Formula One Management (FOM) are considering removing the online element from every Formula One broadcasting contract and setting up their own hub over on Formula1.com, reports say this morning. The news is from Christian Sylt and Autoweek.com.
The important and vital part of the article is a quote from page 144 of 498 of Formula One’s planned flotation on the Singapore Stock Exchange:
We are in the initial stages of developing our digital media assets. The right to stream races online is typically licensed out to our broadcast partners around the world but we may consider changing our model and exploiting them independently in the future. As the exclusive rights holder to the World Championship, we have the benefit of controlling both our online platform and content which gives us a wide range of opportunities to monetise our rights, including through internal and third party solutions. We will continue to enhance the digital experience over time for our fans by exploring new opportunities including allowing access to premium digital content as well as adding additional language options to our website.
Considering how sluggish Formula One Management has been regarding anything concerning digital, I’m not sure how likely this is, when you consider how long it took the sport switch to widescreen (2007) and then the switch to high definition (2011). It is also light years behind where social media is concerned, as I have outlined before.
Past history would suggest that FOM would not push for any changes in the broadcasting landscape, but strange things have happened. If the above did happen though, they would have to face up to the fact that the rights that broadcasters pay as a result would be reduced. Take BBC at the moment. I can (for their live races) watch online live with BBC iPlayer and have the ability to rewind, pause and fast forward if watching on a delay. I can also watch races via BBC iPlayer on a 7 day delay. iPlayer is a fairly significant part of their structure, and I am not sure they would be too pleased if you removed that, and nor would viewers. BBC currently pay in the region of £15 million to £20 million. Would they want to pay that if what they could offer was reduced? From a fan perspective, I wouldn’t want to pay for something that I previously had the opportunity to watch free. If I am unable to watch via the TV, I would not want to pay an extra X pound to watch online, where is the incentive to do that?
I think FOM should definitely consider this though, but it needs to be exploited only for countries where Formula One is starting out and is on the rise. Formula One is not on the rise in the UK. Yes, it is stable but there is no real movement (if anything, it is going slightly down). If this comes into force, FOM should target those countries where Formula One is on the rise, and without online rights as they can they entice viewers to begin watching the sport and to watch online.
As always though, the price has to be right. For example, charging someone £9.99 would be too expensive any day of the week, but streaming a race for £1.99 may be a popular option. Of course, there is also the potential for archive rights to play a part here if FOM really wanted to head down that route.
Will it happen though? We shall see.