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It’s time to upgrade Formula 1’s live data screen and why not? It’s been the same for decades. In a new initiative from F1’s technical partner, Tata Communications, the Connectivity Innovation Prize was launched last month and has a $50,000 prize for the winner.

Entrants in the competition can work with the data and also the GUI as well as UX or user experience in the look and feel of the new data screen. They can also consider possible TV graphics incorporated in the system as well.

According to Christian Sylt at Forbes, this contest is the first in three tests to improve the technology the teams rely on to develop their race strategy.

“The live data screen has remained the same since the 1980s and is highly complex, purposeful and powerful in its ability to deliver multiple data requirements in real time. However, there is an incredible potential to gain even deeper insight from the session timing information including proposed race strategy and the current car performance,” said Mehul Kapadia the managing director of F1 business at Tata Communications.

The issue at hand is data and the data sources that harvest this information. Kapadia reckons the way in which users consume this data is a critical reason for improving it:

“Today, over half a billion people watch each season and millions keep up with each race using web-connected devices. Due to the technological advances and explosion of data, the sport is now in an era where there are more data sources available than ever before.”

A key takeaway here is that Formula 1 isn’t driving a conversation on improving their technology and race data interface. It is a sponsor of the sport that is trying to create an innovation block within a sport it is sponsoring. That may, on the surface, seem innocuous enough but if you consider this closely—why does it take a sponsor to lead the innovation and technology evolution of the world’s most advance form of motorsport?

Surely F1 has its desires and plans for technology innovation? Perhaps not if Mercedes boss Toto Wolff’s recent comment to AUTOSPORT shed any light on the situation:

“I had quite a long row with Bernie in a meeting,” said Wolff about Ecclestone’s dislike of social media.

“We were talking each other down again and saying, we have lost 30 per cent of TV audience in Italy and we have lost some of the audience in Germany – although interestingly the UK is growing.

“Then you wonder why the audience is not growing and is diminishing if you sell the rights from free TV to pay TV. That is completely normal.

“But the other thing I mentioned was that we are having such an explosive growth in online activities – before Bernie said, ‘those guys are not paying and half our profit is TV.’

“Sure the [social media] model does not work yet as you cannot monetise it, but I can tell each of my sponsors that the audience seeing his logo is growing even though TV figures are down.

“Even the big players like Twitter have not worked out how to monetise it, but it is just a matter of time before we do that.”

You may feel that F1 should fully embrace social media, offer content for free on YouTube, Facebook and Twitter and produce content that everyone can enjoy without paying for it, the reality is that doesn’t pay the bills and the teams are reliant on TV revenue.

While Wolff can suggest that embracing social media will offset the loss in content monetization—such as the current F1 business model—in new sponsors and increased sponsorship, I find that a huge gamble and risk.

The reality is that TV revenue is more directly tied to the F1 audience than potential sponsors of, say, Marussia or Caterham. Broadcast companies have a keen interest in purchasing the broadcast rights for F1 and the content F1 generates has value. If you give all of that value away for free in the hopes that a new sponsor will support a team because their logo is seen in a Twitter feed, I think that’s narrow minded and falling for the shiny lights of overblown social media propaganda.

The simple fact that fans are digesting sport and entertainment in a different way isn’t a reason to immediately dump your content for free to the world. The fact is, F1 is a for-profit business and if I were Mr. E, I am not so sure I would simply fold like a chaise lounge on the issue of social media just because “everyone’s doing it”.

Color me reactionary but I am still bereft of the monetization model of Twitter or Facebook. The main people making any real money in these social media platforms are the owners of those platforms, not the content generators for those platforms. Until these platforms can show serious revenue models for content producers, I think it is prudent to tread lightly until convinced. Right now, Mr. E isn’t convinced and I am inclined to agree with him.

The backbone of these platforms and their revenue model is really boiled down to ad revenue. That’s it. F1’s broadcast package is content sold to broadcasters who then sell time for ad revenue. How do the two models combine to make a harmonious marriage between social media and F1? I’ll let you decide but I am sure that Mr. E feels that Facebook or Twitter is no different than NBC, Sky Sports or BBC in that if they want the content on their social media broadcast platform, then they can pay for it.

Consider it this way, Sky Sports purchased the F1 broadcast rights and then sells ad revenue time during their broadcasts etc. What Twitter, Facebook or YouTube are doing is positioning themselves as Sky Sports or BBC or NBC but they want the content for free and then they’ll sell ad space and make money. While the world may be fine with generating content for them for free, F1 is not and nor should it be.

Last year I spoke with Ferrari’s head of marketing, Stefano Lai, and he made the simple observation that social media is a new form of communication not unlike TV when it entered the world or radio when it was created. He’s right about that.

Monetization models soon developed for these legacy mediums and if social media wishes to survive, the onus is on them to create a business model that works and isn’t reliant on producers of content to give away their products for free. It’s not a new issue but there are lessons to be learned on both sides of the argument.

In their defense, Ferrari’s Luca di Montezemolo did call for an F1 summit around the Italian Grand Prix and suggested the sport invite Google and Apple to the meeting to try and get on top of the technology question. At least they are trying…sort of.

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An F1 fan since 1972, NC has spent over 25 years in the technology industry and as a CTO, he focuses on technology integration in commercial workspace design, AV systems integration, digital media strategies, technology planning, consulting, speaking, presenting, sales, content strategy, marketing and brand building.
  • Thinking of social media in 2014 like a 2014 TV station is a mistake, for TV stations only have to pay for content because they are less powerful than the entities they buy content from (which mostly means the major entertainment corporations, but also includes major sports promoters like FOM).

    Social media these days is more like newspapers than TV stations are – there’s the free content which is paid for by content that advertisers pay for. If a provider can’t generate the free stuff, it will have to pay for it. It is unlikely that social media will let Bernie charge them, after they have shown they can monetise ads perfectly well themselves (and, in Facebook’s case, more profitably than F1 itself).

    Social media is too strong and wealthy to need to act as the broadcasters did. If F1 ignores this, it is bound to lose out on influence in that sector. Since Social media is the 21st century’s most popular carrier of word-of-mouth, this also means F1 loses the primary means by which it can make money. Back when F1 was growing, it relied upon the free effects of social media (and other free sources such as office gossip) to grow. It’s no different now.

    • Those are great points for sure. I think FOM look at this from the perspective I mentioned at least in some part. The content is for purchase. Going on your line of thinking, the bigger, more powerful social media platforms certainly don’t have to buy the content if they don’t want to and perhaps F1 pays the price for not embracing the platform but in the end, the revenue stream for F1 and teams is TV money. How the FOM can change that to a different model involving social media and retain or increase their revenue stream is the real challenge. right now, Mr. E doesn’t seem to be suggesting they have a plan but who knows?

      • The trouble with that theory is that it stops F1 growing (since the growth is with word-of-mouth means such as social media rather than broadcasters), meaning that all F1 can do is try to stem the tide of people leaving. It may not take the hit now, but once a supporter is lost on the F1 model, 21st-century sociology means they’ll get, at best, a ninth of a supporter back. There comes a point where the financial streams cross over, and I don’t think F1 realises it exists, making it likely it will cross over without noticing.

  • rambaldi

    One thing I think should be corrected in the article, on platforms like Youtube (not sure about Vimeo but I would guess they have something similar) successful content producers get a share of the ad revenue. No one really knows what it takes to get the special letter from Google, and when you do you aren’t really meant to talk about it, but the content producers are getting money from it. If you look at some of the big gaming channels it seems to be sufficient to live on (and possibly a bit more) but probably not in the region of what you would get via traditional broadcasting.

    And that is the big difference between the two platforms, not who pays for what, but how much is being paid. Online advertising is far less effective and garners far less ‘click throughs’ when compared to TV.

    • All good points and nice clarification. My point here is that we would be talking about a need to generate hundreds of millions for F1 through these channels and while I can’t be certain, I doubt that kind of revenue is there. I very well could be wrong.

  • Mr. Obvious

    Yet, somehow, other sports, such as the NFL and NASCAR among a host of others, seem to co-exist with social media, and even thrive in an environment where the vast majority of their content is given away for free to the masses. Their model is dependent on TV revenue, for sure, but they also profit handsomely from merchandise sales and licensing. These sports have actually leveraged social media to expand their reach and popularity, and makes it easier for their fans to stay ever more engaged, all of which drives greater TV viewership, increased attendance, and prodigious merchandise sales. That’s the kind of ecosystem that F1 needs to evolve towards, rather than its current retrograde model that holds hostage entire nations for the privilege of hosting a race, and holds content rights so closely that the only time a fan (or would-be fan) ever has an opportunity to engage with the sport is during a race weekend.

  • Tony Geinzer

    Can’t NBC Bring Back “Must See TV” for a Rare Thursday Night F1 Race? I think the real issues are with Digital Piracy, and sadly, if there is going to be a “No Spoiler” Policy for Non-North or South American Races, at least delay the stream Monday Morning. And, no, Webcams are not the same as an actual race telecast and it would be like the Hollywood of today where fans cow scripts everywhere they turn, but, the quality is a sore corner.

  • I’m glad I decided reading this post; Kudos to all responders. Highlighting new and social media content streams as a revenue-positive and importantly promotional audience-awareness tool is a critical leap that I believe F1’s failed make. It’s the kind of constructive criticism I feel lacking in F1 forums.

    Audiences aren’t asking that streaming replace the primary broadcast, nor that F1 provide its services free (wouldn’t that be nice). Rather, we appear to crave access and immersion, and for the sport’s health, encourage promotion that engages potential future fans. Suggestions posted here are a great first step.

    I’m by-nature pessimistic regarding petition-effectiveness unless it regards basic social rights. However, selective recent history regarding media has shown cohesive public outcry can indeed change matters; witness tv/movie returns such as Jericho/Community/Veronica Mars, retraction by Facebook of certain identity tracking models, and so on. Using Facebook to poll and cull the fanbase, Twittter/Tinder/Imgur to notify gen public, Kickstarter to fund potential action… Is any of this viable to incite change, is the F1 fan community cohesive enough to promote change, and is the current unbalanced F1 climate amenable to proposal?

    I see several issues:

    1. Intent/Desires of fans.

    Disregarding the show itself, what is it we want to see? How much are we willing to spend?

    2. To whom do we reach out?

    Who’s really in control of F1? I’d say FIA, but Todt’s Bahrain comments, saying FIA “didn’t have the power” to enforce a salary cap upon the teams, was scary. If FIA’s sacrificed veto authority for funding concessions from CVC, the teams lack united coalition/all-inclusive entity, a decentralized promotional model means no head PR entity… where does a petition go?

    What about local cable providers, prominent bloggers, and such?

    IMO, we the audience has potential influence, but incepting and organizing it is an unknown. Am I off base, or is F1 ripe for audience voice?

    Aside: Jon Malone, as reported by Saward, is purportedly behind F1 scenes about purchasing F1 from CVC. He supposedly’s looking at a new revenue model incorporating much of what the posters here have mentioned. Reaching those entities who’s circles encounter his might be an end game goal. The power of Scarbs/Negative Camber/Fake Charlie Whiting/J. Saward and so on, provided impetus by us plebs from social media bombardment/talking points via #askcrofty et al, could be surprisingly effective.

    Rant off.