The current financial crisis that is engulfing Formula 1 has been debated to and fro over the past few months, with the collapse of Caterham and the uncertain future faced by Marussia giving many cause for concern about the future of the sport.
As things stand, we are set for a nine-team, 18-car field racing in F1 in 2015 – a quarter less than we saw just three years ago.
Will a lighter grid make much difference to the spectacle though? After all, the backmarkers rarely enjoyed a great deal of TV time, so perhaps having four less cars will mean very little in terms of the casual fans viewership from his or her armchair at home.
Even with 22 cars, F1 TV viewing figures have been falling for some time, losing a grand total of 175m in the past six years. 2015 saw 425m viewers tune in across the world, with a number of broadcasters seeing a fall in their numbers.
This has been the big dilemma for F1 over the past few years. TV figures have plummeted, so a remedy needs to be found. This was used as a factor when criticising the new cars introduced in 2014, saying that their reduced sound and look would only prompt fans to turn off.
It was also the reason behind the ultimately futile double points rule for 2014, intended to make the championship race last longer and therefore keep viewers tuning in. It has thankfully been scrapped for 2015, having firstly had no impact on the championship race whatsoever, and secondly not prevented a further fall of 25m in global viewership from 2013 to 2014.
So are people simply going off Formula 1, or is there a bigger reason behind the fall?
The quality of the racing is important, yet it is not the problem here. 2008 was the ‘peak’ in terms of viewership, booming at 600m. However, this was a year dominated by McLaren and Ferrari, and arguably less exciting than the recent clashes between Sebastian Vettel, Fernando Alonso, Lewis Hamilton and Nico Rosberg. There is little reason for less fans to be watching because they simply don’t like what they see.
Accessibility is better than it ever has been, also. The majority of broadcasters offer some kind of online streaming service, meaning that fans can watch F1 wherever they may be on their phone or tablet. However, the flip side of the internet revolution is that many may choose to opt for illegal streams instead of paying for a TV contract.
And here lies the crux of the ‘problem’: money. The only correlating variable in the fall in TV viewership is the rise of pay-per-view contracts for the sport. In a bid to increase the sports revenues – which is, of course, good business sense – the F1 Group has been chasing more and more pay TV contracts. Broadcasters who get their viewers to pay for services have more money to offer for the broadcasting rights, thus increasing the sport’s revenues. The F1 pie grows bigger.
It is simply a case of looking at the facts. In 2013, there was a fall of 50m that prompted many a well-documented concern in the F1 community. However, less well-documented was the fact that 46m of this fall was in just two markets where the sport had switched to pay TV. The move away from free-to-air (FTA) cost the sport 30m viewers in China and 16m in France – so a relative fall of 4m is far less concerning.
The same is true of the falling British F1 audience in recent years. For 2012, the BBC gave up its exclusive rights to show F1, with all of the races moving onto pay-TV Sky Sports. The BBC shows half of the races each year live, with highlights for the remainder. Unsurprisingly, there was a decline in the audience in one of the sport’s most important markets, but it was self-induced.
Interestingly though, the United States has been bucking the trend in this area. According to a recent report by the Wall Street Journal, the F1 audience in the U.S. grew for the second year in a row, increasing by 10.1% to 12.6m. Clearly, the market that the sport has tried to crack for so long is coming around.
A constant global decline is not something that the sport can simply accept, though. Instead, efforts must be made to combat the fall whilst also aiding revenues. FOM has recently begun a crack-down on those sharing illegal streaming links on Twitter, and it is likely that more and more of these websites will be targeted to get more tuning in on TV.
There could yet be another fall in 2015 though, with rights in Australia now being shared in a similar deal to that of the UK. Fox Sports will show all of the races live, with half of them also live on FTA Channel 10. With Daniel Ricciardo leading the sport’s charge Down Under, many may lament the fact that they cannot watch every race live and free.
So what does the man at the top of the F1 pile think of the situation?
“[It] is working alright,” Bernie Ecclestone told the WSJ. “We are still getting very good TV coverage. It just means that we are getting more coverage from the pay people now.”
The decline may have been sizeable in recent years, but it is not without reason. If the F1 pie is continue to grow, steps such as these must be taken.
However, if the sport can continue its recent drive to harness new technology streams via the F1 App and greater Twitter interaction, the decline may be limited and perhaps even reversed. It is not a trend that can persist, but the reasons behind it are clear.
