Tata Communications is the connectivity, content delivery, hosting and service provider for Formula 1. Being a technology supplier for F1 is no easy task—especially when you are the backbone of the world feed provided to broadcasters all over the globe.
Tata released a video this week that explains the technology they are using and supplying to F1. What I find most interesting is the depth of service, features, categorization, hosting an streaming services available to broadcasters. It’s not unusual at all, don’t get me wrong, but what I found intriguing is that fans have felt for some time that F1 has a Neolithic view to current technologies and methods of content delivery.
As it turns out, they don’t have a Neolithic process at all. It is just a process that feeds the system they have in place—namely TV broadcasting rights that are sold around the world.
If F1 can package content, stream it, categorize it and provide viewing features such as multi-cam, telemetry and on-demand, as shown in this video, then they can easily provide that for their fans via a online package that could be bought and viewed on any device.
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That’s the good news. The bad news is that they may not be ready to do that yet. If viewer numbers start to wane, they may take a hard look at it but for now, they are providing these services to broadcasters who are willing to pay for it—Sky Sports F1 jumps to mind but certainly not NBC Sports here in the US.
Why?
The simple question of “why not” comes to mind and here is a hunch:
TV viewers range around 500 to 550 million per year for F1. These viewers get race coverage via a cable package they pay for which includes a host of other channels bundled in with it. Some folks get the races on a free-to-air broadcast but that service is paid for by others and includes a host of channels bundled for their viewing.
You pay for packages because you want all those channels (including the channel that carries F1) and that brings F1 coverage into a lot of homes on the back of that packaged bundle. If you are F1, you want this type of delivery system. Bundled and paid for by the broadcast providers.
How many people have ditched Cable or Satellite for just Netflix? Some have, no doubt, but how many? Not enough to warrant a F1 package only. If F1 starts offering a content package for people to buy directly, it would be great for hardcore fans but what would broadcasters be willing to pay for the package now that their viewers can get it direct? How valuable is that package now?
If NBC Sports or Sky Sports F1 paid, and I am just throwing out numbers here, $1-2 million for the broadcast rights to F1, how much would they be willing to pay if a portion of their fans could buy it direct for $99/year? If you could buy the F1 package direct and watch it on your computer, iPad or phone on-demand, would you still buy the same channel package you currently get from your cable provider or satellite provider? There is a risk that you wouldn’t. I know I wouldn’t.
The old broadcast package model still works for F1 and until such time as it start to not work or fans start to find other things to entertain them, it will most likely continue. Now, I say that but it could change next year for all I know. I suspect that F1 is looking seriously at direct-to-user packaging and trying to ascertain the impact that would have on their model.
Let’s be honest, if you have the AT&T U-Verse package 300, like I do, to get F1, would you pay an additional $99-130 a year for just F1? If so, would you step down to the U-Verse 200 package?
You see, and don’t take this the wrong way, F1 fans like to say they’d support content they like but in the end, many don’t. Take this website and podcast or other sites, podcasts or videos. Relying on reader/listener support is not enough to keep the lights on. Many have been gracious with their donations—and we are fiercely grateful to you—and every single dollar helps but the costs, as is often the case, outweigh the level of support you actually get. That’s why blogs, mainstream media sites and others use ads on their websites—to fill the gap.
Would the same be true of F1? What if F1’s desire to move to a digital content package direct-to-user was judged to have a significant impact on the asking price they now could ask from the broadcasters? Would enough F1 fans buy the package to fill the gap? It’s most likely a question F1 is asking itself of late.
That’s just one possible angle, what do you think is preventing F1 from taking what they already seem to have and packaging it for fans to buy?
