The number of people watching Formula One on free to air television in Britain reversed by 44% to 1.7 million for last month’s Bahrain Grand Prix driven by the live race broadcast being moved on to pay TV according to new data.
Over the past 11 years, F1’s total TV audience has crashed by 18.3% to 490 million as the series has signed more pay TV contracts. Some expected that F1 might put the brakes on this following its takeover in 2017 by Liberty Media, the investment firm which is listed on the Nasdaq with the ticker FWONK. One of Liberty’s presentations referred to the “opportunity to improve fan experience” but it soon became clear that this didn’t involve giving the red light to pay TV.
In 2017, we revealed that Liberty’s chief executive Greg Maffei hoped to boost F1’s broadcast revenue by “moving potentially to free-to-air to competitive pay services.” Testimony to this, in January last year F1 signed an exclusive contract in Italy with Sky Italia which had previously shared coverage with free to air station RAI. Sky Italia is paying for the privilege and according to a report last year from investment bank Morgan Stanley, its annual fee comes to $125 million which is a 53% boost on 2017.
Pay TV broadcasters can often afford to outbid free to air stations because they are flush with subscription fees and use them to buy content which tempts new customers. One of F1’s biggest-ever pay TV deals began last month when Sky Sports became the exclusive live broadcaster of all of the races in Britain. For the previous three years around half of them were shown live on British free to air network Channel 4 which also broadcast delayed highlights of the remainder. That arrangement came to an end this year and has fueled concern.
Britain is an incredibly significant market as it is home to F1’s headquarters, six of the ten teams are based there and the first-ever F1 race took place there in 1950. That race, the British Grand Prix, will be the only one live on Channel 4 this year as it is showing delayed highlights of all the others.
The contract sees Sky’s broadcast fees in Britain doubling as it is paying F1 an estimated $150 million annually. The high-octane deal was signed by F1’s former boss Bernie Ecclestone and Liberty inherited it when it bought the business. As we reported, even though viewers can’t watch the races live for free, F1’s global research director Matt Roberts claimed in December that the new agreement would rev up its audience on Channel 4.
“Channel 4 will have the highlights next year and we have worked with them to ensure they show the races in a favourable prime time slot. We estimate that we will actually have more viewers next year in the UK (thanks to this prime time slot) than we had this year.” It seemed to fly in the face of logic and research.
Before the 2019 season began we carried out detailed analysis of Channel 4’s audience data to get an idea of how much damage could be done by eradicating almost all of F1’s live free-to-air coverage. The data couldn’t be more authoritative.
It came from the Broadcasters’ Audience Research Board (BARB), the organisation that collects TV ratings in Britain. BARB is owned by six networks, including Sky, Channel 4 and the Institute of Practitioners in Advertising (IPA), the trade body for advertising, media and marketing agencies in Britain. BARB’s data is so highly-regarded that it is referred to as the ‘gold standard’ and is the official estimate of TV viewing which British networks use to sell advertising spots.
BARB’s data showed that the average audience for each live race on Channel 4 last year came to 2.65 million whereas the highlights broadcasts attracted 2.07 million each. It suggests that Channel 4 could lose as many as 5.2 million viewers this year as its tally of live races is falling by nine and each one is watched by 580,000 more people than the highlights. It could actually be on track to lose a lot more viewers than that.
This weekend’s Chinese Grand Prix is the 1,000th F1 race and the third this year. The season-opener took place in Australia in mid-March and Bahrain hosted the second at the end of last month. BARB’s data shows the dent that the Sky deal has made and it has only recently come to light.
BARB has a byzantine categorization system which involves its broadcast day beginning at 6am. This was chosen because it is when Britain’s breakfast TV services begin broadcasting in the early 1980s. Accordingly, it is rare for programming to cross the 6am divide and when it does it can create confusion.
This is because there is a risk of the BARB log entry being cut off at the 6am threshold thereby making the programme appear shorter than it actually is. It is a particular problem for live sport as the peak viewing time could be after the cut off point.
It can affect events such as boxing matches on the west coast of the United States, tennis tournaments in Asia and F1 which has several races that cross the 6am divide in Britain due to the time difference. The Australian Grand Prix is one of them and it calls into question the accuracy of the audience data for the race. However, the Bahrain Grand Prix isn’t affected by it as it is takes place in the afternoon in Britain.
It takes just over a week for BARB to update its system so the audience figures for the Bahrain Grand Prix have only been available for the past few days. True to its word, F1 got Channel 4 to show its highlights at prime time and the broadcast started at 9pm, five hours after the race took place.
The Channel 4 broadcast attracted 1.6 million viewers on TV, 16,869 watching on PC/laptop, 4,881 on a tablet and just 3,987 on a smartphone. It gave the highlights a total of 1,658,137 viewers which was lower than the audience for the programmes at the same time almost every day of the week leading up to the race. The Bahrain Grand Prix highlights had a lower audience than ‘Married at first sight’, a show about legal marriage with a complete stranger, reality series ‘24 hours in police custody’ and Gogglebox which shows viewers’ reactions to TV programmes and was watched by 3.5 million people.
Indeed, the Bahrain Grand Prix highlights attracted Channel 4’s lowest audience for the race since it started showing F1 in 2016. Its live broadcast steadily increased from 2.42 million in 2016 to 2.85 million the following year and reached a peak of 2.94 million in 2018.
The sharp crash in viewers this year reveals two potential flaws with Liberty’s strategy. Although it may seem ideal to screen the highlights at prime time, it puts them up against the leading shows on rival networks. This may be fruitful for a blockbuster movie or a series starring A-list actors but it’s a bold gamble to do it with a sports event which took place five hours earlier.
Liberty’s belief that more fans would tune in five hours after the event suggests that it thinks the racing itself is attracting most of them. In fact, the crash in viewers suggests that viewers are watching races to find out the result and once that it is known there is little need to see the highlights. If the trend continues it may only be a matter of time before the checkered flag comes down on Channel 4’s coverage completely.
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