When Sky Sports took a comprehensive package of Formula One rights back in 2011, it was a landmark in two ways. The pay-TV giant’s entry brought an end to an unbroken era of free-to-air coverage in the UK, paving the way for world motorsport’s leading series to complete similar deals with subscription broadcasters in other major markets. But it also brought another first: a channel dedicated to the championship, with original programming and archive film rounding out extensive live coverage and analysis.
In 2018, Sky Sports will be sharing its status with as the live UK home of Formula One with free-to-air Channel 4 for the final season. From next year until 2024, it will assume exclusive rights as part of a renewed partnership with the series’ organisers.
Meanwhile, its relationship with Formula One has proved influential far beyond motorsport. After issuing a number of event-focused ‘pop-up’ channels, in the summer of 2017 it launched a total rethink of its programming strategy around single-sport ‘vertical’ channels, including one for cricket and a branded Premier League soccer network. This was coupled with a restructuring of its pricing model, making it easier for subscribers to pay only for the sport they wanted and hinting at greater flexibility to come in the OTT age.
With the 2018 Formula One season in its early stages, Sky Sports director of strategy Jonathan Licht recalls the journey the series has had, and explains how it continues to shape the future for the broadcaster.
Sky Sports is preparing to become the exclusive UK broadcaster for Formula One in 2019
How important has Formula One become to Sky Sports’ programming strategy?
It’s a really big part of what we do and has been from the day we acquired the rights. We knew that getting Formula One was going to be a really big opportunity for us when we did that back at the start of the season in 2012. Since then we’ve done a deal for exclusivity – that’s coming up on the horizon in season 2019. It’s a huge part of our offering; we see it in our figures on linear, on our digital platforms, that it’s actually right up there in terms of appeal. So it’s a big part of our thinking and it’s a big priority for us.
What will exclusivity in 2019 mean for the job in the year ahead?
It’s an interesting year ahead because obviously that is still a season away. I think it’s probably more in the background rather than the reality of what’s going on on the ground. We’ve always covered all the races, that’s the thing that people should realise, so from a production and practical and operational perspective, nothing is going to change. We’ve always been there. It’s just really who else is there that’s going to change. So probably not too much for this year – we’ll be planning and we’ll be thinking about it from a marketing perspective and potentially from an on-screen and talent perspective, but really, for this season, nothing changes too much.
Exclusivity is a huge part of our offering; we see it in our figures on linear, on our digital platforms, that it’s actually right up there in terms of appeal
Formula One is interesting in terms of its calendar because it’s expanded over the past decade into the winter. What does that do for the broadcasters for your planning and strategy between seasons?
It doesn’t change too much. It’s actually a slightly later start this season; we’re a few weeks later than we’d normally be. For us from a business and channel perspective, with respect, more is great, less of a break is great, but obviously it’s about the integrity and the quality of the sport so we let them decide how long the break needs to be and when we come back.
Part of our thinking around the channel and the launch at the time was the opportunity with Formula One to kind of be ‘always on’, with respect that there are some breaks. We felt previously that perhaps it was slightly disjointed – you’d finish a race and it would almost be: ‘We’ll see you in two weeks’ time,’ or, ‘We’ll see you in three weeks’ time,’ or ‘We’ll see you after the summer.’ And we felt there was an opportunity or an appetite to fill in those gaps.
We had this mantra when we started that the race is only part of the story, so in having this channel we were creating this destination for fans to go to at all points. We weren’t saying, ‘You must go there!’ We were saying, ‘If you really want to get some archives or you want to see some interviews or you want to see The F1 Show, there’ll be something for you there. We’ll be telling the story more than just on race weekends.’ So that’s how we were thinking about it.
What have you learned about what the appetite is for non-race programming? How has that changed over the course of the channel’s lifespan?
There’s a few ways to think about it. We look at viewing figures because they’re the most obvious metrics for us to go to but a really important part of our business, as a subscriber business, is value: do customers see value in having the ability to go to the channel or look it up in on demand and digital?
And I think a metric that’s moved us towards understanding how customers see value from having us always on is one thing. It’s probably fair to say that over the last five years more broadly – in sport and outside of sport – there has been a bit of a concentration in audiences towards the bigger, live events. So we see, perhaps, that some of the less committed or floating viewers are less likely to go to the non-live, but it’s still very important for the passionate and committed fans to demonstrate that value there.
So there’s a few things going on: you’ve got this concentration around big events but also this trend towards people wanting to go really deep into their passions. It kind of serves both purposes.
So we see, perhaps, that some of the less committed or floating viewers are less likely to go to the non-live programming
The other new development this year in terms of how the sport is broadcast internationally is F1 TV. It’s not launching here in the UK, where you’ve already been running a full year-round service, but what are some of the conversations you’ve had with Formula One about what to expect from this and how it will affect you?
It was conceived as part of the conversation for our new contract, so we were completely clear about what it was and what it wasn’t going to be. I think the important thing to appreciate is that this isn’t unique to Formula One. We partner with a number of sports that offer direct-to-consumer products that have a range of coverage: the NFL have their product, the US PGA Tour golf have their product.
We understand why sports are looking at those opportunities and they’re trying to understand more about their audiences and see what they’re passionate about and what they’re interested in. But they understand our position, our coverage, effectively what we’ve bought in the rights and what level of exclusivity we have. So we’re pretty clear and our partners are pretty clear, and it works well.
Down the line, with a sport, there could be an opportunity for us to think differently about whether we would partner on one of these products. Through our Sky Q platform we have an ability to offer these services. We’ve recently done deals with businesses such as Netflix and Spotify where, actually, we could effectively be bringing those partners within our ecosystem. So that’s something for down the line, but for the moment it’s not particularly a unique situation and it’s understood by all parties.
Sky Sports will consider working with OTT products in the future but does not see its current rights model changing anytime soon
What have you learned about the profile of the Formula One viewer? What impact has it had on your subscriptions data and has it been what you expected?
I think it has been broadly what we expected. In anticipation of the rights and understanding the value of the rights, we knew that the audience looked slightly different to a traditional sports audience. There was that aspect but there was also a kind of a ‘Formula One only’ fan that looked different from your ‘football, golf, cricket’ fan.
That was our expectation. That’s what we’ve seen. When we launched the channel you didn’t have to take a full Sky Sports subscription to get it – it was also part of an HD entitlement. I think in terms of specific demographics it’s slightly younger – certainly slightly younger than some of our sports – but not hugely different. It’s also male and upmarket.
So it was kind of as we expected and the opportunity – as with all of our sports – is really to broaden that appeal and broaden the spectrum, and broaden our audiences. And we do that ourselves through offering different ways to interact with the sport and also in thinking about how we cover sports.
Would you categorise the Formula One fan differently from the broader motorsport fan?
Again, in anticipation, we used to talk about ‘two wheels’ and ‘four wheels’ fans. I don’t think we’ve got a lot of experience with the two-wheel fan because it’s been a long time since we were deep into that space. So I think without knowing what the Sky Sports fan would look like for those sports it’s probably difficult to say. People in the industry would probably give you a view and probably suggest that there was quite a big difference.
The challenge for sport, actually, is to not be too narrowly focused. There may be some differences but the reality is that they don’t look fundamentally different so that’s probably quite an important thing for people to consider. Obviously you need to be respectful, you need to understand the audience, you need to understand what they’re looking for, but one of them is not suddenly going to be 70 per cent female versus 30 per cent female or 40 per cent under-35. That’s the kind of thing where you’d say, ‘Wow, there’s a big difference!’ I think sports, generally, tend to be, give or take, in the same space.
How much of an impact did what you did with Formula One have on your decision to roll out single-sport channels for other sports?
Probably, in hindsight, a bigger effect than we perhaps realised. It was 2012 when we launched the channel. When we got the rights, it wasn’t specifically with a view to launch the channel – we didn’t necessarily have that intention. We were thinking about a few things and playing around with some opportunities. We were thinking that this was effectively 20 weekends but that with all the other things we wanted to do with the sport, that was actually going to be quite challenging to fit into our existing line-up.
We were also talking to the commercial teams about how we were going to be selling this product to customers. And that’s when we came up with this idea of the channel, and it was refreshing to have that blank piece of paper. The look of the channel was synonymous with the sport, as was how we approached it on digital. It looked like Formula One as opposed to just looking like a Sky Sports offering. That was good and it was well received.
Quickly, we got a sense of this additional value that we were creating from having this destination. We did a few other ‘channel takeovers’ – a Ryder Cup channel, an Ashes channel, Cricket World Cup, and other examples – where we effectively grouped all the content on to one channel, we rebranded, we changed the look and it lasted beyond the life of the event itself. And we were hearing from customers that they got more value out of an event from having this destination, having this clarity.
Sky Movies have done the same with Disney, with Bond, with all sorts of things – they’re big fans and, again, they see exactly the same pattern. The same films offered on a destination are getting higher ratings than they would be normally. Again, it is quite a complicated world for customers and where you’re offering this guarantee and this clarity, that feels quite comforting and quite helpful.
We got a sense of this additional value that we were creating from having Sky Sports F1. We were hearing from customers that they got more value out of an event from having this destination