Summary Bullets:
- Formula 1 debuted its direct-to-consumer, OTT streaming service, F1 TV Pro, at last month’s Spanish Grand Prix. It was a massive, embarrassing failure, with many customers actually unable to watch the live stream of the race itself.
- Formula 1 owner Liberty Media needs to address any/all issues quickly, to ensure optimal quality of service (QoS) and experience (QoE) for this premium, live broadcast streaming service or face the prospect of losing a high-potential (and high-margin) revenue-generation opportunity.
Formula One (F1) marked the start of its European season this past weekend with the debut of its own direct-to-consumer, over-the-top (OTT) streaming video service, F1 TV Pro. Given F1’s position as the most watched, globally prominent, high-profile motorsport, service quality expectations were quite high. Instead, subscribers were served massive helpings of disappointment, most notably by being unable to watch an actual live stream of the race itself. Sadly, similar problems occurred during F1 TV Pro’s streaming of the next race, at Monaco, which is generally regarded as Formula 1’s marquee event of the year. In response, Formula 1 has set up a help account on Twitter (@F1Help) to address streaming issues. Still, some customers claimed to miss the first eight minutes of the Monaco race; @F1Help’s official post cited a “temporary blip” as the cause.
Like many live streamed sporting events before it, the F1 TV Pro delivery of the Grand Prix of Spain and Monaco suffered multiple snafus. This included the usual litany of streaming faults, i.e., substantial buffering, no audio, messages about “service initializing,” and a massive 40-second delay from the linear broadcast feed seen on traditional TV services. To be fair, in some cases, the end user’s broadband connection may be the weakest, failing link in the chain, but in 2018, streaming video is an almost ubiquitous application and most operators have adapted their networks accordingly.
The failure of F1 TV Pro is a potentially staggering one for F1’s new owner, Liberty Media, which bought F1 for $4.6 billion in 2017. In fact, if the array of problems are not fixed, and fixed fast, Liberty Media’s dreams of high-margin revenues from its direct-to-consumer OTT service will disappear faster than an F1 car into the tunnel at Monaco.
The only silver lining with the F1 TV Pro coverage failure is that a tiny fraction of F1 fans/viewers of the races in Spain and Monaco were impacted. Unfortunately, that tiny fraction is arguably F1’s most rabid fans, those willing to pay EUR 170 per year to see one sport. Using Liberty Media’s own bold projections, specifically, that of the claimed 500 million global F1 viewers, 1% (or 5 million) are an “addressable market” (likely subscribers) for the F1 TV Pro service. However, Morgan Stanley predicted a far less flattering number, i.e., only 1.7 million globally, a number that will be reached almost ten years from now.
So, what’s a multi-billion-dollar sporting venture to do? Well, Liberty Media will need to respond quickly, as additional failures will only compound the embarrassment of offering an OTT service that isn’t ready for prime time. This means working with all of its partners (e.g., content delivery network/playout, transport, and country- or region-specific operators) in the video streaming delivery chain to ensure that F1 TV Pro’s streaming quality is fully optimized and protected from all possible service impairments. Offering pro-rated refunds – a whopping two weeks’ worth for the initial failure to launch – might quiet the fan rage in the near term. But moving forward, F1 TV Pro must offer either a world-class service – one worthy of showcasing its world-renowned sport – or make a smart retreat back to its existing, and still quite lucrative, pay-TV distribution model.
With the Canadian Grand Prix weekend already underway in Montreal, it is critical that Liberty Media get it right in terms of delivering the F1 TV Pro service. Touting the service as offering content differentiation and a more personalized, “user-directed” viewing experience for customers is all well and good. However, delivering a linear broadcast-quality video streaming service is even more important. To achieve this, Formula 1 and its Liberty Media owners need to emulate their two-wheel colleagues at MotoGP, which has offered its VideoPass service for years now, offering comprehensive live streaming of each MotoGP event as well as a massive archive of videos dating back to 1992. Consumer tolerance for poor video streaming service will only decrease in the coming years, especially for comparatively expensive services. As such, Liberty Media must fix its QoS and QoE issues in the very near term or face a certain backlash and rejection of the F1 TV Pro service.