Bernie has a Silver Moment...

[Soundtrack]

Bernie also deals with broadcasters, teams sponsors are concerned by drop of TV audiences. Youngsters watch on demand/on the go.

 

[TenEightyOne]

Bernie also deals with broadcasters, teams sponsors are concerned by drop of TV audiences. Youngsters watch on demand/on the go.

Which is available now. That's down to the tech of the broadcasters. What images are they showing, who do you think Red Bull's target demographic is, and why would Bernie be trying to sell blue-chip products into that market?

 

[Soundtrack]

Sky services are geographically limited if that's what you are referring to. Its not a tech problem. National (publicly funded) broadcasters can possibly not compete in terms of diffusion rights fees. They can only afford the basic package.

 

[TenEightyOne]

Sky services are geographically limited if that's what you are referring to. Its not a tech problem. National (publicly funded) broadcasters can possibly not compete in terms of diffusion rights fees. They can only afford the basic package.

Is that relevant? You can't sell interactive TV into places where there's no facility for interactive TV. The BBC as a nationally-funded broadcaster only cover about half the races live but still manage interactive content and all kinds of clever gubbins. Sadly they have Suzy Perry too, but you can't have everything I guess.

 

[Robin]

The sooner this doddery old fart leaves F1, the better it will be for the sport.

Enter... Tamara Ecclestone

 

[Bo]

Enter... Tamara Ecclestone

I didn't think F1 could be doomed any further.

 

[photonrider]

If my youngsters hear about this - and being the naturally rebellious persona they are - they'll be watching F1 just to check out why they've been 'forbidden' to partake. They may even make watching F1 a habit.

Wait . . . there's something fishy about all this.

 

[eran0004]

Bernie says F1 doesn't need young fans...

...to finance F1, because they don't have any money.

Here is the actual interview, because it's good to read things in context: http://www.campaignasia.com/Article...e-ecclestone-on-his-billion-dollar-brand.aspx

 

[TenEightyOne]

...to finance F1, because they don't have any money.

Here is the actual interview, because it's good to read things in context: http://www.campaignasia.com/Article...e-ecclestone-on-his-billion-dollar-brand.aspx

I already linked it for him, don't think OP had actually read his article, the link's quite early on

 

[Soundtrack]

Is that relevant? You can't sell interactive TV into places where there's no facility for interactive TV. The BBC as a nationally-funded broadcaster only cover about half the races live but still manage interactive content and all kinds of clever gubbins. Sadly they have Suzy Perry too, but you can't have everything I guess.

Actually, those structures exits. Football is for quite some time now in the hands of the pay channel’s (Public ones having magazines, highlights content with catch-up on the go all available or even specific leagues exclusives). But the offering is plethoric compared to a mere up to 20 races a season of F1.

Maybe Belgium is just an anomaly because of its small size and linguistically divided market, but so far no subscription based channel has taken the license. French open air TF1 lost F1 in favor of crypted Canal+ last year, and the audience has been dropping. Questioned on the matter Alain Prost (occasional stringer for the show) commented that things shouldn’t be seen in terms of quantity but rather on quality, mentioning a more well-informed audience...

Going “where the money is” looks like the straightforward option by economical means, of course. But that logic will eventually - more or less imminent - show its limits when it comes to the actual discipline. Struggling teams aside, would you trade in Spa-Francorchamp - or any other classic that can’t durably stand the growing fees - over yet another emerging (dull) exotic?

Bernie for sure made no secret that “small pockets” are expendable. I believe it is sad, but that is just an opinion.

 

[TenEightyOne]

If my youngsters hear about this - and being the naturally rebellious persona they are - they'll be watching F1 just to check out why they've been 'forbidden' to partake. They may even make watching F1 a habit.

Hopefully they're clever enough to read the article for themselves and see that OP got click-baited by a shoddy re-write of the original

Bernie for sure made no secret that “small pockets” are expendable. I believe it is sad, but that is just an opinion.

But again, we're not talking about broadcast provision or broadcast money. Bernie says he's not selling F1 to a youth market because they have no money. But he only sells one bit of F1; sponsorship of the organisation (and paddock club etc.) itself. The teams sell their own space and engage young people much more.

 

[Soundtrack]

Broadcasting deals come second in Delta Topco's revenues just after race hosting fees. Trackside hospitalities and sponsorship only represent a fraction of these.

And teams are concerned by the fading audiences, it's up to Bernie to make sure his feeds reach the appropriate audience.

 

[TenEightyOne]

Trackside hospitalities and sponsorship only represent a fraction of these.

But, once again, his comments were that those sponsors are not aimed at a youth market. Which makes perfect sense. Of course they're not, the youth market can't afford those kinds of F1 tickets or products. Most of the adult market can't.

And teams are concerned by the fading audiences

Source? The figures have been mixed this year but have, as far as I'm aware, been much better than the big 2013 dip.

it's up to Bernie to make sure his feeds reach the appropriate audience.

No, not really. It's up to Bernie to sell it to channels. It's up to channels to reach the appropriate audience. Bernie's deal with Rolex won't even factor in that; it's a different market. The TV companies will be looking at the teams, the cars and the stars. That's what sells.

Did you read the article as you seem to be confusing TV arrangements with branding?

 

[Tom]

This frustrates me greatly. I've been a fan of Formula One since I turned seven, and have watched the vast majority of races since, and I'm so incredibly fascinated by the sport and its political nature that I would like to progress into the industry as a career.

Yet Bernie states that the younger viewers aren't interested, and don't know what they want in life at the age of 15 or 16? I've known that I've wanted to write about the sport since I turned 13. Perhaps I am an exception to the rule (though I like to think that I'm not), but now that I am actually writing about the sport on a semi-regular basis, I now realise that I've made the right decision.

He has a point by stating that most will recognise Ferrari but not Caterham, but perhaps that's a fault regarding the promotional side by not recognising the good (in my opinion) that the smaller outfits have the potential to do for the sport.

I feel an article coming on, and a rather angry one at that.

 

[TenEightyOne]

I feel an article coming on, and a rather angry one at that.

It's a decent article, I just read it

Aren't you also missing the point though... this isn't what Bernie does and it isn't what he needs to do, it isn't even his job. It's up to those who own the sport to decide things like that and its up to the broadcasters to innovate the platform in each territory - even trying to manage that centrally would be disastrous. We've already seen that when F1 tried to take care of its own media formats.

 

[Tom]

It's a decent article, I just read it

Aren't you also missing the point though... this isn't what Bernie does and it isn't what he needs to do, it isn't even his job. It's up to those who own the sport to decide things like that and its up to the broadcasters to innovate the platform in each territory - even trying to manage that centrally would be disastrous. We've already seen that when F1 tried to take care of its own media formats.

For sure, you have a valid point. But, Bernie is perhaps the most central figure in Formula One, especially this year given his court escapades. Think about it from a young person's point of view though, it's not particularly encouraging to hear/read about something like that in the media.

He stated that they won't be able to grow the market, but hopes to retain it for the coming season(s). We know that viewing figures have been down this year due to the Mercedes dominance, new engines and so on, but shouldn't he be praising the good of the sport, instead of focusing on the poorer points, with no realistic plan for improvement?

 

[TenEightyOne]

For sure, you have a valid point. But, Bernie is perhaps the most central figure in Formula One, especially this year given his court escapades. Think about it from a young person's point of view though, it's not particularly encouraging to hear/read about something like that in the media.

This was a business interview given to a publication most people would never read. It's only the mis-reading of it that's actually made it famous. Most of what he says seems perfectly obvious to me. If he was all there was to the image of the sport then there'd be a problem but realistically he forms a very small part of the image.

 

[niky]

Reading through some of the comments here, and through that absolutely execrable NBC article, right after reading the original interview where HE DOESN'T SAY THE THINGS NBC SAYS HE DOES (urgh... excuse me... gas)... makes me want to bang my head against the wall... then walk over to NBC's clickbait-worthy excuse of a sports newsroom and bang someone else's head against the wall.

Bernie doesn't say he doesn't need a young audience. He says that he doesn't understand social media, and that it's more important to reach the right audience (people who might actually contribute to the sponsors' bottom lines) than to simply target "all teh yoong onezs!1!!1!" He notes that social media is ephemeral, and any concerted effort to market on a single platform to attract new viewers might simply be a waste of money.

And he's right, sad to say... though it's a shame, as social media is also a way to connect with current viewers.

I also like his point about teams that leave. If a team isn't serious enough about Formula One to run a tight, competitive ship and seriously chase down sponsors and results, then it shouldn't be in Formula One. Look at the difference between a Sauber or Force India and a Caterham or a Marussia... while more teams are nice, having a team for the sake of having a team just isn't a good marketing or business strategy.

-

In the end, sadly, his very grim prognosis that the best he can do is try to retain the current audience rather than grow it, rings pretty true in this day and age. Digital natives simply aren't as engaged in broadcast TV-era sports. Especially not ones which they will never, ever be able to participate in. Young people barely care about cars, as it is... making them care about motorsports is an even bigger ask than making them actually buy cars.

That doesn't mean F1 shouldn't try to reach people outside their traditional audience. But it'll take some more forward-thinking people at the helm to make this happen.

The problem is, when they do come up with things that are truly game-changing, the old farts who latched onto F1 in previous decades start to complain...

-

@TenEightyOne: Was chuckling at some of the sly, off-the-cuff sexist comments in that interview. But you'd expect that of a crotchety old fossil like Bernie.

 

[Soundtrack]

I also like his point about teams that leave. If a team isn't serious enough about Formula One to run a tight, competitive ship and seriously chase down sponsors and results, then it shouldn't be in Formula One. Look at the difference between a Sauber or Force India and a Caterham or a Marussia... while more teams are nice, having a team for the sake of having a team just isn't a good marketing or business strategy.

Short term memory loss maybe? Those teams were called in (reassured costs issues would be addressed and tamed) to fill spots leaved empty by fainting car manufacturers. They had their financial planning working accordingly.

Despite having a harder job to secure (still increasing) budgets (less FOM money/less (media)vision/less sponsors) Marussia did indeed seriously chase down their first meaningfull result.

As for the midfield teams you point, it wouldn't really surprise me should Sauber suffer a similar fate to the smaller outfits...

Bernie doesn't say he doesn't need a young audience.

Silk: Do you believe there is no value in reaching this young audience?

Ecclestone: If you have a brand that you want to put in front of a few hundred million people, I can do that easily for you on television. Now, you’re telling me I need to find a channel to get this 15-year-old to watch Formula One because somebody wants to put out a new brand in front of them? They are not going to be interested in the slightest bit. Young kids will see the Rolex brand, but are they going to go and buy one? They can’t afford it. Or our other sponsor, UBS — these kids don’t care about banking. They haven’t got enough money to put in the bloody banks anyway. That’s what I think. I don’t know why people want to get to the so-called "young generation." Why do they want to do that? Is it to sell them something? Most of these kids haven’t got any money. I’d rather get to the 70-year-old guy who’s got plenty of cash. So, there’s no point trying to reach these kids because they won’t buy any of the products here, and if marketers are aiming at this audience, then maybe they should advertise with Disney.


Read more at http://www.campaignlive.com/article...lion-dollar-brand/1321998#B95LeIUZdSXXzvxB.99

 

[TenEightyOne]

Short term memory loss maybe? Those teams were called in (reassured costs issues would be addressed and tamed) to fill spots leaved empty by fainting car manufacturers. They had their financial planning working accordingly

Source for their financial planning?

What happened was that two businesses spent more money than they had, then they went bankrupt. If they'd spent less they'd still be here. It doesn't take a businessman as clever as Bernie (also a very successful team owner) to know that you'll go bankrupt.

The difficulty is when teams come in and think they can build a winning car on a Marussia budget... you can't, sheer chance aside. The scrabble to be in the last 10th place position may well be what finished both off, but realistically they simply spent/promised too much money.

 

[niky]

@Soundtrack - To address your two points:

Ecclestone: Just don’t spend as much. These teams don’t need to be in financial trouble. They need to think about what they have got to spend and do the best they can with that. Take Williams, for example. Years ago Frank (Williams) had a very small budget and was generally in trouble. Yet he always paid every dollar that he owed. He ran his team accordingly with the amount of money he could come up with. He didn’t have dreams about competing with Ferrari. Eventually things got better and he built the business and now he’s where he is today. It’s the same for everything in life, isn’t it, really?

This rings pretty true for Caterham, which simply started as a Tony Fernandes vanity project. For Marussia... sad, really... but what can you do? Backmarkers have been failing for decades. Big teams have failed, too. But just because Toyota went belly up without good results doesn't mean they're impossible. Look at what Williams has done this season... without Toyota-level money. Same with Lotus... though yes, they're not on the firmest of ground.

That said, F1 could certainly make it easier for the smaller teams, but the quality of those teams entering has to be good.

As for your second point, within that very paragraph:

I don’t know why people want to get to the so-called "young generation." Why do they want to do that? Is it to sell them something?

On one hand, he's a bit off, as kids do buy things like Red Bull or Virgin Cola. But Bernie also has sponsors who sell expensive items that need to show a reason to be in F1.

I can understand the issue. Our magazine has nearly a million Facebook followers and thousands to tens of thousands of likes on each post. We've engaged the social media demographic. Our prime competitor in this market only gets a scant handful of likes on each post.

Does it bother them? Maybe. Does it hurt their bottom line? No. They cater to an older, richer demographic that spends less time on Facebook and more time reading print magazines. From what I hear, they make much more money from print advertisers than we do. And they have to write to their demographic, not ours, to do that.

-

Of course, Bernie does recognize the need to reach new viewers. He says so right in the next section:

You’re right that we should use social media to promote Formula One. I just don’t know how.

And here's the kicker... he's actually thinking about hooking those teenagers on the brand, not just reaching them now but eventually losing them later:

They say the kids watch things on (tablets and phones), but it doesn’t mean they’re watching Formula One. And even if they are today, will they still watch it when they are 40?

In the end: Bernie is not saying they don't need teenagers. He is simply saying that if he gets them, he needs them to stick with the brand for the long haul. He doesn't want people who will watch the sport and then leave before they reach the age where advertisers will be interested in them.

-

Marketers think in views and reach. Businessmen think in dollars. This reminds me of the Taylor Swift-Spotify tussle. What gets lost on most people over her dropping a half-million dollars in profit is that she actually makes more money on Vevo... which is absolutely free to users, and that dropping Spotify increases the traffic to Vevo and the push for physical album sales. It's not a popular choice she's making, but she's a businessperson, not a marketer.

And a much prettier one than Bernie, at that.

 

[Soundtrack]

Source for their financial planning?

Common sense if I dare. As you say, it doesn’t take much grey matter to figure out that without a cost control/cap these replacements teams would be relegated at the very lower end of the grid. I don’t believe you enter a racing series with that objective.

The difficulty is when teams come in and think they can build a winning car on a Marussia budget...

I don’t believe you enter a racing series with that objective either. You should be enabled however to make your way through the field; assuming you start building a better car than your opponents.

It has been reported that Red Bull Racing broke a new ceiling with a record £196m spending for 2013. You could easily conclude F1 is a very expensive discipline indeed, not opened to small players no matter how motivated they are.

However, looking at the figures it appears that Red Bull - as a company - only had to cash in £13m to balance that budget (less than 7% of the total figure). In other words, it took Red Bull as little as £13m to secure a 4th consecutive Constructor’s and Driver’s Championship.

Two further titles who would eventually provide them enough prize money and sponsorship (+ extra cash-in*) to grab whatever (second and third) was left by unchallenged Mercedes, and despite starting with a car that could barely complete a single lap during winter testing.

Eventually F1 will become a very profitable marketing platform indeed.

*You may wonder how distant that figure is from the total Marussia budget.


@niky Fair points, but as you say Williams is the very proof that you can compete in F1 without inconsiderable budgets. They sure benefit from their history and record when it comes to sponsors and possibly enjoy a preferential status when in comes to the F1's revenues too. As for what could be done, since cost caps are out of the equation, a little less disparity in the distribution of income could possibly have been beneficial for the sport. With less money being throw at them top teams could eventually start being more responsible with their spendings.

Concerning the switch to new media/ stick to hold it's hard to tell what Bernie has on his mind really. He could well be playing an illusionist's trick putting people's attention on one hand while the other performs the magic...

 

[TenEightyOne]

Common sense if I dare. As you say, it doesn’t take much grey matter to figure out that without a cost control/cap these replacements teams would be relegated at the very lower end of the grid. I don’t believe you enter a racing series with that objective.

Then you don't follow F1 at a guess... it's always been the way. Something like 80% of F1 teans have failed and very few of those made it further than the back of the grid.

In other words, it took Red Bull as little as £13m to secure a 4th consecutive Constructor’s and Driver’s Championship

Fantasy island.

Williams is the very proof that you can compete in F1 without inconsiderable budgets. They sure benefit from their history and record when it comes to sponsors and possibly enjoy a preferential status when in comes to the F1's revenues too. As for what could be done, since cost caps are out of the equation, a little less disparity in the distribution of income could possibly have been beneficial for the sport. With less money being throw at them top teams could eventually start being more responsible with their spendings.

When was the last time you bothered to actually read an F1 team's accounts and arm yourself with accurate information?

Start with William's F1's 2013 balance report, maybe

 

[Soundtrack]

That £70m under RBR figures...

The team’s income hit £197m last year and it comes from three main sources: sponsorship, prize-money and payments from their owner, the energy drinks company Red Bull, run by billionaire Dietrich Mateschitz. The first two areas accelerated last year, meaning Red Bull could reduce the amount it poured into the team by £54m to £13m.

 

[niky]

You don't enter F1 simply to enter F1. You have to have a business plan. Williams and McLaren have engineering operations that also earn for the companies. Red Bull's F1 venture is part of a big motorsports business funded by the drinks empire.

Caterham's marketing connection to either Lotus or Caterham was pretty shaky from the start. And once transferred to new owners, it didn't really have anything else but a name to sell. Not building up a support system for the team outside of F1 is not a good way to build the business.

I think we'd all be interested in seeing Lotus F1's books... if only for the giggles.

Even the most successful of "independent" businesses in the automotive industry nowadays have gotten there by having more eggs and more baskets. Pagani comes to mind... built off of the back of a successful composites concern. Whereas contemporaries like Gumpert and Wiessman have fallen by the wayside.

Concerning the switch to new media/ stick to hold it's hard to tell what Bernie has on his mind really. He could well be playing an illusionist's trick putting people's attention on one hand while the other performs the magic...

It's 2014 and live streaming is still not here.

Note... there is a difference between live streaming (and F1's own live telemetry) and social media. They are using the internet to connect with current spectators. The discussion on social media is using the internet to reach new spectators.

His point is that people who don't currently follow F1 won't follow F1 even if it were on social media.

Like Justin Bieber... everybody knows what F1 is. And people who don't follow it yet either simply aren't interested enough in the products (sponsor products, race tickets, pay channels) to chase down, at this point.

 

[FoRiZon]

Speaking of Bieber, Im not sure why in the hell Singapore place F1 and "mainstream young adult favorites" into one. Trust me they dont mix each other. F1 fans will snark on the latter while young adults are simply didnt interested in F1.

Not saying that the reverse of those people are not exist but thats why i said "mainstream".

 

[niky]

Yeah... the artist list over the past few years has been... strange.

Still, Singapore is one of the few new GPs that does it absolutely right. The race is part of a well-thought out package, where local tourism and Formula One feed off of each other to mutual benefit. Whether or not it's worth it in strict monetary terms, it's helping build Singapore's image as a go-to destination for the jet-set.

That's not something a bespoke racetrack out in the middle of nowhere can do.

 

[Dotini]

You don't enter F1 simply to enter F1. You have to have a business plan.



I think we'd all be interested in seeing Lotus F1's books... if only for the giggles.

You have to be a complete nutcase to get involved in F1. Ken Tyrrell and Frank Williams are great examples. They would carry the car on their own backs to get to the racetrack, if necessary.

Colin Chapman's Team Lotus had a long string of crooks, felons, gangsters and drug-runners in its financing. The same thing is true of many other racing teams, I'm quite certain.

If alcohol, tobacco and marijuana advertising were allowed, perhaps more money could be found for some teams.

 

[ukfan758]

If it weren't for Bernie being greedy and allowing pay-tv channels to air F1 races instead of free to air tv channels, F1 I think, would have much higher tv ratings and a lot more fans, which would mean more money in the long run. When you put races on pay channels like NBCSN, you get small viewership compared to if they are broadcasted on the BBC, CBC, 7, or NBC. When a sport gets more exposure, more people will know of the sport and might want to go to an event.

 

[TenEightyOne]

If it weren't for Bernie being greedy and allowing pay-tv channels to air F1 races instead of free to air tv channels, F1 I think, would have much higher tv ratings and a lot more fans, which would mean more money in the long run. When you put races on pay channels like NBCSN, you get small viewership compared to if they are broadcasted on the BBC, CBC, 7, or NBC. When a sport gets more exposure, more people will know of the sport and might want to go to an event.

I thought F1 had to have a free-to-air presence (at least partially) in each territory? I might be wrong about that of course

It's free to air on the BBC in the UK but the ratings aren't so good, probably because about half of this year's races on the Beeb have been highlights only.