Features - Financial
MARCH 1, 1996
The future of Formula 1 television
BY JOE SAWARD
Television has been essential in the remarkable growth of F1 racing. It pays for the sport by attracting the big sponsors with vast viewing figures. Last year the FIA reckons 40 billion viewers watched something about F1 on TV int he course of the year. The population of the world is only five billion and while bushmen in the Kalahari Desert might not know about Michael Schumacher, the average European watches probably 50 programmes a year about F1.
Bernie's revolution was inter-active digital television and today his Formula One Communications (FOC) company has a huge mobile TV facility - a huge silver-grey structure known in the F1 paddock as "Bakersville", after former Brabham mechanic Eddie Baker, who runs the show. It is staffed by 200 technicians, breaks down into 200 tons of freight and takes two Jumbo Jets to transport around the world. It cost Bernie $40m to build and is off-limits unless you are involved. Bernie doesn't want the world to know what there is inside. In fact there are several editing suits, commentary boxes, studios and offices - and even a canteen to keep everyone well-fed.
"The whole thing is air-conditioned to keep all the machinery cool," says one of the commentators. "It's absolutely freezing inside."
But what does it do?
In Brazil FOC had its first race as the host broadcaster, producing the conventional race coverage. Some of the companies which own the "terrestrial" rights to broadcast this, edit in their own segments at each race to create their own individual programmes. These are companies such as Britain's ITV, Germany's RTL, Japan's Fuji TV, Italy's RAI ad France's TF1. They each pay as much as $15m a year for the rights.
In addition a separate team of FOC TV directors produce what is known as the "Supersignal". This started at the German GP in Hockenheim last year and features five different TV feeds, including a main feed, an incident analysis channel, in-car footage, pitlane footage and data. It is broadcast only by digital TV companies, which can beam all the signals into private homes by satellite on a pay-per-view basis. Viewers pay a subscription and buy a control box with which they can switch between the channels.
Ecclestone has already concluded deals with Germany's DF1 and Italy's Telepiu but the big player in digital TV is the French organisation Canal Plus which is rumoured to be paying Ecclestone $60m a year for the digital rights to 60 countries around the world.
But this is just the beginning. Ecclestone's technicians are already working on a concept called "virtual advertising", in which the advertising billboards around the track can be used to display different messages in different countries. When a car hurtles down a straight the television viewers in India might see a large Marlboro sign behind the car; while the viewers in France - where tobacco advertising is banned - will see an advert for Perrier mineral water. Viewers in China will see a Mild Seven advert. This means that sponsors can target their audiences and not use the current scatter-gun approach of television. The fact is that Ecclestone and the men who sell the advertising on the billboards will now be selling each one up to 200 times - once for each country in the world. And that means that money will be pouring into the F1 coffers more than ever.
Viewers may have noticed that at both races so far this year there has been a bright green advertising banner above the start-finish line in Melbourne and at Interlagos. These are being used to continue the development of virtual advertising technology which is currently only successful with static objects, such as advertising next to baseball scoreboards in the United States - where the concept was first thought of. Ecclestone hopes that soon his electronics men will be able to electronically different sponsorship messages on billboards which pass through the TV pictures.
This technology is still secret but it is expected that Ecclestone will announce the breakthrough before he launches his Formula 1 Holdings company onto the world's stock exchanges. The potential earnings of the scheme will help convince financial institutions to invest in F1 and raising what is estimated to be $4 billion for Ecclestone.
FOC is also researching other ideas such as fully automated camera systems, activated by electronic global positioning systems. These are widely used in modern navigation and have been used in motor sport by rally-raid teams on desert events.
A scaled-down version of the system, using a stationary airship above the track rather than satellites, can be perfected so that computers know exactly where every car is in relation to the others at any given time. Careful programming will mean that if an overtaking manoeuvre begins to happen it will be potted by the computers which will automatically switch to the relevant camera.
In the years ahead we are going to get much better TV coverage of F1 but the bad news is that we are probably going to have to pay for it, because it is inevitable that Ecclestone will want to restrict the current terrestrial "free-over-air" programmes so that people will pay for the Supersignal. At the moment pay-per-view audiences number only a few hundred thousand people, while the terrestrial coverage brings in hundreds of millions of viewers. Viewing figures are all that the sponsors care about but one can imagine in the years ahead, as pay-per-view begins to bring in billions of dollars of income and F1 becomes less dependent on sponsorship, that the traditional TV companies will lose their power and their interest. And that will mean that race fans will have to sign up with pay-per-view...