Reactions to the recent news that Australian-based Formula 1 fans can now only see a full season of live races on pay television have been mixed. Those critical of that decision won’t be at all surprised to learn that global television audiences for F1 are in decline. However, what may surprise is that TV revenue is up.
In 2008 the global television audience was measured at 600 million, since then it has dropped to around 70% of that figure or down to 425 million viewers. The decline has been steady around the globe with the United States registering a minor 10% increase last year.
The sport’s administrators can point to the increased licensing fees pay TV networks are willing to pay; there was US$797.5 million in the F1 kitty last year, of which 63% is divided among the teams in prize money distrubution.
Formula 1 has been notoriously slow to embrace new technology and alternate media streams. Its apparent reliance on television rights as its main source of revenue supports that claim. At some stage, though, F1 will have to increase its viewing numbers; those pay TV networks will want a return on their investment. If that’s not forthcoming then the whole house of cards could come falling down.
You sense an increase in viewing numbers is unlikely to happen while Bernie is in charge, who syas things are still “working all right. We are still getting very good TV coverage. It just means that we are getting more coverage from the pay people now.”
Germany, Italy and Spain have also followed the British lead of split television deals. Which leaves Bernie to say everything is going well thanks to increased revenue, but for how much longer?
[Source: Wall Street Journal]