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) – £19.99Pricing 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.
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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