To be an IndyCar fan is to get used to the fact that the Indianapolis 500 is the HUGE fish in the small IndyCar pond. So much so that for many people, the month of May and the Indy 500 are the entire IndyCar series. To be an IndyCar fan is to hear fans of the 500 expound on its virtues with admirable passion all year.
I can finally confess that for a long time as someone who lives eight hours from Indianapolis these facts grated on me. Those of us who attend one or more of the dozen-ish non-Indy 500 races can feel like Children of a Lesser God .. er.. Event. HUGE THINGS PLANED FOR INDY 500! Well, what about us? Table scraps.
Jealousy and envy are as seductive as they are unsightly. So, Confession II: I fell into the trap of resenting all the focus put on the Indy 500 while the Iowa Speedway race got — at least in my opinion — cursory attention. Corollary: I believe that this phenomenon has contributed to the demise of many an IndyCar focused racing blog based outside driving distance of IMS, but … I digress.
1) You can argue very convincingly that a lot of the cash the Indy 500 gins up — whether generated at the track or through the TV ratings the race gets — makes a lot of the non-Indy races possible.
2) You can further argue that the type of stuff that happens at IMS would not be cost-effective outside Indianapolis due to the relatively low fan numbers out here, so pining for it to be offered is like pining for IndyCar to lose money.
3) Therefore, if you are a fan of a race outside of IMS (as I am of the race at Iowa Speedway) it’s in your best interest to hope that the Indy 500 generates a SHIT LOAD of money for IndyCar, because the more money races at IMS make the better the chances of your race continuing.
Numbers 1 through 3 above are based in reality. I’m a big fan of reality. SURE, it would be cool if IndyCar put money into the non-Indy 500 races, because it seems clear that the biggest potential for growth is among fans outside of driving distance to Indianapolis. But, again, reality … IndyCar doesn’t have the money to put into improving every race with, say, a HUGE fan zone and hauler parade and festival of driver appearances and … dare we hope … a ZIP LINE (Sarcasm! For a while there the inclusion of a ZIP LINE was seen as a savior of any event). Plus, who are we kidding, 192 people would show up to participate in those events outside IMS.
Cue the chicken and egg. It takes money to make money. IndyCar doesn’t have money. SO they need to — to use the coarsest term — milk the IMS functions for all they can get. It's just business. For us fans out here in the IndyCar hinterland there’s choice: A) be envious of all the excitement and buzz and big doings at IMS or B) be glad that IMS exists because No IMS, No IndyCar.
So I’ve changed my tune here, big time. I’m going with Option B. (I'm being serious here. I realize it is hard to tell sometimes.) In part because of my effort to make 2014 a “don’t worry, be happy” year. Expanding the types of racing I consume beyond IndyCar is part of that same “be happy” effort. Hey, why stress it? Why rail against the machine? Go with the flow on such minor (in the grand scope of life) matters. So I’ve gone from jealousy that all the new stuff and fan focus seems limited to events inside the Indianapolis Motor Speedway to gratitude that people are willing to spend money there. Seriously. No sarcasm!
That brings us to the Mark Miles Great Monetization Project. Mark Miles, the IMS/IndyCar CEO (in reality if not technically in title), took a look at IMS and said (seemingly) “this deal could generate a LOT more income than it is generating.” And, I hasten to add, I would do the same thing if I were in his shoes. Upon my first visit to IMS in 2004 I was incredulous. “All this is used just ONCE a year?” I thought. (Not sure if the NASCAR race was going on at IMS by then or not. If it was, I was oblivious to it.)
We live in a market-driven democracy, and compared to other A-Level events and venues, IMS/Indy 500 was leaving a whole lot of potential revenue on the table. Market-Driven Democracy 101: charge what the market will bear. (More on that in a minute.)
The market could clearly bear to pay more. Hey, don’t yell at me. Yell at the free-market system.
SO, Miles launched into “monetizing” (which means to use something of value [more elements of the IMS experience] as a source of [more] profit). Miles set about charging what the market will bear for stuff IMS already sells, charging for stuff people will pay for that maybe they gave away for free (parking) and finding new products to offer people (new events, glamping):
- He established a road race for early in the month.
- He is trying to tweak up the qualifying format to get more people to show up at the track and in front of their TVs.
- Raised some parking fees.
- Raised some ticket prices and/or changed the pricing structure.
- Offering “glamping” which I am reliably informed is “glamorous camping.”
- Most recently making a deal with a food and beverage provider to run all of IMS’s concession stands.
Sidebar: on the point of the concessions … bravo. I’ve always been hugely underwhelmed by the food offerings at IMS, most especially compared other A-Level events. The Sacred Tenderloin notwithstanding, I thought the food at IMS was very very blah. Wells Fargo Arena in downtown Des Moines offered more variety, from what I could tell. Admittedly I didn’t check EVERY concession stand at IMS, because I just won’t work that hard to buy your food when I’ve already paid $90 to get in. Concessions can only go up from where they are. And people WILL pay for quality items. I‘m not saying get rid of the (relatively) cheap standard items, like hamburgers and hot dogs, etc. I’m saying add some higher value stuff, like better food and a MUCH wider selection of beer.
Then, maybe, MARKET the availability of said premium items. Make them easy for customers to know about and find in the cavernous IMS. I’ll pay $7 for a 12-ounce craft-ish beer, but only if I am aware that it is for sale somewhere.
Now, Mr. Miles (since I know you are reading this) we need to talk about the Sacred Cooler policy. THAT is a crap ton of profit you are leaving on the table.
The cooler rule brings up the final thought. If Market-Driven Democracy 101 is “charge what the market will bear,” then eventually you’ll reach the limit of what it will bear. So the question is how much is too much? If you ditch the cooler policy, for example, will people revolt and not show up? Or, will they complain loudly and vow to stop coming … and then keep coming anyway?
Another sidebar: NASCAR TV viewers complain every race about the number of commercials … yet based on TV ratings the vast majority continues to watch. Clearly the market will bear the level of commercials included in a NASCAR broadcast.
Many have said one of the reasons they show up is because IMS was special in that it was used only once a year (OK, twice since the NASCAR race started there). By using it again for a road race does that make it less special and drive off some customers, thereby hurting overall revenue? There are about a million nuances at play here. It’s kind of high-stakes market poker and it’s been fascinating to watch it play out.
A good way to gauge the current mood is to check how the Indy 500 Devotees (and I use that term with no judgment or scorn) react to changes. Check the blogs. Most of them are ardent fans of the 500. I see at least a little bridling among some of the hardest-core Indy 500 fans. At the end of the day, I don’t think any of them will stay away. MAYBE if the cooler policy goes away. That would be a big test of how much the market will bear. For some, I think it would take a 100% ticket fee hike AND no coolers to driven them off. For others, the only straw that breaks the camel’s back would be to change the Indy 500 to a stock car race.
Like every good business leader, CEO Miles is Monetizing with one eye on the customer reaction. Again, rather than be jealous or pissy, as someone who works in marketing I’m watching it with fascination. And, on behalf of all of us outside driving distance of IMS, I have new appreciation for the Indy 500 fans’ continuing support.