Subscription Case – Formula One

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By Niels Vestergaard

In this article series, I try my best to find unique stories and original perspectives on the subscription economy. And a novel interest of mine sparked the idea for an unexpected episode of Subscription Case.

Before the launch of the Netflix series “Drive to Survive”, I, like many others, had little to no interest in Formula 1. I remember it running in the background of my childhood home, but never once had I sat down to spectate a Grand Prix. It seemed the sport was intangible; I didn’t know any of the drivers and it seemed like a glorified pastime for billionaires racing around circuits all over the world.

However, this perception quickly changed when I sat down to watch the instant hit documentary on Netflix. I was introduced to the drama, the difficulties, and the many aspects of the sport that I had never even begun to understand.

As you might know, the series was a result of a new marketing strategy, following Liberty Media’s acquisition of the Formula 1 brand in 2017. It was time to introduce the sport to the next generation and what better way to do that than to meet the millennials on their favourite streaming platform?

Although I’d love to, we’re not going to talk about marketing strategies today, though I recommend watching this video if you’re interested in the strategy change from Liberty Media.

Formula One is now an incredible subscription product

Today, I’d like to talk about the streaming service and app experience that Formula One has created. What was once reserved for expensive sports channels, is now all available for Formula 1 fans for a monthly fee of $14 dollars. In addition to watching training, qualifying, and the race every weekend, the app offers incredible amounts of content. And that is the main subscription metric in today’s article.

Why content is king

The problem that Formula One was facing in 2017, was that even though everyone knew about Formula One, outsiders didn’t really understand it. There was too much lingo, complicated point systems, and rules to understand.  This was the motivation behind the Drive To Survive series, but more importantly, it became the motivation for a whole new way of experiencing races.

The Formula One application now offers so much more than just live streaming weekend events. And this is because Liberty Media realized that to grab the attention of a younger generation, you need to be first with content. Lots and lots of content.

This is why the Formula One app offers live streaming of events, access to onboard cameras and team radios, replays, highlights, live leaderboard data, driver maps, tire usage history and to top it off – access to an archive of historic race broadcasts, dating all the way back to 1981.

As subscription companies, what can we learn from the Formula One app? Let’s dive in:

Customer success

The first objective for Liberty Media was to educate subscribers on the product they receive. Much like many B2B companies spend hours introducing new customers to the benefits and features of their service, ensuring that new fans understand the sport is priority number one for Formula One.

The first step was introducing the Netflix series, which quickly introduces the drama and intrigue, as well as the purpose of training and qualifying. Once initial interest has been sparked, you are ready to continue the journey in the Formula One app.

Customer Success is also the reason that you can watch historic Grand Prix’s dating back to 1981. To understand the history of the sport and to educate yourself on how the sport has evolved. You can do the same with the leaderboards, onboard cameras, and countless articles available in the app.

Social media

The power of social media can be unlocked in several different ways. When you’re marketing an event, especially a recurring one, you can use social media to keep your subscribers engaged between events.

This is what Liberty Media did with Formula One, providing A LOT of content on Instagram, TikTok, Facebook, and so on.

Young consumers don’t watch a lot of flow TV. Or Live TV in general. So, Formula One understands that you can’t expect millennials to tune in live every weekend – this is simply not the way this generation consumes content. By packaging content from the weekend in short TikTok clips, Youtube shorts and team posts on Instagram allows the younger target group to consume content the way they are used to – quickly, and without strings attached.

And who knows, maybe the TikTok clip will be enough to spark an interest and sign up for a Formula One App subscription. Or at least, talk your parents into one.

Subscribing to a passion

Based on the above, I’d like to present a hypothesis. I believe we will see a consolidation in the experience economy, moving into subscriptions. Much like Disney+ and HBO Max have been busy re-claiming their content from competitors, to create exclusive streaming experiences, I believe that fan-based experiences like Formula One and other sports, will increasingly become novel and exclusive subscription offers.

Partnerships with media companies are complicated and it entails a loss of revenue. What if you could own all of your content yourself? Wouldn’t that present a more interesting revenue stream from broadcasting? And why would I need a TV channel, when I can stream the content via a Chromecast or an Apple TV?

Here, I’m especially thinking about football clubs. They usually earn money from ticket sales, merchandise, and broadcasting – actually, almost 45% of the income of Premier League clubs comes from Broadcasting Fees. But what if the Premier League was not reliant on broadcasting partners, and were able to offer to stream directly to subscribers just as Formula One does?

Reversely, there is also a consumer benefit – The ability to subscribe to your passion, whether it be F1 racing, cycling, soccer, or Yousician, the future of consumption is within subscriptions. And these passion-based subscriptions have only just begun to reach the surface.

Just as the tech-revolution taught us how to simplify complicated markets (Like Netflix did with movies, Spotify did with music and Amazon did with E-commerce), the development of a ‘market for passions’ is on the rise. And I believe Liberty Media is a first-mover of this development.

I might be wrong and I’m not saying this is a prophecy. But with knowledge of companies like Formula One, Yousician, Maserclass, Skillshare and the like, it seems there is space for more passion subscriptions out there. So take your pick, and you might end up making more than a decent living from your passion project.