The road to our future digital utopia is strewn with many boulders, it would seem. Here's some news of what's been happening in F1, which is driving forward into the digisphere:
* first up, there's the somewhat embarassing
glitch-blighted launch of the F1 digital service, which required that refunds had to be paid.
* in the US, team sponsors have
lost the opportunity to advertise their products during the TV broadcast, a typical part of the activation spend for a lot of sports sponsorship deals. And NBC is no longer advertising F1 during all its other coverage of major sporting events throughout the rest of the year.
* the
problem in the US stems from the split between NBC and F1. NBC offered to pay $40m for seven years of US TV broadcast rights but walked away when F1 said it wanted to compete with NBC and livestream in the US itself to its own users. ESPN replaced NBC but
didn't have to pony up any dough for the privilege. F1's own users in the US are thought to number 10,000 (that's ten thousand, not 100,000, a tenth of what some experts herabouts claim cycling can easily get), paying $89.99 a head for a year's subscription (that's less than the $100 a head experts herabouts claim cycling can get). That's nearly a million dollars a year new revenue for F1. At the cost of nearly $5.75m old revenue a year. Or, in accountancy circles, what's called a loss of more than $4.75m a year. (And this is on top of the cost of F1 actually going digital, which can't be done on the cheap by just getting an iPhone and Periscope, it needs money spent on it, as the glitch-blighted launch demonstrated.)
* that 10,000 online US users figure, that's just an estimate, by Morgan Stanley. What's the reality of online usage where the product is also available on TV? Some
recent numbers from BARB in the UK may help. C4 reported 2,412,200 F1 viewers on TV, 29,633 on PC/laptop and 14,033 on a tablet. That's less than 2% of the F1 TV audience going digital. Sky reported 819,000 F1 viewers on TV, 11,991 on tablets and 9,806 on smartphones. That's approaching 3% of the F1 TV audience going digital. It should be noted that in both C4 and Sky's cases, the digital option comes at no extra charge to the user. In general, the conversion rates from free use to subscription service, they're not very pretty.
All of this can be dismissed as teething troubles. Launching the service before the glitches were ironed out, that happens, Yes, it happens with the cost of first impressions and second chances, but it still happens, often, which is probably why a lot of people are reluctant to sign up for such digital services in the first places and will wait for them to prove themselves. The advertising problem, both for the sponsors and the sport, given time that can be fixed with new digital advertising opportunities. And the US problem, that'll sort itself out, a TV company will be found who'll pay something and the online user base will grow, so bit by bit the annual loss will be reduced and will in time turn into a profit. And the low numbers making the switch to digital in the UK, that's just a question of time too.
And that's really true: it's all just a question of time. We all know that digital is the future. But, given people are offering up quick fixes to ill-perceived problems, we have to ask: how much time? Well, look at the F1 audience, which is quite like the cycling audience: its old (50-something is the average age) and
declining. It's not a tech savvy audience, despite the gadget-loving image we have of petrolheads. So all we've got to do is wait for the tech savvy kids of today to reach their 50s and become the F1 audience of tomorrow and F1's digital future will be secured. All our digital futures will the theirs. At which point the digital utopians can stand up - if their knees will hold out at that stage - and claim to have told us so.