Insight: Sky takes Formula 1 TV behind exclusive paywall in UK
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Posted By: James Allen  |  24 Mar 2016   |  12:26 am GMT  |  410 comments

Sky has swooped to close a deal for exclusive live rights to F1 for six years from 2019 onwards, meaning British F1 fans will only be able to watch live Grands Prix behind a paywall from that point.

The move will align the UK with France and Spain, which has a similar situation at present. It is likely that other European countries will follow in due course, as F1 Management and CVC prioritise income from broadcasters over mass audience numbers.

The TV audience for F1 is still around 60% based in Europe, but few terrestrial broadcasters have the budget or appetite for an exclusive F1 deal. RTL in Germany is one of the few exceptions. It recently extended its deal for two more years, despite declining audience numbers in Germany.

The timing of the Sky UK deal is interesting on a number of levels; Channel 4 has just begun a three year contract to show half the races live on free to air TV. Their experience of the sport is set to be short lived.

Under its new deal, Sky is required to make the highlights and the live coverage of the British Grand Prix at Silverstone free to view. There is some debate about what Free to Air will mean by 2019, with various digital terrestrial platforms. It is launching a new Sports Mix channel, which is free to Sky subscribers and this content may feature on there.

But it may also sub-licence the highlights and Silverstone race to a terrestrial, like Channel 4 or ITV. That is the model in the UK for the Premier League, which has a weekly FTA highlights programme on BBC TV.

It would be valuable to the sport to continue to have a shop window on a mass market FTA platform, even from Sky’s point of view, to attract new viewers.

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The audience for F1 in the UK, once it moves exclusively behind a paywall, will be interesting to monitor. It should settle at somewhere around 1 to 1.5 million. Last year live coverage of the US Grand Prix championship decider, live on Sky Sports 1 and Sky Sports F1, attracted a combined average audience of 1 million, with a peak of 1.2m. As a reference, BBC 1’s live audience for the Hungarian GP was watched by an average 3.9m with a peak of 5m. When Lewis Hamilton won the 2008 world championship the title decider in Brazil on ITV was watched by 9m average and peaked at over 12m.

No details have been given on the online rights in the deal; during the lifetime of this new deal the TV landscape will change significantly and many consumers will be looking to stream the races on smart TVs or mobile devices. No doubt that is covered in the new deal and will present a new opportunity for growth for both the broadcaster and the sport.

One clue as to the possible future direction came last year, when FOM and Tata Communications, its connectivity partner, did a proof of concept with an OTT (over the top) service. An OTT video feed has the potential to open a new world
of immersive and engaging experience for the fans, where they have a greater control over their race experience by
being able to select what they want to watch.

When BBC TV pulled out of its contract (which was due to run to 2018) at the end of last season, theoretically Sky had first refusal on the rights. But Ecclestone struck a deal with Channel 4, keeping F1 on free to air TV for three more years. It is understood that the F1 teams lobbied for a continued terrestrial TV footprint at least until that point.

Sky has leveraged its position to secure F1 for six years from 2019. It is partially a defensive move, which keeps its main rival BT Sport out of F1 until 2024 at least. BT Sport has already taken the Champions League from Sky and drove up the price on the Premier League football rights up to £5bn at the last round of bidding.

Sky has scaled back on costs at Grands Prix, with a travelling crew less than half as numerous as when they came in back in 2012. They have pooled facilities with Sky Italia and Sky Germany, such as cameramen and edit resources as they look to save costs. Against that backdrop, the rights move is clearly a strategy to close out BT Sport.

The Sky deal comes in a week when the network has increased prices to consumers, meaning that for the first time a UK family household with two Sky+ HD boxes, Multiscreen and the Variety Sport package, which is necessary to watch the Sky F1 channel, will have to pay £83.80 a month, which crosses the key psychological price point of £1,000 a year. On Sky’s sales website, a search for the cheapest single box package to receive the F1 channel, come out at £47.50 a month, which is £570 a year or £27 per Grand Prix.

This new F1 deal also goes well beyond the end of the current bilateral agreements with F1 teams, which run to 2020.

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1

Its part of the sad picture of sports rights in the UK….Sky Sports greed and the greed of sports governing bodies whom prioritise money over the audiences and interest in their sports….Sky loved it when the BBC lost a lot of their sports budgets due to the cuts imposed on them by the Tory government….Murdoch and Sky weaseled in and grabbed as much as they can and its now at pure monopoly levels…am glad I am out of it now in the US where at least some sports consider their audiences over cash

2

A little birdy told me, RTL and Radio5 live if both obtained via satellite sync up perfectly…

Dast ist gud

3
Tony Broomfield

Looks like after 50+ years I wont be watching any more GP’s then. I will not be putting any money into Murdochs empire to watch a single moment

4

The move to C4 from BBC has already made F1 almost unwatchable on online TV because of the ad-to-programme ratio being approx 50% at the beginning (couldn’t face any more so switched off before the race). This and the move to the monopoly of pay TV seals the end of my watching a sport I loved.

5

I believe I’ve watched every F1 race since the 80’s and have also been a longterm fan of Moto GP (till last year) I don’t follow any other sport and dumped Sky TV years ago as it’s overpriced compared to Freeview and for not offering enough for me to even remotely consider it. We have to just get over F1 its not the racing it used to be, long term it won’t survive without the racing fans, I think what we NEED is for the BBC or ITV to realise is that they have the real fan base and the real power, for instance Moto GP got too big and went pay tv so they should have screened World Superbikes or British Superbikes instead and probably got paid for doing so. I believe they built F1 not Bernie or the FIA. So bring us another series to watch, fans can’t tell (or care) if the cars/bikes cost £100m or £100k we want to see racing and get to know the racers and teams. Its an opportunity for UK terrestrial TV as F1 leaves behind millions of racing fans looking for something else?

6

I am absolutely gutted to learn that F1 races will no longer feature on free-to-air terrestrial channels from 2019. I refuse to pay the exorbitant subscriptions charged by the monopoly that is Sky, particularly when there is nothing else that I would want to watch on their channels. F1 is a sport I love and the only sport that I follow closely. Sadly I, and no doubt thousands of others, will be deprived of that pleasure from 2019. It seems a very strange way for F1 to try and attract a larger audience!

7

It’s just a tv show. Certainly not something I would actually pay money to watch.

8

Sad. Sad. Sad. This year’s Silverstone will be my last. Taking grandson again. 6 year old future f1 fan. Wants to be a driver. Goes bambino karting at my great expense. All because of his watching f1. But I will not put money into both those poison dwarfs pockets. Murdoch and ecclestone. Sky took football away and created those overpaid prima Donna’s. At the expense of home grown talent. Same will happen with f1. All those engineers. Mechanics. Designers. Ect. Thousands of British jobs and talent. Will be lost to other countries. It’s more than just the spectacle at stake. It’s all those future engineers ect. How many in Motorsport started their interested by watching the coverage on tv? Money has always talked loudest. But this time it’s truly wrong. Unlike football. Motorsport is a minority sport in comparison. You don’t get thousands of kids jumping into racing cars at playtime. But kicking a football about. Truth be told f1 should pay the FTA channels to show it. Then the sponsor would flood in. So much wrong with Motorsport in general. Stupid rules that increase costs for everyone. From grass routes karting. To the pinnacle with the likes of f1. No level playing fields anymore. That applies to most things I know. What you do about it? Requires a bigger brain than mine. But this feeble mind knows that this paywall will kill f1 in this country. With the effects mentioned above. Final points To Cameron and his BBC hating gang. We know you want to destroy the BBC. To give your friends in the likes of sky. Free reign to control the airwaves. You do it at the expense of so many British jobs and future talent. To sky I say. This is not a deal to increase your revenue and income. But an attempt to control what we the public can watch. To thwart the likes of BT and the terrestrial channels. In fact you will lose money on f1 alone. That is why it’s not a standalone channel. Hope their is some kind of protest at Silverstone. We’re can I get the t shirt?

9

Bernie is getting old now, bumbling into bad decisions, damaging qualifying whilst attempting to fix the race, and now a pay to view wall.

He has raised the sport up but now seems to be dragging it back down.

Selfish and arrogant.

Time to go.

10

Well that will be the end of F1 for me.40 odd yrs I’ve been watching but I will not pay for it.
Shame greed rules

11

I have watched F1 the last 35 plus years.I have always been interested in not only the racing side of it but also the engineering side of it.I can watch it now on sky for £7 a month fee on top of a basic package.I also will watch it on channel 4 when its live.
I think F1 should be on the free to air channels as people who might only be interested a little in it will watch it,but if you have to pay only the people who are mad about will watch it and they are very few really.
I for one will not be paying anymore to watch it when sky get the exclusive deal up and running in 2019 so that will be the end of F1 not only for me but for all who live under my roof and my brothers in laws etc as they all agree it’s a rip off. I will also pull the plug on sky and just watch the free channels
Sad really but that’s greed for you

12

Well that will be the end for me. i won’t pay to watch F1 on TV and I certainly won’t give Murdoch another $.
watching ‘Live’ is not a deal breaker for me anymore. Since Sky came along I’ve got used to watching it recorded. In 2019 I’ll either stop watching or find a way around it. Anyway I seem to be just as excited by MotoGp these days so having to drop 1 of my 2 favourite sports is actually a time saver all in all.

13

Ecclestone – Pay TV would be suicide 2011
http://www.autosport.com/news/report.php/id/91249

14

2018 looks like being my last season then as I don’t want to pay for a full Sports package so I can just watch races live.

That’s if I make it to the end of this season though. AUS might have been a great race but if there’s a few boring ones I’ll struggle to keep on watching highlights.

15

I dont think people running F! understand how f1 viewership works.. F! happens on sundays… loads of people have other plans on sundays…. its not like a sport u come home on a sunday and at night watch it… the timings are way too different for a person to watch all the races.. so ur asking a person to pay shit loads for watching maybe a decent fan around 12-15 races… max i guess… that too half of these races might turn out to be boring…. F1 should be accesible to anyone who is home on a sunday…. someone flipping throutgh the channels basically.. evryone cant be a crazy fan. they may like the sport but need not follow it comletely…this viewership is significant.. i know loads of people who know about f1 , the drivers the teams etc but they have other stuff too and so cannot follow it like me.. in the late 90s and early 2k f1 was free to air and there were advertisement breaks now and then .. this sshould generate enought sponsorship to make it free to air.. but nO these media people want shitloads of money.. when will they understand that we dont all th pre show post show and all the crazy analysis.. we need the basics.. who won or how did my dirver do and what affected his perf.. simple .. this should be free to air. sad to see F1 go down this way… i dont think these media fellows know what cord cutting is

16

I’m 70 this year and female to boot. Don’t go out much, just live for F1 which I have been watching since my teens. I hope Mr Murdock can live with himself and his concience when he deprives 1000 of fans, who like myself could never afford to pay per view. At the moment I watch on BBC/ITV/C4 wherever it is FTA and stream free the sky coverage. Following on with the highlights as well. But guess he will stop. the free streaming too. It’s like a stab in the back to all F1 true fans who like me watch ALL practice sessions, quali and race regardless of time of day or night.

17

I feel for all of the UK fans who are going through exactly what we Aussies went through 12 months ago. It is frustrating and disappointing. Like a lot here, I’ve watched the sport for my entire teenage and adult life and I swore black and blue I wouldn’t give Bernie and his mates a red cent. He’s already made his wealth off the back of the power afforded to him by the eyes of his audience. Why then should the fans pay on top of that?

Guess what though? After 30 years of watching the sport and irrespective of the state of competition, I’m like Pavlov’s dog. I couldn’t be without the sport I love and so here I am a year and a bit down the track and I’ve coughed up after having talked tough at the start. Not just for Foxtel, but also for the live timing. I hate myself for doing it, but I can’t be without the sport.

Having said that, the question of whether it’s worth the money is constantly on my mind – I regularly think about cancelling my subscription. It’s not that I can’t afford it – it’s just that it sticks in my craw to have this situation forced down my throat.

The moment the area I live in has good enough internet connection speeds, I’ll kick Foxtel to the curb and watch F1 via streams. I’ve never pirated movies or games or such like, but I refuse to accept that the new model for watching F1 is ethical or fair to the fans and the catchcry of our time that “it’s a business and has to answer to the shareholders” holds no water with me. It’s used in this day and age to justify all manner of unethical and money grubbing behaviour by corporations. How much money is enough!?

Bernie is the Martin Shkreli of F1 and as well liked by the fans.

18

I have been a fan of F1 for more than 50 years but this deal is just too much to put up with. I have had the opportunity to watch sky F1 once while with a sky user, it was awful and definitely second rate. I will not be paying through the nose to watch F1 on pay per view TV. The vast majority of fans do not have the finance to travel to the races around the globe but they contribute far more between them than all sky’s millions, the potential customers being tempted by the sponsors are the key to the whole thing. Without huge viewing figures there will be fewer sponsorship deals without free to air broadcasts live there is no interest for me in F1 I may just become an off grid spoon whittler.

19
Edward Valentine

Formula 1 has become a race to the bottom. It is beginning to show all of the hallmarks of a bubble. I’m a sky sports subscriber and enjoy the coverage but F1 needs to be live on FTA. Fingers crossed that there will be a breakaway series for FTA that listens to fans with Ferrari, Williams and McLaren singing up. I really hope F1 goes bust if a breakaway dose not happen.

20

So, not only is the racing getting more poopy, not only are the cars more poopy, not only is it all contrived, not only is driven by children and girls in cars bought from Ferrari in kit form but, we are expected to pay for the privilege and take a load of sky codswallop as well. No thanks.

21

As a long time reader of JAonF1 this debacle has driven me to posting. With the loss of free to air live races, the qualifying shambles and the 2017 regs that will make close racing more difficult it seems that F1 is a sport that is incabable of listening to its fans (or doesn’t care) . As fans what we can do but voice our concerns and if that fails then vote with our feet and stop watching F1.

22

Hello I also have watched F1 all my Life & am not very happy at the prospect of Sky having it can anyone tell me Why no one ever investigates them , It cannot be right that they have a Monopoly on this & other Sports , Thankfully I gave up Sky a couple of years ago ,

23
Kris Grzegorczyk

I’m not pro-Sky by any means, but I think this article doesn’t present a particularly balanced view.

“The Sky deal comes in a week when the network has increased prices to consumers, meaning that for the first time a UK family household with two Sky+ HD boxes, Multiscreen and the Variety Sport package, which is necessary to watch the Sky F1 channel, will have to pay £83.80 a month, which crosses the key psychological price point of £1,000 a year. On Sky’s sales website, a search for the cheapest single box package to receive the F1 channel, come out at £47.50 a month, which is £570 a year or £27 per Grand Prix.”

That completely disregards the fact that you can now buy things like NOW TV passes for a day or weekend. A very quick search on the internet suggests you could get access to a grand prix (as part of a 24-pass) for 7 GBP or a weekend for 11 GBP, making the price for a season (based on a 21-race season) 147 GBP for just the races or 221 GBP for all race weekends. Is that really that bad? It’s not free, obviously, but neither is it the amateur coverage that the BBC and ITV have passed off for decades. Like it or not, it’s the way of the world. It’s the same for any sport. At least we have proper competition and the fact that Sky have come in has raised the bar in the quality of broadcasting and coverage – we’re not left to choose from two rather limited offerings (as it was with the BBC and ITV and their half hour pre-race and half-hour post-race offerings). You pay and you get everything a fan could crave in terms of access, analysis, etc. For some people, that’s too much and the idea of paying will always be alien. But I don’t believe that it’s necessarily bad value for money.

Like I said, I’m not pro-Sky but I dislike that this article doesn’t accurately portray what the cost of viewing actually is – it massively overplays it and disregards the fact that instant, short-term access (via services like Apple TV, etc.) is a disruptive, growing trend. Poor show of an article.

24
Thread the Needle

I believe it was Bernie’s goal all along with all these rule changes

Fake F1, I won’t be paying a subscription I know that

25

The thing that is interesting is that the British Grand Prix has protected free to air status in the UK as a Crown Jewels event… so what happens if no free-to-air broadcaster is prepared to broadcast what effectively would be a three hour advert for Sky?

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