Sun, Surf, and CTV: Summer Marketing Has Returned
by Stephen Graveman
3 Min Read
What F1’s Rise in Popularity in the U.S. Tells Us About the Future of Live Sports on Connected TV
5 Min Read
It’s the day of the big race—snacks are ready and your friends and family sit around you. When it comes time for the event to start, you turn on your TV and click the remote to… your favorite streaming service?
For many, watching live sports is associated with traditional television networks—ESPN, ABC, NBC, TNT. So, why are some of the biggest names in Connected TV (CTV) positioning to bid for the exclusive media rights to broadcast Formula 1 (F1) in the U.S.? The landscape of live sports viewership is changing.
ESPN has owned the exclusive U.S. F1 media rights for the last five years and pays $5 million annually to do so. With the broadcasting contract up for renewal, F1 owner Liberty Media wants to raise the fee to $100 million per year. This may seem like a steep financial increase, but with F1 viewership in the U.S. up almost two-fold in the last year, the new price tag seems fitting.
“ESPN has been a great partner. They’ve got a very good deal because we’ve had a rise in popularity, and they’ve capitalized on that as well. Our hope is we’ll find a great partner going forward, which could be ESPN or could be somebody else. And it’s likely to be a much better price for us,” Liberty Media CEO Greg Maffei recently told CNBC.
Knowing that F1 viewership in the U.S. is at an all time high, some of the biggest names in streaming—Netflix and Amazon—are reportedly entering the competition for these exclusive rights. Should F1 land on Netflix, it will be the first programming of this kind for the streaming giant. That said, Netflix is already well acquainted with F1 and its fandom.
While F1 experienced global popularity for years, the sport struggled to gain momentum in the U.S. market. Since its beginnings, F1 has tried and failed multiple times to boost viewership in the States. Then, in 2017, F1 got help from an unexpected source—a docuseries. Netflix’s Formula 1: Drive to Survive may not offer drama in the form of public table flipping, high-profile tax evasion or multiple suitors competing for the same person, but, like many popular reality shows, it gives viewers a behind-the-scenes look into a world that the general public hadn’t been privy to. The show, which profiles and follows the “lead characters” of F1, provided some much-needed context to an American audience whose previous point of reference for racing was NASCAR.
Since the show debuted, F1 viewership numbers in the U.S. have skyrocketed. The 2022 Saudi Arabian Grand Prix is a prime example of this, experiencing its highest average number of viewers since 1995. While this increase could be attributed to a number of factors, the F1 organization acknowledged the part Drive to Survive has played. “I’m not going to deny that Netflix was very important in this market for the growth and awareness,” Formula One CEO Stefano Domenicali said.
F1’s revitalization in the U.S. market isn’t the only result of note from Drive to Survive. The show’s success reflects how powerful the original programming of Netflix can be. Despite not being typically associated with live athletic events, Netflix used its content creation model to influence a sport-focused cultural phenomenon in the U.S. Thanks to the show, viewers who were previously uninterested in racing or were outside F1’s core demographic, are now super fans. The effect this show had on audiences illustrates the extensive impact streaming platforms can have, even on topics outside of their usual scope.
A deal with Formula 1 could be the start of live sports for Netflix, but other streaming platforms have already invested in this type of programming. The widely-known Hulu + Live TV offering gives subscribers the option to watch sports in real time. Hulu isn’t alone on this front—as TechCrunch reported, “Apple recently made a deal to stream Major League Baseball and is bidding on NFL’s “Sunday Ticket.” Peacock also grabbed the exclusive rights to dozens of MLB games. Amazon Prime has exclusive streaming of NFL’s Thursday Night Football, as well as 21 New York Yankees games exclusively in the New York market. Disney and Warner Bros. Discovery already have a range of sports content.”
With Netflix’s primary competitors a few steps ahead, it would likely be wise for the streaming service to invest in live sports. Becoming F1’s broadcast partner could be exactly what Netflix needs to bounce back from its recent loss in subscribers.
People may still primarily be watching live sports on linear TV networks, but with more streaming services available to viewers, this is likely to shift soon. In addition, CTV usage continues to grow. A recent study by Leichtman Research Group found that 87% of U.S. households with a TV have at least one connected TV device, up from 80% in 2020. Advertisers won’t want to miss out on growing sports audiences watching on CTV, especially considering these insights from MNTN Research: