After weeks of rumour that the BBC would be dropping its coverage of F1 in a bid to save costs, a seven-year deal was announced this morning which will see both the BBC and Sky share coverage across their broadcast and digital properties.

“With this new deal not only have we delivered significant savings but we have also ensured that through our live and extended highlights coverage all the action continues to be available to licence-fee payers,” said the BBC’s Head of Sport, Barbara Slater.

The new deal will save the BBC £16.5 million per year, which is not an insignificant sum.

The deal means that the BBC will broadcast half the races and qualifying sessions, along with other key races such as the British Grand Prix, Monaco Grand Prix and the final race of the season, while Sky Sports will broadcast all the races, qualifying and practice sessions on their Sky Go service.

The new Sky Go service from BSkyB

BSkyB recently launched Sky Go combining their web and mobile TV services and this will the be its first major sports rights deal, although not Sky’s first foray into F1. Back in 2002 Sky and Bernie Ecclestone’s FOM organisation launched F1 Digital, commentated on by Ben Edwards and John Watson with studio guests Damon Hill and Perry McCarthy – pit lane reports were provided by Peter Windsor. The service was ahead of its time, offering a multi-camera real-time broadcast for £12 a race, but less than 10,000 viewers subscribed to it, compared with the 6-7 million viewers who now watch F1 on the BBC.

2002 was a challenging time for F1, with Ecclestone floating his holding company SLEC and investor, Kirch Group, over-stretching themselves in their appetite to gain control of motorsport’s crown jewel. With the banks (Bayerische Landesbank, JPMorgan Chase and Lehman Brothers) taking over the 75% stake in SLEC during 2002/2003 it’s of little surprise that the expensive F1 Digital service was closed down, ending Sky’s association with F1 until now.

During the last few years I’ve been fortunate enough to work with the man behind F1 Digital and subsequently spoken with a number of teams about F1’s grasp of social media and the internet. Teams and their sponsors are frustrated by their ability to reach F1’s 500+ million audience and deliver better value to their shareholders. Bernie on the other hand distrusts the internet, seeing it as the home of pirated content and is happier charging for a handful of rights agreements which earn him money up front.

But the potential audience for F1’s sponsors are far greater online than on television, with the added opportunity of engaging directly. Television suits the rights holder and broadcasters, due to the control they can maintain over content and the revenues earned from broadcasting, but the brands who invest in F1 get an increasingly poorer deal. The tension has been building for some time with Renault, Williams F1 and McLaren being the most outspoken, so with today’s BBC/Sky announcement, expect to see more fireworks over the forthcoming months.

So this is bad news, right?

Yes and No. Reaction by the fans and pundits to this morning’s news has been predictably negative and teams are seeking clarification this morning on the implications for their sponsors and the business of F1. FOTA’s chairman Martin Whitmarsh has already been quoted as saying “ may breach the Concorde Agreement”, but the implications are much broader than that. Martin Brundle, lead presenter of the BBC’s F1 coverage had this to say on Twitter..

BBC Commentator Martin Brundle's tweet from this morning

I’ve worked within digital media since the mid-90s and since as long as I can remember we’ve talked about the convergence of web and TV, which initially assumed would see us watching TV programmes through our computers, then more recently that TV’s would become smart devices able to browse the web simultaneously as broadcasts are received. But the pace of technology moves faster than products can innovate, so the industry has already moved on from such a premise.

The Entertainment Industry comes of age

You may already have heard about Augmented Reality, assuming it was some form of web-geekery with little use to those without the nerd gene, but it actually represents the future path of broadcasting – both for live and on-demand transmissions.

Digital broadcasting, just as with digital publishing involves much more than merely producing content on a different platform. It opens up the possibility of combining different types of content and personalising the way a viewer engages with that content.

Augmented reality print advert from Audi

Augmented Reality is one of the ways this is being achieved and is best described as the process of adding layers of digital information or content to a users viewport, thereby enhancing their experience. You’ve already seen it working in the Head-up displays of BMW’s premium models, or in the display of lap countdowns, KERS displays and rev-counters in today’s F1 broadcasts. Information is added from separate sources benefitting the primary viewing purpose.

Whilst the approach has thus far been controlled by whoever initiates the broadcast, that’s not likely to remain so. In fact we’ve been working on a piece of technology that transfers the control of which content gets augmented to the user, thereby enabling an F1 viewer for example to watch the broadcast on Sky, take the audio feed from BBC 5Live and the telemetry/race-data from McLaren. Over time we will see many more of these layered feeds available in an AppStore environment enabling the viewer to customise their experience to suit their preferences.

So what happen’s next?

There will of course be plenty of argument (and discussion) about who should really own the commercial rights to F1 – especially since the boundary to these rights is becoming blurred by the internet. The Concorde Agreement is due for renewal (i.e. renegotiation) in the next few years, so this will become an even more critical focus.

An Augmented reality headset from ABB
An augmented reality headset from ABB, but we’re more likely to see tablet apps leading the way for sports and entertainment such as F1

But with the uptake of Twitter, you can already follow the teams and their drivers in real-time, keep track of each practice session and even catch updates on team strategy before they are broadcast on TV. Nearly every team produces their own pre and post video content and will increasingly invest in this off-broadcast form of media. Perhaps we’ll see the teams eventually licensing their own content to broadcasters as an augmented layer over the main F1 transmission.

As with any sport it’s ultimately the sponsors and advertisers who will win out, so rather than see today’s news as a nail in the coffin of F1’s television experience, consider it as a catalyst that may finally see F1 embrace digital media in today’s social age.

Written By

Steve Davies

Steve is an investor, private equity advisor and former Partner at KPMG, PwC and Bain.   Most importantly he's a life-long car enthusiast, mountain biker and active sports enthusiast. He designs and builds technology platforms and is the architect behind Transmission.

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