Sunday, March 13, 2011

NBC Missing the Boat, Taking IndyCar With It

NBC/Comcast hasn’t even yet aired a single race of the IndyCar Series since their merger, and yet they already seem committed to their first monumental mistake...
“Because of network TV contracts, live streaming video of IndyCar Series practice (outside of the Indianapolis 500), qualifying and races won’t be available this season.”

To say this development is shocking would be a lie; NBC is the same organization that thought it was a good idea to cut away from the 2010 Winter Olympics closing ceremonies so they could show the pilot episode for “The Marriage Ref.” A tactic that backfired, not only in tons of anger in social media but also negative big-media press, plummeting ratings and the show seemingly disappearing from air anyway.

Even as this decision to kill off ANY race related streaming in IndyCar goes, it’s not a new concept; we’ve seen this exact tactic before:

In 2008 at the Rolex 24 Hours of Daytona, SPEED committed itself to 16 hours of live race (including 30 min post/pre) coverage of the race. During the 9 race hours off of TV coverage, fans were able to log into Grand-Am’s website and access three live track cameras with audio simply picking up the track’s PA system. The cameras never moved, in fact their positionings were awful. It wasn’t anything you could actually watch, but die-hards and off-site media like me were able to stay up all night and hear a few developments be announced over the track PA.

When 2009 came around, it was gone, and it very quickly became evident why. Enter stage right is The Racer’s Group team, who had an epiphany, let’s bring a little attention to ourselves because SPEED focuses a bit much on the DP class and not our GTs. So to give a little something extra to their fans, they mounted a webcam in their pit-stall. It did not pan or zoom, it had no announcing and it was clearly just a $0 setup web-cam staring at their pit-box. The idea was that when it came time for pitting, fans could go to their site and watch them perform a pit-stop, nothing more. Only, the stream never lasted to the first pit-stop.

TRG (who kept fans up to date via a chat box) noted an ongoing struggle with SPEED who shut them down. SPEED cited that it interfered with broadcast rights (which it did). But in the agreement they came to, TRG would be allowed to go back live once the race was off the air… only it never did. SPEED actually instead made sure TRG never went live again, threatening legal action, even though SPEED wasn’t showing the race or any coverage at all during those 9 hours. All TRG could do was change it to a refreshable picture from the pit-cam. Thusly fans got NO INFORMATION about the race except from Grand-Am’s (much underrated) timing and scoring application.

Now it’s 2010, and TRG was still trying to be at the forefront of technology and fan-connectivity, so they devised an idea that shouldn’t go against SPEED’s broadcasting rights. TRG’s plan: set up a web-cam not showing the track in any way. This year instead, the webcam faced a table and 2 chairs with a white background showing their team logo. the video was crap, and the audio wasn't perfect either, and if it weren’t for hearing cars in the background you’d never know it was at a track. In one chair sat one of TRG’s PR reps on a headset, and all they did was answer questions in a fan chat box embedded in the page. It was nothing short of great fan interaction.

Occasionally they let fans know updates about the team like “we’re coming in to pit next lap” or “we’re in 6th place now” information that could already be garnered from timing and scoring or twitter or TV broadcasts. They’d occasionally pull TRG’s drivers into the 2nd seat and let them answer fan’s questions in real time. It was great, while it lasted; as once again there was a struggle with SPEED, who again cited broadcast rights even though TRG weren’t showing anything race related. After what one assumes was a pretty interesting debate, TRG and SPEED came to an agreement and TRG was allowed to go back live, but with 50 corporate logos of SPEED or TaxSlayer all over the white tarp backdrop. Because neither company had anything to do with TRG’s web-cam, all it did was gave SPEED more bad publicity with fans.

Now in 2011, SPEED has cut their broadcasting back by 2 hours, meaning they give fans even less coverage. TRG, meanwhile does the same awesome behind-the-pit webcam, bringing in drivers to talk directly with fans during the race, and in no way attempting to cover the on-track action, and they do it for the FULL 24 hours and it’s great.

In the end TRG has increased the amount of behind the scenes coverage they do each of the last 3 years, Twitter has boomed meaning fans can follow all the drivers, teams and media for real-time updates, JustinTV and many other illegal online streams have boomed, and things like GrabBagsports’ very own Blogathon give fans immediate information and analysis of 24 Hours of Daytona.

The way SPEED (and now NBC) act/react to new technology mediums, you’d think it’d be the death knell for the broadcasts… well apparently not:

In 2010: “In total, 2010 Rolex 24 viewership was up 22 percent over 2006,”

In 2011: “SPEED's coverage racked up some impressive TV viewership numbers, with an average of 443,000 viewers tuning in - a four percent increase from 2010.”

You can’t fault the IndyCar regime; most TV networks require the all-inclusive broadcast clause, in-fact give props to them for breaching the contract for the last 2 years to continue their online offering. But IndyCar better be trying to change NBC’s mind, because the world is changing and NBC clearly isn’t paying attention.

This Thursday/Friday will see millions (yes, millions) across the globe watching multitudes of college basketball online as the NCAA March Madness tournament begins. CBS is smart, rather than allowing the NCAA or illegal streams to take charge, they take care of this rebroadcasting themselves and they sell advertising for it.

In fact, here’s just a quick list of sports I can currently watch LIVE online (some free, some paid): National Football League, Major League Baseball, NCAA basketball, NCAA baseball, NCAA football, practically every professional soccer/futbol league in the world, professional rugby, the Olympics, NCAA track and field, The X Games, all events on the ATP Tennis World tour, PGA and LPGA Golf, and now the American LeMans Series.

There are some serious heavy hitters in there, and I bet you they aren’t worried about hurting Nielsen Rating’s points. Instead they’ve realized that they can capitalize on the advanced level of advertising and specified/reliable statistics the internet brings. They can tell advertises exactly how many people clicked/watched their ad (not hopeful estimating like Nielsen), they can tell exactly where the viewers are geographically, how long they watched for, what they watched, what they clicked, how they go to the stream, where they went after the stream and more.

By not jumping on the technology and continuing to do their own stream, IndyCar/NBC will not create a ratings boost; that’s just as silly as the RIAA’s thought that suing/killing Napster etc. would boost music album sales. Instead, international and non-Versus able fans will simply find their way to illegal streams. This means it’s now a lose-lose for broadcasters, not only do ratings not go up, but they also don’t reap any advertising revenue.

Why NBC/Versus/ESPN3(ABC) wouldn’t take the opportunity to sell more advertising to IndyCar fans is beyond me as a marketer. The cameras are already monitoring the track, there’s already a radio feed, so the only extra person to pay is the one combining those and sending the feed to the internet; and frankly advertising revenue should more than cover that.

CBS has been doing this for the basketball tournament for over 5 years now, ESPN is starting to throw any sport they have onto ESPN3 and yet their ratings rise every year on TV. Clearly online streaming is a net positive; not only for the bottom line, but in finding, converting and increasing the fan base.

As to the possibility Randy Bernard laid out for trying delayed online broadcasts...

At 1:11pm today, I found out via twitter and ESPN that Kurt Busch had been eliminated from the NHRA Gatornationals. Any opportunity for people to view this (outside of attending) won’t occur for more than 5 hours later on ESPN; and Kurt Busch, NASCAR and driver cross-over fans won’t be watching; we'll already be over it and NHRA loses potential eyeballs to convert into fans.

Sports are not scripted, people don’t watch to see how an ending was set to happen, they watch to see a contest bdecided at the moment it is being decided. It’s all about real-time action and results, it’s why we watch; its why there are 3+ 24-hour live news networks. Newspapers aren’t dying because people stopped needing news, it’s because we the consumer found a way to get news with the same accuracy quicker and within a more relative time-frame.

IndyCar fans have already tasted and feasted upon live real-time practice and qualifying and they know how great it tastes; they won’t go back to tape-delay; they’ll just go elsewhere.


Pat W said...

Good to get the take of someone who works within marketing. As someone who relies on internet coverage of the series to watch it live I'll be forced to use an illegal stream or not watch live.

If I can't watch live I will still locate a download somewhere but I won't be too fussed about catching up promptly, as you say I'd already know the result (being a racing geek I still want to see how it happened).

The web streaming had a lot of faults but it was better than some offerings, and so much better than not having anything at all. I seriously hope the deal can be renegotiated. Even if NBC/Comcast offer their own version it will not be available internationally, to my knowledge no network in the world does that.

Speaking domestically here in the UK, there is a Sky Sports player but you have to be a subscriber to their TV service to be able to use it. I wish Eurosport had the rights, their service doesn't have that restriction.

Pat W said...

By the way, I should make abundandtly clear if I haven't already, I want to use a streaming service on and I WOULD pay for it, for the right fee.

Crazy decision to let a TV network push them around in this way. Are online rights exclusive?

btw you sure about 'millions around the globe' watching NCAA? :)

Unknown said...

This decision is another example of motor racing and TV companies living in the past. Randy Bernard seemed to be the person to sort out Indycar but letting this happen is crazy.

For people like me who live on the other side of the Atlantic the choice is now to watch an illegal stream or find something else to do with my time instead. The idea of a tape delay just shows how out of touch with reality those people are. There will be a few people like Pat who will watch it but for me it is live or not at all.

I want to watch Indycar but maybe if Indycar doesn't want me to I should take the hint and do something else with my time instead. For a motor racing fan that would in many cases end up being Nascar. I am no Nascar fan and I am sure the last thing Indycar wants to do is drive more of audience to Nascar but that is precisely what is going to happen.

Killing the live stream is like going back to the 90s. The world has moved on but Indycar and NBC are still living in the past.

Allen Wedge said...

Thanks Pat, I'm right there with you, I'd pay to watch practice/qualifying streaming, my biggest pet peeve of any sport is "tape-delay."

I think the biggest issue here is that streaming existed and its being taken away. I honestly don't know of any other sport who has done that. Many go from free to paid, but none abandon it.

As for the "millions" yeah I'm sure on that number :), though obviously 90% of that base is in the U.S. and much of the global part is U.S. displaced people.

Leigh O'Gorman said...

I ranted the other day too. A deeply silly move.

Christopher Leone said...

I'm going to say what I said before: I don't think NBC/Comcast would have made this decision if they weren't planning on doing something with the streaming rights themselves. Keep in mind that neither has a bigtime streaming sports site of their own, and with this merger, both are probably looking to build NBC Sports into an ESPN rival. It only makes sense that they would then reclaim all of their assets in order to be better prepared for when that theoretical (but altogether necessary) streaming network is established.

This is a TV decision, folks. It signifies that the broadcast company has an interest in the property. In fact, there are few instances where a league is able to stream its own games - I think the MLB is the exception to the rule, and that's partially because there are so many of them. I guarantee you that the privilege we enjoyed - free streaming of race broadcasts - contributes to a bush-league perception. The way the system worked had to go, as much as we all loved it.

And Pat: ESPN3 is available internationally, as I understand it, and in fact available in every country with an IndyCar race but Japan.

Allen Wedge said...

Hey Chris, thanks for the insights. A few notes worthwhile:

1 - NBC already does live streaming for over 100+ Olympic events.

2 - I agree fans were spoiled with free streaming, but I part of the point I was making that I might not have clarified. Is not that NBC needs to offer this stuff for free, but that they need to offer something; pay per view or free inferior online product compared to TV with sold ad space.

I listed the sports in the article but heres a little more complete one of all the many sports that I can watch online:

-MLB (paid for any game / some free on ESPN3)
-NFL (paid)
-NBA (some free on ESPN3)
-NCAA basketball (free on ESPN3, paid for all other games in D-I)
-NCAA baseball (paid, I can watch all D-I teams games)
-NCAA football (free on ESPN3)
-NCAA softball (free on ESPN3)
-NCAA Wrestling (free)
-NCAA Hockey (paid / select games free)
-Olympics (free)
-ATP Tennis (everything free except champ matches)
-PGA & LPGA Tour (free until final day then TV only)
-American LeMans Series (free)
-La Liga (free / soccer)
-German Bundesliga (free / soccer)
-Eredivisie (free / soccer)
-Serie A (free / soccer)
-Rugby (free)
-FIFA World Cup (free)
-FIFA U20 and U17 (free)
-MLS (free)
-X-Games (free)
-U.S. High School basketball & football (select games free)
-NCAA Lacrosse (free)
-Major League Lacrosse (free)
-KHL (free / hockey)
-Race of Champions (paid)

The Speedgeek said...

I just think that it's crazy that they're taking away the free service that they had last year and are replacing it with...nothing. I could understand 100% if they were going to charge for the streaming service (say, $24.95 per year, which I would probably pay, even though I only watch 6-8 non-televised sessions per year), but they didn't say they were going to introduce something in place of the old system, just that streaming isn't going to be done anymore. Like Allen points out, they're missing out on two revenue streams: 1) from subscriptions (what I mentioned a couple sentences ago) and 2) ad sales for the online content. It really is like taking a step 5 years backwards to when nobody had a web connection fast enough for streming video. Just crazy.

Unknown said...

I disagree with Christopher than the free live streaming contributed to any bush league impression. Quite the opposite as far as I am concerned. It created the impression of an organisation that was looking to the future rather than the Bernie Ecclestone-F1 model of hanging on to the past by his finger nails.

One point I am not clear on. Do people in the USA pay for their Indycar coverage? I assumed it was free to air and that the Indycar sponsors would insist on that. If TV is free to air why should anyone pay for a streaming service? Run ads on the stream just like TV. As has been said already in many ways stream viewers are more valuable advertisers than TV viewers.

Allen Wedge said...

Hi Steven, In the U.S. the IndyCar coverage is pslit between two channels. ABC (a free via antenna channel) airs 5 races including the Indy 500. the remaining 12 races are aired on a channel called Versus which has now merged with "NBC" (Versus is on a paid subscription tier of channels for those in the U.S.)

As you stipulate, they could just re-air the exact same broadcast online and people still see the ads. or they could do online-only ads and get a new revenue stream without having to produce any new content.

Brian McKay said...

Wedge, I'm reading your blog now! (hyperlinked by your name on Oilpressure). I don't follow any non-racing sports (really!), but I'm sure thatI'll enjoy your blog during the month of May. Chhers.