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The deal that changes F1 forever

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The deal that changes F1 forever
Feb 23, 2012, 1:07 PM

"It's the most significant moment for F1 since the advent of satellites," says Eddie Baker, the man responsible for broadcasting F1 TV and data aro...

"It's the most significant moment for F1 since the advent of satellites," says Eddie Baker, the man responsible for broadcasting F1 TV and data around the world.

Today in London, F1's commercial boss Bernie Ecclestone unveiled a deal which will transform the way live F1 races are broadcast and all forms of digital content are consumed.

It's the key which opens up a door onto a new era for F1. Satellite TV revolutionised the sport in the late 1970s, by making it possible for millions of fans to watch races live around the world. This was Ecclestone's first revolution, providing the platform which made F1 a global sport, raising billions in revenues.

This long-term deal with Tata Communications, providing fixed line connectivity, opens the door for endless possibilities, way beyond what satellites can do, including broadcasting F1 on the internet, for interactivity between audience and the broadcaster at the circuit.

Tata has the largest network of undersea cables in the world and using MPLS technology it's very fast and cost effective compared to previous offerings.

The deal begins with Tata setting up fixed line connectivity at all the 20 Grands Prix for FOM to send its data, such as track maps. The capacity that FOM will start out with is ten times what is currently available. But they have proved out the model to 100x what's currently available, so within a few years it will be the means by which the world feed TV pictures are broadcast, as there are no delays unlike satellite.

"Formula 1 wants to transform the way it broadcasts the races and we can and will be a big part of it," said Vinod Kumar, CEO of Tata Communications.

It will also handle video playouts by all the broadcasters on site, all the communications by the media. It brings a standardisation to the means of delivery of content from F1 races. Basically it connects F1 to the world in a completely new way.

It increases the amount of connectivity time, as it's always on, unlike a satellite which is on for a matter of hours and it's bi-directional, which means it allows the audience to interact with the sport, rather than sit back and consume. It means the sport can have individual relationships with fans, can supply content on a global and even individual basis, looking well down the line.

It will also greatly reduce the tonnage of equipment that FOM TV sends around the world as images can be sent back instantly and processed at the FOM broadcast centre in the UK.

I put it to Baker that Ecclestone is renowned for being suspicious of the internet and has been accused of missing opportunities as a result. According to Baker this deal opens the door to endless possibilities,

"It gives him the ability to be able to do whatever rights deals he feels are right without limitations," said Baker. "That means he can assess every opportunity, he can react to every opportunity, he can move with the times in perhaps a way that we were not able to do in the past."

Ecclestone himself at the launch quipped that he'd not done a deal like this previously because, "I'm getting old! ". But there's no doubt that this is a complete game changer for the sport and the way fans receive it. Many will fear that it spells the end of F1 on free to air TV. But their businesses are under threat anyway. As traditional broadcasters like ITV and BBC in the UK and TF1 in France struggle with the changing media model and the ability to afford massive rights deals, F1 will have to look in future to new models. Clearly pay TV deals like SKY TV are one way of doing it, but they speak to small audiences. To maintain its mass appeal live paid streaming on the Internet is another option, as it sponsor funded mass market streaming in specific countries. F1, like any business, needs to find revenue and audience growth and this tool enables them to explore all the options.

Whether he's the man still doing the deals five years from now when this technology hits its stride remains to be seen. But it's a deal F1 needed to do and it's now well set for the future.

Of course this makes F1 more valuable as a business and more attractive to potential bidders, should Ecclestone and CVC wish to sell the commercial rights at some point soon.
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Tags innovation