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The discussion continues on just how Formula 1 might cut costs and remain appealing to fans and potential fans. Formula 1’s changes have already caused much criticism and ex-driver Alain Prost said (using F1’s new pejorative “noise”):

“I still think the noise is an excuse, because a lot of other things are not going well.

“The big challenge is that the public, the people, the fans, they [need to] understand why we have done this change.

“In this case it is not all good, because they see there is a big change but they don’t understand very well why we have done that.”

According to AUTOSPORT, the quest for cost cutting may be coming back to the idea of banning in-season testing again. While this year has had two post-race tests in Spain and Bahrain, two more tests are scheduled after the British and Abu Dhabi grands prix.

It seem antithetical to me but banning in-season testing has been suggested as some teams feel it isn’t justified due to the increased expense and stress it puts on personnel. According to the report, there is also an interest in only having two sessions of pre-season testing with both of them possibly in Spain as leaving Europe gets too expensive.

In one sense, Prost is advocating less regulatory restriction of the sport in the interest of garnering new fans but the FIA and teams are looking at more sporting and technical regulation changes to help reduce costs in the series.

It is an interesting issue as current pop culture seems to elevate geek chic and algorithm sexy and one would think that F1 could be presented as the ultimate nerd tank for “smart people and fans”. Yet that appeal hasn’t been very impactful on the Gen Y hipsters, code jockeys and techno-savvy social justice #hashtagactivist crowd. This leaves the series wondering just what it has to do in order to survive financially as well as gain new fans.

Would reducing testing help gain fans? Most likely not. Would it save costs? Yes, but would the lack of testing produce good, competitive racing that is entertaining? If so, would the money saved from testing be used elsewhere and would it really be a savings?

So now we are down to changes to the sporting regulations or the technical regulations but which one? FIA president Jean Todt called the team’s suggestions a joke but Ferrari’s James Allison says that may be an oversimplification of the issue:

“One of things we’ve said is that in general the technical regulations have not been the happiest hunting ground for saving margins,” he said.

“Sporting regulations have been generally more effective in that, so if there’s an amount of effort to be put into discussing stuff, probably the biggest amount of money will be saved if we focus our effort on the sporting side.

“Saying that, there always are areas on the technical side where you can save chunks of money. I think it would be wrong to say these things are a joke.”

When you pull back from the fray, it really does appear to be several different marketing plans at war with each other and it will be very interesting to see which road F1 takes. In the end, is F1 simply going to shrink in size due to the lack of interest from the younger public at large? Will the series reduce to a size that is sustainable by Gen X and Baby Boomer interest only given the lack of Gen Y interest in the sport? Sure, not all Gen Y avoid F1 but the generation doesn’t represent the biggest demographic watching the series.

How to cut costs, remain true to its DNA and appeal to new, younger fans? Maybe F1 needs to just offer a knee-jerk reaction and cater to current Gen Y cultural morays? The problem with caving to pop culture is that you pin the future on things that very easily could backfire in their ability to appeal. As fast as MySpace grew, it died. Facebook is already seeing and exodus of young people (if you believe news reports) and F1 would be wise to stay true to its DNA even if that means that it becomes a $900 million sport instead of a multi-billion dollar sport. But is staying true to its legacy going to kill it? Surely a sport that loses the muscle on the bone will fall into atrophy and wither away right?

What do you think? Can F1 cut costs, appeal to new fans, keep legacy fans happy and explain its changes effectively to make Alain Prost’s notion a reality? In the end, Prost feels the regulations, whether for cost-savings or not, are confusing new potential fans:

“I know F1 and with all the information you have I find the races very interesting,” he added.

“But I think about if I do not know F1 very well and watch it on TV, will it be something that I like to watch? I am not quite sure.

“We have a lot of restrictions, a lot of regulation, and maybe we went too far.

“We have no big [strategic] risk now. You need to understand what is happening, but not the fact it is all written in advance.”

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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.
  • Has a poll breaking down audience demographic been produced? I’d be curious to see what qualifiers said poll optioned (age, fan-tenure, interest avenues, etc.). Anecdotally, I assume like you a minority percentage are Millenials simply based on population, but I’d be hesitant to assert it w/o facts.

    At its crux, F1 is facing a simple issue: Retaining/expanding media and thus financial market share in a rapidly-expanding universe. However, that simple problem is subject-dependent, so comparative analysis with different industries or even disciplines within sport is difficult at best. Add a lack of proven roadmaps to success, F1’s competing demands (on track competition vs. technical purity vs. safety), then mix in warring factions’ self-serviced interests trumping the sport-as-a-whole’s well-being, and one can see why this problem is such a difficult one to solve.

    There’s definitely been an accelerated evolution in how audiences consume media over the last decade, but IMO it’s too easy blaming fickle young ‘uns. Audience preferences as a whole have shifted, be it the 18-24 trend driver, 25-40 earning base, or 45-60 stalwart. I’ll agree where one prioritizes its focus determines what strategy’s chosen and how its implemented.

    I think M. Prost has a good point, but he misses positive potential implications regarding the reg changes. The new formula is filled with technical intricacies that on the surface make little sense to the average fan; just look at the fears over trundling cars pre-season with regulated fuel flow/capacity. No one, be it FIA or pundits, explained to fans how ERS was intended to fill in the power gaps ICE limitation left. On track competition has thus far proven the regs effective in promoting racing, yet many fans still feel drivers and cars are trundling around a la 2013. (Aside: Yes, I know there’s pace-management; it’s always been that way.)

    No matter whom F1 choses to cater, it must recognize how it packages itself is more important than ever. The fact that we fans have access to more anorak data or insider intrigue is a multi-edged sword; there’s potential to immerse in the available info or become lost in the subtleties. We can embrace the changes as evolution and progress or dismiss them as compromise. The F1 entity must chose a progressive path, then explain it clearly and concisely to us, and accept it will gain/lose fans.

    • Every comment I have read from team bosses, FOM and even the FIA have all asserted that they are not getting the younger generation. I doubt they are speaking on Gen Z here. There are roughly 80 million Millennials in America so the population isn’t that small. If birthrates would have continued at some modicum of before, they would have eclipsed the Baby Boomers in number.

      • Thanks. Not gross population figures, but F1 audience figures. Yeah, although Sesame street had a cool Indy 500 celebration (babysitting the goddaughters… Love that Cookie Monster).

  • I missed the opinion or inference that F1 is better served servicing the “older” or more seasoned fan. Who is that fan, and why does he/she automatically become a “pure” fan? Experience?

    Being 36 and an F1 fan for 25 years, I’m in that nether region between Gen X and Y. I consider myself a seasoned fan, yet my watching habits are in no way representative of a whole, recognize I’m as fickle/uneducated/biased toward the product and the presentation as any. You and I watch the sport for different reasons, so which of us does F1 cater itself to?

    • I’m not making that inference, Jeff. I am asking if that is what F1 should do or should they cater to the younger generation with things that are popular in their culture? There is no intended message I am delivering here just asking the questions. If they cater to both generation (suspend whether they are veteran or new fans for a moment) then what would that look like? I’ll be honest, I am so tired of watching shows that pop up graphics of what people are saying on Twitter during the show. That’s annoying as hell. but is that what would appeal to Gen Y?

      • My mistake. I assume from “Maybe F1 needs to just offer a knee-jerk reaction and cater to current Gen Y cultural morays?” and “Surely a sport that loses the muscle on the bone will fall into atrophy and wither away right?” you’re opining F1 should stick to its long-term fan base, whatever that is.

        I agree w/ the social media issue, but it isn’t merely a young-generation thing. I don’t know Facebook’s demo numbers, but a friend holds a position @ Vine where she sees user metrics; I don’t know if its public, but suffice to say a surprisingly large % are in other age and economic backgrounds than one might expect.

      • PeterFan

        IMHO, one step should be to expand the distribution of the coverage. As of now, F1 is TV only entertainment. Yes, there web sites, Twitter and etc. but none of it is core to the show.
        I can be classified as GenY and I use my TV for a single thing only – watch the 8PM news. Having seen Sky and BBC F1 coverage, I find our local one … lame.
        As of now, I usually deliberately miss the race, don’t read any news that day and download a TV rip of the SkyF1 show to watch it later in the evening.
        There should be an official streaming service. This would be a new revenue stream catering the crowd, that doesn’t use TVs or travels.

  • Tom Firth

    You know I think F1 should target those younger than Gen Y, Growing up it came to my attention quickly that i was the only kid who liked F1, everyone else liked football, sure I stuck with F1 but if Football is influencing younger generations, whilst F1 isn’t as effectively, maybe its that age the sport should be looking towards. By the time Gen Y comes of age, it’s abit late really in my opinion if its the future F1 is looking towards and not the present.

    F1 and motorsport is trying, Things like F1 Race Stars and Roary the racing car as well as Pixar’s cars and Dreamworks Turbo are aimed at younger children, to try and get them to embrace the sport.

    Social media is a major issue for F1 though, although apparently only 23% of social media traffic is actually engagement with brands (2011) Which is interesting, If F1 does have an official social media platform, it needs to be communicated effectively. I imagine F1 would launch a page and it would just be a simulcast of the F1 site, Which would create little response from the demographic likely.

  • rapierman

    Okay, from the Baby Boomer side here: Like the US Federal Government, Formula 1 can only cut back so much before services and operations suffer. The problem is that the head organization, like certain Congress-people and Senators, think that the world can get by on less, but then you get to a point that you cut off your nose to spite your face. Everyone thinks about cutting expenses, but nobody thinks about….in fact, is either running screaming away or is trying to, for lack of a better term, commit financial genocide upon the alter the thought that you also need to generate extra revenue, or at least find a new stream. Now, I don’t know about you, but you do need to think about generating more income, and that usually comes when you cut the price of everything and drive up the income through increased participation (that is, the lower the price, the more attendance you get.

    To help make attending and paying those expenses more affordable, you have to come to the realization that attendance income alone can’t support the expenses Formula 1 generates. This is where you have to look to sponsorships to help pitch in and make the series financially viable. Too big? Never say “too big”. That’s a cop out. We have Bill Gates for God’s sakes! I’m sure that there are others around the world that are just as rich as he is. Furthermore, don’t rely on any one single sponsor. Get as many as you can.

    Don’t be too proud to go on the street corner like the beggars. Your financial survival may depend on those who will help you in your time of need, and that time is now. With the addition of sponsors, you can afford to drop your prices and generate the income you need.

    Don’t put the blinders on. Be open to new ideas. The life you save may be your own.

  • jonnowoody

    As with most business re-organisation, cutting costs must come from the fat rather than the sharp end.

    Proposal no. 1: Teams put aside their differences and negotiate as one for reasonable funding at the expense of the Capital Partners, under threat of non competition.

    Should they not agree, stock in the series plummets. Teams buy the sport. Cost cutting not relevant.

    Organise your own flow-chart from the pieces above.

    Divide and conquer has made a battered spouse of the teams.