s probably also why, to put it mildly, traditional TV has obliterated digital in the performance stakes.

    So what we see here is a mixed picture. Live viewing *is* declining. But it’s only losing out by about 5 minutes per year. And it’s true that streaming is increasingly being adopted. But a viewer can “stream” live TV broadcasts now anyway, eg: F1 on SkyGo, re-starting any BBC show on iPlayer, Champions League Final on Youtube. So there’s actually a good argument that streaming *is* TV, rather than a separate thing. Which in the end makes this a somewhat pointless argument. The truth is that OTT is like any other digital technology. It will be a short-term competitive advantage. But when every channel and every sport has unbundled from Sky into a £12.99 a month subscription, the only loser in that scenario will be the consumer.

    And that’s the crux of the issue here. Sky have already found that few people want to spend £600 a year to follow F1 alone. So it’s quite possible that the £12-14 sweet spot that F1 have found would work quite nicely. But the absolute key point is where people watch. The media moguls would have you believe that people are glued to their smartphones 24/7. But they are living in a parallel universe. After a long week at work, the majority of people still embed themselves in the sofa with snack and drinks and turn on the big 50″ sqaure in the corner of the room in the hope of being entertained. That (apart from being there of course) is still the best place to watch a live sporting event, not hunched over a 5″ screen trying to stream a 5 minute clip on jittery broadband in a service station on the M4.

  2. I think that this is a perfect opportunity for free to air to make a resurgence. You can get basic coverage, just the race or race and qualifying live for free, or the die hard fans can pay a little more and access top tier coverage direct from F1

  3. I tried the WEC website for streaming the Silverstone race and it was actually brilliant. I’d also say for WEC alone it was better value than motorsport tv’s prices (if you buy on a race by race basis)

    I’d also say it ran smoother on my Xbox than motorsport tv.. I’d still rather they used YouTube but they have to make money somehow I guess

  4. There’s a key element to OTT viewing: the availability of replays of sports events. For motorsports events that have a world wide following, this is a very important and very desirable feature for obvious reasons. Many of the motorsports events take place well outside of normal waking hours of the fans in many countries around the world. With the advent of on demand streaming of replays, viewers can watch the full race replays on their own schedule. I live on the West Coast of the U.S. and I no longer have to get up at 5 am to watch most of the F1 races live. The F1 TV replays are available immediately after the race and I can take my time and watch it on my own schedule. That is a significant benefit. F1 TV has had maddening technical problems but it has improved this season. I think this “time shifting” for global motorsport series has is a game changer.

  5. I dislike paying to be a guinea pig. I’ve been caught out before with the Eurosport player. I failed constantly and users never received information on the problems or a penny compensation for the hours of lost viewing. Eurosport are now putting many more live events exclusively on their player, There has to come a point when the cost of these over the top channels becomes far to expensive. I attempted to make a list of pay sites, there are many more than I thought, with more on the way. In comparison the TV licence is a great bargain at under 5 pence a day.

    1. Yes, for those that are dedicated fans for several sports, monthly/yearly subscriptions can quickly start mount up. OTOH F1 TV Pro is $10 /month. You can cancel it when the season ends and renew it when it begins. That includes all practices, qualifying and the races. Live and Replay. Plus an increasing number of full seasons from the recent seasons and selected races from the past. It’s a very reasonable deal, IMO.

      The technical problems from the first year were pathetic. I personally spent hours communicating with the support staff documenting problems, many of which they were even aware of. This season has been much better. If you can’t catch the races live, there’s no other alternative except searching for torrents, which sometimes can be unreliable and often take many hours or days to become available. with F1 TV Pro, the races are available immediately after they conclude.

      I realize that F! TV Pro isn’t available ion the U.K and several other markets. The Sky stranglehold on the U.K. market is a tough situation for the U.K. fans.

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