US market offering a good start for F1’s race to go direct
Over the past few years, an increasing number of sports leagues have launched direct-to-consumer (D2C) services. They have varied from partially ad-funded (such as La Liga’s upcoming offer in Spain); to partnerships with channels and Facebook (such as the PGA Tour); to ad-free subscription-based services (such as Formula 1’s recently announced service). The USA has by far the most D2C sports services with most major leagues already offering an OTT service, including heavyweights such as NFL, NHL, MLB, NBA and WWE. Formula 1 is the latest sport to follow suit, with its service available in all countries worldwide (barring those—such as the UK, Spain, Italy—where exclusive rights have already been sold for the foreseeable future).
Generally, subscription OTT users skew younger, with the largest proportion falling in the 25-34 age range. As of Q1 2018 in the USA, over 67% of the subscription OTT respondents were under the age of 44. Formula 1’s fans skew significantly older across most markets, but in USA and Saudi Arabia, Formula 1 fans tend to be in the prime OTT demographic (over 58% are under the age of 44 in USA). However, Formula 1 remains a niche sport in these markets with just 6% of US and 11% of Saudi sports fans selecting it as a sport they enjoy watching (in markets where Formula 1 is popular, this rises to an average of 20%, but is even higher in countries like Spain and Italy ). As more sports become available OTT, it gives less popular leagues an opportunity to monetise markets where they are not mainstream enough to be attractive to a major broadcaster. We expect more leagues and events to follow the same route as Formula 1 over the next few years.