With the cost of streaming Formula 1 races increasing for Indian fans this year, sans F1 TV, some industry players opined that although the sport has a niche and loyal set of audiences, but the increased subscription cost is definitely going to have a negative impact on viewership.
However, other industry players also stated that the OTT platform will be able to offer better viewing experience compared to traditional TV broadcast.
Streaming Formula 1 got costlier for Indian fans as the sport will no longer be televised on Star Sports or Disney+Hotstar. The only available platform for Indian viewers to access F1 races will be through F1 TV, which offers two plans: F1 TV Access and F1 TV Pro. F1 TV Access is priced at $19.99 per year or Rs 1650, while F1 TV Pro is priced at $29.99 per year or Rs 2,475.
Despite being a niche sport, F1 has a loyal fan base in India
Shashank Srivastava, Executive Director – Sales and Marketing at Maruti Suzuki, said that F1 is a very niche sport and appeals to a selected set of avid motor sport lovers. As per various media updates, India is projected to be Formula1’s fifth largest market, with approximately 30 million fan base. Despite being within the top-five fan bases, India still fails to make the list of the top 20 countries when ranked by television viewership.
“This indicates that the television viewership of F1 in India is a huge untapped market in the present day. The cumulative reach of F1 in a year (23 races) is sub 5 million compared to other sports India and with introduction of F1 TV OTT in India, while it may be sign of F1 considering India as an important market but with increase in steep cost of subscription, its likely to impact existing viewership and reach of the sport in India in near future and pose challenges to growth in future. However, a percentage of the core audience will definitely sign up if it’s the only place where they can catch F1 live,” he added.
In view of Simanta Mahanta, Senior Vice-President – Investment and Partnerships, Initiative India, out of all the sports that are watched in India, car/bike racing remains a relatively niche one, with a viewership base of less than 50 million in 2022. F1 is a big segment of this sport. However, it can be assumed that car/bike racing has a loyal fan base, who will likely switch to whatever platform is available to watch their favourite races, as per Mahanta.
Though F1 appeals to a very niche audience, Indian viewers are price (subscription cost) sensitive and a three-fold increase in subscription cost is definitely steep, Maruti Suzuki’s Srivastava stated.
In view of Karan Taurani, Senior Analyst at Elara Capital, the pricing is really high since it will not be broadcasted on TV and only be streamed on the platform and it will have a negative impact in terms of viewership.
“F1 in terms of penetration, reach and viewers is nowhere close to cricket and it is a very small sub-segment of it, so these kinds of things will have a negative impact in terms of incremental growth for these properties. The niche audience is going to subscribe to it but within that universe also you will see some customers moving away or probably not wanting to subscribe to it,” Taurani said.
“This is actually good for US, UK or other markets where F1 is an established sport and they have a sizable contribution in terms of the overall sports market but for a country like India, this is definitely bad news. The market is very huge with big opportunities and people wanting to explore other sports apart from cricket,” he added.
Maruti Suzuki’s Srivastava added, “Telecast of sport on Star Sports and later on Disney+Hotstar OTT helped to increase the fan base with ease of access to live races. While F1 TV is expected to offer additional content around F1, which may enthuse some of the existing viewers, but higher subscription cost paired with limited reach of OTT as platform compared to TV, may prove to be counterproductive with respect to tapping the potential fan base in India, which only time will tell.”
On the other hand, Initiative India’s Mahanta said that as compared to other car/bike racing events, F1 typically attracts a larger viewership and boasts a loyal fan base. Therefore, F1 TV has the potential to capture this audience.
Opportunities for branding and advertising during F1
“From a branding perspective it’s a good platform to reach out to a very niche set of audience and can be leveraged from the perspective of building a premium imagery for the brand considering the premium imagery of sport itself. For auto, brand association with F1 as advertiser is expected to have positive rub-off on brand’s imagery with respect to performance and technology. However, from MSIL association framework perspective, the niche reach of the sports might not result in the best ROI vis-a-vis the investments,” Maruti Suzuki’s Srivastava said.
As per Elara Capital’s Taurani, F1 racing is more popular in countries where these races take place and in India it is only going to pick up once we start having the races in India.
“It is very similar to FIFA as people don't follow it on a very large scale because we don't have a team competing at the major events. So, from an opportunity standpoint these kinds of sports need to be really good or unless they don't have Indian players or Indian drivers or races or players, these sports will not pick up,” he added.
According to Harish Iyer, EVP, Media and Investment, Interactive Avenues (A Reprise Network Company and the digital arm of Mediabrands India), “India is a crucial market for F1 due to its strong mobile market and the launch of F1 TV Pro opens up possibilities for content customisation, which may take some time to convert passionate fans into subscribing customers. Nonetheless, F1's growing popularity among the younger mobile-first audience offers opportunities for brands to associate with the sport in a subtle manner as consumers have started subscribing for content that interests them,” he added.
F1 TV will be able to offer better viewing experience compared to traditional TV broadcast
As per Maruti Suzuki’s Srivastava, F1 TV will be able to offer a better viewing experience compared to the traditional TV broadcast, for the avid motorsport enthusiasts the viewing experience would be much better with in depth analysis, a more holistic viewing experience with different camera angles, subtitles, behind the camera team stories, driver details etc.
“However, how much of that would be of any interest to a casual viewer is a question to be asked and only time will tell if it will be able to generate additional viewership in India and whether a casual viewer or a new audience would be willing to subscribe at such a premium,” he added.
Initiative India’s Mahanta said, “Creating a dedicated platform for a specific event or type of sport is likely to enhance the viewer experience, particularly through the use of technology and other innovative measures.”
Maruti Suzuki’s Srivastava further added that F1 itself has a very niche audience in India and for other motorsports to thrive in the Indian market, the reach of F1 and the popularity of F1 has to grow first - which will create an opportunity for other motorsports as well.
“India is a huge market and there is a definite potential but the base has to be laid first and it would also help if the Indian consumer can have easier access to F1 and at a more personal and experiential level. The same has been initiated in India by the Red Bull team with David Coulthard arriving in India (Mumbai) for the Red Bull Showrun which is happening in India after 14 years and enthralled the packed audience. Such on-ground initiatives at regular intervals will help the sport gain popularity in India,” he added.
As per Initiative India’s Mahanta, despite witnessing year-on-year growth in overall sports viewership and investments, India's Motorsports industry remains a relatively small part of the overall picture.
With low viewership of sports event, media houses may not bid high volumes for rights
According to Mahanta, “In contrast to other countries, the Indian TV industry relies heavily on advertising revenue rather than subscription fees. As ad revenue is closely linked to viewership, sports events or properties that have the potential for high viewership also present the opportunity for higher ad revenue. Conversely, if a sports event has low viewership, media houses may not be able to bid high volumes for the broadcasting rights of that event.”
In view of Maruti Suzuki’s Srivastava, the Indian motorsport audience has limited access to the sport both on air and on-ground.
“As mentioned above, ease of access on both TV and OTT platforms along with on-ground events such as the Red Bull Showrun could be organised in India at more regular intervals, would definitely help in building loyalty for the sport. Such events would also open up avenues for Indian brands to have an association with F1,” he added.
According to Elara Capital’s Taurani, “Launching their own OTT platform for this may not get them that viewership that they would get via Star because it has got a far higher reach. What happens on platforms or to broadcasters like Star is that they have a huge customer base where a lot of cross selling of content also happens. Because this is coming directly on F1 TV, incremental growth will be stalled because only people who are core F1 fans are the customers will get hooked on to it.”
Furthermore, he went on to say that in terms of how they are planning to monetise it is not known but they will do it from the ad revenue perspective as well.
“They could have tied up with somebody else if not Disney Star, maybe with JioCinema or SonyLiv. India is a price sensitive market so they are not going to pay Rs 100 a month for just a single sports property. It's a very expensive property and don't be surprised if they face a decline in viewership in a country like India because of this. These models are not viable,” Taurani stated.
However, as per Interactive Avenues’s Iyer, F1 is seeing an expansion in fan demographic, particularly among younger audiences, and India is among the top countries with a fan base of approximately 33 million.
“In the past, F1 targeted older audiences, but now it caters to affluent younger audiences who enjoy watching the races and battles between drivers. Content like the Netflix documentary series 'Formula 1: Drive to Survive' play a significant role in recruiting new fans to the sport by showcasing the stories and emotions in F1,” he added.