Broadcasters in India are not offering the value we believe our property is worth: Ian Holmes, F1

The 2023 Formula 1 season kicks off this weekend with the Bahrain Grand Prix. The big change this year for Indian viewers is that the sport won’t be available on television (yet) as the broadcast partnership with Star Sports came to an end last season and so far no deal has been signed.

So, to make the sport available to the Indian viewer, F1 TV was announced in India last month.

We caught up with Ian Holmes, director – media rights and content creation, Formula 1, to learn more about the lack of a broadcast deal, F1 TV and the pricing, the importance of the Indian market, and a lot more…

Edited excerpts:

What made this the ideal time to launch F1 TV Pro in India? 

Our previous agreement with Star expired at the end of last season. This agreement was part of a broader agreement we had with Fox in Asia. Fox closed down, but we extended with Star in India for the duration of the Fox contract which came to an end last year.

Towards the latter part of last year, we got thinking and looking into our options.

We were always keen to see which Asian territories we could launch F1 TV in. Under the old Fox/Star contract we couldn’t do that. So when the agreement ended an opportunity came up for us to launch it.

We looked at the more traditional channels and platforms. Star was one of them. We had discussions with Zee and one or two others too. I want to be candid about this – we felt that the valuation of many of those parties placed on our property wasn’t similar to what we felt it was worth.

Understandably a lot of broadcasters have a preoccupation with one of my favourite sports – cricket. They throw a lot of money into the sport.

We looked at the market and connectivity. I’m not throwing a parallel between F1 and cricket, but we felt it was fascinating to see the valuation of the digital rights of the IPL versus the traditional rights.

People are used to consuming sports digitally. That factored into our thinking while we were looking at different options and thought it was a good time to push our product into the Indian market.

There's been a lot of discussion in India about media rights. There have been murmurs of a TV channel, specifically one from Viacom18 looking to bag the rights ahead of the start of the season. Any truth in this?

I can’t comment on that level of detail. Viacom18 would be one of many different parties that we have had discussions with.

Discussions are still open and we are open-minded of a more traditional deal coming into place but we won’t look at it instead of F1 TV. 

We are committed to doing this. I’m not interested in doing something super last minute unless it’s worth it.

We still have an approach that interests me, on how we can use F1 TV Pro alongside an Indian digital offering, whether it’s through an authentication bundle or one with a telco.

Could that get tricky? A lot of the Indian digital offerings or telco providers operate services that are much cheaper than F1 TV Pro…

Ultimately, it’s complicated. One of the challenges we’re facing with F1 TV is how we can market its availability. 

Having a local partner of some sort is one way of tackling that problem. That’s an ongoing operational and marketing challenge. We know the product is good and it works, and we know there are plenty of F1 fans in the market. They are sophisticated and passionate and we also know there are some new fans. 

We don’t have millions of dollars to spend to promote the offering and so we have to be agile and one way is by having local partnerships.

How many markets in Asia does F1 TV already operate in? Where would India be in terms of importance?

If I look at the previous Fox footprint, India is the only market where F1 TV Pro will be available this year. We wanted to prioritise our launch and we felt that India offered the best opportunity.

It’s a matter of the market which presents plenty of challenges. We want to be able to focus on markets. Some of the deals we did within some of these markets in Asia don’t allow us to launch it either.

It’s a combination of not being able to be a part of some markets along with prioritising time and attention to this one which made India a big market.

We have many new markets for F1 TV this year, but India is the biggest. It’s not the biggest in terms of population alone, but it’s the most important new market we’re launching in. I’m fascinated with how we go because we don’t have the traditional license agreement at this moment. So it is right up there in terms of importance and it’s not an experimental market.

How many users have you got in India so far? What’s your target for the end of the year?

I’m getting data daily but I’m trying to ignore it for now. We don’t share numbers. I don’t know whether it’s helpful to say that it’s above our expectations, but it's good for us. 

We’ve done a lot of modelling for our expectations though.

I think it comes back to your point of pricing. There is a sweet spot and we looked at other services like Amazon Prime, Netflix and local offerings too. We came up with what we thought was the most sensible price. It wasn’t my intention to offer it super cheap.

Did you consider going the ads route or introducing an ads tier for a market like India? Ads won’t be served on F1 TV Pro, right?

No, ads won’t be running at this point and it’s not something we’re looking to introduce right now. Like most OTT operators, you do look at different tiers and along with many other offerings, ads could be something to think about for the future.

But you’re not discounting it completely as Netflix had before its U-turn?

The correct answer for this is that it’s not something we have now and it’s not something we’re planning to do soon (this year). 

It’s something that could be introduced in the future though.

We got to look at the technical infrastructure of our product and at the moment it’s essentially the same product all over the world. When you introduce something in one market it could get complicated to run.

You've been with F1 and the media rights division since 2001. Can you list three of the biggest changes in the broadcast space?

Anyone who works in this industry is lucky because it’s a very rapidly evolving and changing business. Ten years ago, the likes of Netflix and streaming didn’t exist.

We were purposefully late in moving from traditional, free-to-air television to pay TV. We were probably one of the last major sports to make that move and that represented the opportunity to generate significant uplifts in commercial fees. There was a lot of consideration in terms of the impact on the audience. The old argument between free and pay was ongoing for a long time.

That was a big change.

Then, in terms of our production, it’s also a rapidly evolving product. It’s one of those things which has seen lots and lots of small changes over the years. It’s about tweaking graphics rather than a radical overhaul from one year to another. The other big change in terms of the production point-of-view is that we do it all on our own now. Earlier, our British rights holder would do the production for the Silverstone Grand Prix, the French one would do the French Grand Prix and so on. This was consistent to a point, but not consistent enough and eventually, we relieved every one of those local broadcasters with that responsibility and took it on ourselves at a very considerable cost. This gave us complete control over the product and this made it as good as it could be.

Then, most recently with Liberty acquiring the ownership of Formula 1, it’s a big cultural and business change. For me, what we did before was pretty good but towards the tail end of the previous ownership, we should have been pursuing things which were then pursued under Liberty. We as an organisation have undergone a massive change. What we do commercially and editorially with F1 TV is very different now.

Five years ago we did our first series of Drive to Survive. That’s not something we would have done under our old ownership.