Op Ed: Why isn’t F1 in HD yet? The real reason 2012 is targeted

Many of you may not know that my “other” life is as an Owner/GM of a commercial audiovisual integration company. We specialize in high definition (HD) displays, videoconferencing, control systems and IT integration for fortune 500 companies world-wide.

Why do I mention this? Well, while you may feel I am off the mark on my F1 opinion; I am a bit of a subject matter expert in this AV world. It is for this reason that I find AUTOSPORTS article about F1 and HD interesting. I’ll attempt to break some of it down for you and we can discuss below.

Today F1 boss Bernie Ecclestone announced that 2012 was the first real time-frame he could put on F1 being broadcast in HD. That seems a long way away for many of us enjoying HD broadcasts right now via Cable, Satellite or phone company TV delivery systems. Here in the USA, we were mandated to move to HD terrestrial broadcast in June of last year.

So why, if we get NASCAR and almost all other sport in HD, would it take so long for F1 to make the switch? In short…money. You may recall that Ecclestone attempted a premium service a few years ago and spent millions on the infrastructure. That system failed to garner enough consumers and was halted. Now we have a call for F1 in HD, as evidenced by a fan survey, and Ecclestone is reticent in delivering.

On the surface, his comments seem out of touch with the reality of the technology currently deployed to deliver HD to millions around the globe. He seems to insinuate that the viewership is not large for HD and that there is no reason in providing a product not everyone can enjoy.

Fair enough…if that were really the case. What is really at stake is revenue. Ecclestone, unlike other networks in the US, is not about to offer an HD signal for free. While Fox, CBS, ABC, NBC and others in the US feel that HD is a value their consumers appreciate; the real issue is that the technology has moved to digital and those left behind will suffer. Their customers demand HD as the infrastructure is already in place and the medium is capable of delivering.

The biggest viewership is still terrestrial broadcast but even that has gone digital in the US. It requires an ATSC tuner, instead of the older NTSC analog tuner, to view even over-the-air broadcasts. A special set-top box is needed or a TV with a built-in ATSC tuner is required. As FCC law forced all terrestrial broadcasters to “go digital” in June of last year, if forced millions to make the necessary changes to their equipment.

You can imagine the difficulties faced by the elderly as they had to figure out a way to get the new digital signal on an old analog TV. But this was done anyway and most of America is moving to digital HD TV’s, set-top boxes or satellite/cable boxes. Most sporting events are offered in HD in the States now and all new TV’s are ATSC equipped to view the digital broadcast but most use an external digital set-top box for their tuning in of HD sources.

Ecclestone suggests that the infrastructure as well as the demand is not there. Let’s break this down. The main revenue source for F1 is TV revenue and Ecclestone has become a billionaire by selling TV rights to local broadcasters. We can argue all day on whether F1 is internet savvy and how they are missing the boat but there is no way Ecclestone will cock up the TV rights side of his business. He saw color TV come into being and will navigate HD TV in a similar fashion.

What he means by infrastructure is the hardware required by Formula One Management to actually record the event in HD. This requires sophisticated camera’s that are very expensive. The quotes from LG’s Vice President, Andrew Barrat, is a bit of a misnomer in my opinion. When he speaks of the challenges of shooting F1 in the Monaco tunnel may have presented a difficult situation for LG but there are manufacturer’s out there who have to gear fully capable of handling the sports most difficult moments. LG may not have developed a good broadcast-quality HD camera but other companies have.

Ecclestone is married to LG for their sponsorship of the series so he is looking for LG components to be used in the shooting, processing and display of the action. The politics of sponsorship. Panasonic, Sony or JVC could shoot F1 tomorrow in HD. So the infrastructure is on FOM’s side of the production line.

As for Ecclestone’s suggestion that 20% of the UK are HD capable consumers, well that may be true. I have not read HD adoption cycles for the UK but the US is most likely in a similar position (could be less percentage actually…keeping in mind population). While I would not consider the US at the “visionaries” status, they are starting to appear as the “early majority” or “tornado” stage and I would assume that the UK is no different. If the US has content delivery being fed to over 60 millions sets, that’s a large number but how many of those are avid F1 fans? That would be worth a survey to find out.

Ecclestone deals in numbers. If there are 300 million people in the US and only 60 million have HD then only a small percentage of the 60 million are F1 fans. IS that worth the investment? If the UK boasts 63 million people and 20% have HD TV’s, is that worth the investment? The percentage of F1 fans in that 12 million would be higher than in the US but is it still worth the investment?

Make no mistake; Ecclestone doesn’t want to miss a revenue opportunity when it comes to TV rights. He will offer HD but not for free. It will be a premium service that F1 fans will pay for. He will not offer HD for free like NASCAR, NFL, MLB, NHL and NBA do. It is the new frontier for F1 in TV rights revenue and Ecclestone knows it. Tragically he missed the fact that the “Second” screen, while experiencing a possible revolution in HD, is already being eclipsed by the 3rd, 4th and 5th screens (communication screens). That doesn’t mean he should ignore the 2nd screen, quite the contrary, but a combination of products and packages from first through fifth would make the most sense for the biggest revenue generator. I have many ideas but will not offer them for free here.

So why doesn’t F1 broadcast in HD? Money. Period. Like all other things in F1, it is moved, pushed, motivated, excoriated and most commonly shoved in directions based upon money, profit and recurring revenue models. Anyone, including AUTOSPORT, that tells you otherwise is selling you something. Publications, news papaers, TV and even some blogs (not F1B) rely on these same models for survival. Is that wrong? Hell no!

The defacto standard is/should be 1080p and the broadcast should be offered as a free service by the network who carries the HD signal to its consumers. But FOM will charge a premium to Speed TV/Fox Sports to offer this value to their viewer which in turn is usually passed through to their consumers as a higher subscription rate.

Problem is, free terrestrial broadcasts aren’t pay-for services and if Ecclestone wants the biggest audience he can get, he needs terrestrial broadcasters to foot the bill while knowing the only return revenue they will receive is from advertising. How many are longing for that gamble? Not many. It is a numbers game and while Ecclestone wants terrestrial broadcast in HD, he wants every single person to pay a premium for it or the networks to pay for it on behalf of their viewers while giving the viewer a value-added experience that keeps them coming back and advertisers spending money.

The real reason 2012 is targeted? The year 2012 will make some advances in technology, legal positioning for all involved and the teams will have a new Concorde agreement in the works. Most likely the revenue stream will be at play and there is everything to lose for all parties. It will an interesting time to be in F1 to be sure and as always, you and and I will be asked to pay for it all. The infrastructure will be in place and perhaps LG”s rumored 5-year sponsor deal will be coming to a close and wouldn’t an HD contract be a nice carrot to dangle in front of a sponsor?

And yes, I like Display Port much better than HDMI as well as H.264, H.232 for control, separate VLANS for video, audio and control traffic, HTML 5, Return on Message, and HD. Yes, I run all audio, video and control code over simple UTP cable…how’s that for cool?

That 3D TV? Yeah, that has a way to go. I just spent an entire week in Vegas at Infocomm (the trade show for all things audiovisual in the world) and LG, Samsung and others were there with 3d. It gave me a headache. The systems are proprietary and Samsungs glasses won’t work on other manufacturers while the other non-eyewear-needing systems are atrocious when off-axis viewing. Save your money…you’re going to need it for F1 in HD…trust me on this one.

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