New sheriff! He's in town. Making moves. Changing stuff. Doing things.
Ever since Comcast (owner of VERSUS) bought NBC Universal IndyCar faithful have been waiting, waiting, waiting ... hoping, hoping, hoping it meant big, positive things for IndyCar on TV.
Maybe. Maybe not. We shall see.
Immediately Jamie Davis, president of versus for 2 1/2 years was out. Don't weep too hard for Jamie because I'm sure he got some handsome parting gifts (i.e. a huge bale of severance cash).
Jon Litner, former Comcast Sports Group President was now in as VERSUS president. Comcast also brought in other big hitters to head up the various parts of their new sports empire. Mark Lazarus, a 19-year cable industry veteran and former Turner Entertainment Group president, was named President, NBC Sports Cable Group.
Clearly (to me) the new sheriff is a of a serious sort. Comcast didn't spend zillions to buy NBC Universal just to get better reception and sit on their verandas and congratulate themselves. Ah ... no. They bought NBC to (three guesses!) Make Money.
Before Comcast, Jon Litner was Executive Vice President/COO of the National Hockey League from 1999 to 2005, where he managed U.S. and Canadian broadcasting, digital media, public relations, special events, new business development, game scheduling and in-house television production. (Insert hope for IndyCar fans in Canada here).
So we had to figure that Comcast was serious as a heart attack about making as much money as they can, sustainably, off their various properties. Because that's how business rolls here in the great free enterprise democracy.
Then, last week, IndyCar announces (quietly) that online streaming video of practices and races on IndyCar.com is GONE. Not gonna happen in 2011. Insert hue and cry here. Up. In. Arms. A lot of hard-cores love the streaming video of practices. People who either don't want to spring for VERSUS on the cable/dish here in the U.S. or who are fans internationally where video is not available even if you want to pay for it, watch the races online, and therefore vented their despondency.
My sympathies are with the Canadian and other international fans who have no ability to get VERSUS/IndyCar programming via TV or even purchase online video, even though some have repeatedly begged to. One would hope that Comcast would set up some kind of online pay-per-view system for those people (and whoever else wants to pay to watch online).
My sympathies are not with people in the U.S. who want to watch VERSUS for free. I had to pay $120 MORE per year to go up a tier on my Dish Network service to view the VERSUS races. Not sure why I should have to pay for something available on the Internet for free.
I will say, to be fair, that I tried to watch the online stream once when I was in a VERSUS-less household and gave up on it. For one, IndyCar has sucked consistently at creating reliable online content beyond timing and scoring, which can also be sketchy. Secondly, the video without the commentary and graphics was not even slightly entertaining, so I bailed (after several freezes of the feed). So, you could argue that I'm paying $10 a month more for the quality of VERSUS's TV-based coverage.
But let's look at this from Comcast's side for a second.
VERSUS paid folding money to IndyCar for the rights to broadcast the races. Why did they do that? To make money off said races. VERSUS makes money in part by attracting subscribers but mostly by attracting advertisers. To get advertisers, you need audience. Either a HUGE audience (Super Bowl) or an audience with a great demographic (CEOs, doctors, families with $250,000+ annual income, etc., like golf). Usually it's a combination of quantity of audience (Super Bowl) and quality of audience (golf).
It's like a company buying avocados in order to make guacamole. Comcast bought the avocados (images of cars racing) from IndyCar so they can process them with other ingredients (announcers, technology, producers, B Unit, etc.) and package them and sell them at a profit.
They may give away some samples of the guacamole to get people to buy some, but don't look at them to have a store somewhere where you can just walk in and help yourself to the guac and walk out without paying.
Seems about that simple to me. Comcast wants to sell its programming to people who "buy" by tuning in. That drives ratings (the universally accepted measurement of audience) which determines how much VERSUS can charge for ad space on the broadcast (or if they can sell any at all).
The brutal economic truth is Comcast probably doesn't care a ton for international fans because advertisers in the U.S. won't pay to reach audiences in Europe. I care, don't get me wrong, but ...
In my business (writing) I wouldn't pay to advertise in Spain, because I don't speak Spanish. Advertising my services as a writer in Spain would be like setting my marking dollars on fire.
So, in a very large respect, this is business. No free lunch. You want IndyCar video, you find a way to tune in to VERSUS. If you give it away to "build fan base" that's great ... as long as some day you realize profit from that fan base via revenue in real cash in some fashion.
The big question in my mind is: "Can VERSUS make money off a Web-based feed?" Because many have argued that video is migrating to the internet, so maybe VERSUS can make money by jumping on that train now. In Web land, traffic = revenue. I found this out personally last year when a photo of the historic Indy 500 grid I posted got onto a wildly popular agrigator (agrigators are pages full of links to other pages). I got 17,000 unique visitors in one day. I normally average 400. I made $30 in one day. I normally make 50 cents. A day later when my link was no longer on the aggrigator, I was back to 400. Traffic = revenue.
Bad news on this front too: I have heard reliably that VERSUS is going to pull the plug on coverage of IndyCar on VERSUS.com. That's a round bale of not good, because you don't pull the plug on something that's drawing or has the potential to draw traffic.
Another useful thing to keep in mind here is that successful TV networks don't go to the rest room without running the numbers. In other words, these decisions aren't made randomly by three guys sitting around having cocktails. No. They're made based on audience measurements, competition, other available programming that could generate bigger return on investments in production and marketing. Tons of factors. Audience measures are easy on the Web. Hits, unique visitors, etc. etc. all very measurable as are the physical location of people are hitting your page.
If VERSUS yanks the plug on IndyCar coverage, you can be sure it's not because executives don't like IndyCar personally or are having a bad day. I think it means not enough people are hitting IndyCar coverage to make it worth the expense (primarily what they pay people to maintain and generate content for the site) to keep it going.
So let's review: there's a new sheriff in town. He's not real into giving stuff away or operating as a non-profit. If you want to watch IndyCar, you gotta pay (in some fashion).
The silver lining: If the new sheriff wants to make money on IndyCar, it's possible he'll invest in the quality of broadcast. This was VERSUS's approach. "Super serving" is what they called it. Extendo post-race time, etc. The idea is you invest in something to make it more worth buying (attract a bigger audience). VERSUS claimed this approach worked for the NHL and that they were on course to make it work for IndyCar. The dark cloud: If the new sheriff thinks there's no hope, he'll make the minimum-required-by-contract effort and divert production resources to other programming that generates more return.
We'll probably know by the second or third race which way the sheriff is going. I am a touch concerned since IndyCar starts with FOUR road/street courses, which Americans have repeatedly demonstrated they will not watch in large numbers. Right now we don't even know who the broadcast crew will be. It's NONE OF YOUR BUSINESS (To Be Announced). I have heard rumors, but so far no announcement ... two weeks before the first race. Not encouraging.
It's gotta be Tension City for Randy Bernard and IndyCar lately. Again, it's all about fans. Attracting eyeballs on TV and in the stands. It's always been about fans, and always will be about fans, even though IndyCar has seemed to think it was about teams and sponsors and hospitality tents and everything else except fans. Put fans first, the rest takes care of itself. Don't put fans first, you go belly up, eventually.
I'm afraid we're paying for years when IndyCar lost focus on fans. At least 'Nard Dog (Bernard) seems to get that it's all about the customer (fan). But will the change in focus be too little too late for IndyCar?
I'd like people to consider just how many other major professional sports allow people to view their events for free online. That has always smacked of "bush league" to me. If it's a worthwhile event, people should be paying for it.
I have a feeling that NBC and Comcast are going to attempt to take on ESPN and as soon as they do, there will be a major NBC Sports streaming site up, which will almost assuredly include IndyCar coverage. Think about it, this merger is a hell of a lot bigger than IndyCar. NBC has control of the Olympics - they're gonna have to find a way to stream those, the 2012 Super Bowl, major horse races, come on, there's absolutely going to need to be a large streaming network for these things, and it's going to need content to fill it up on other dates, why the hell wouldn't they take back control of everything they have the rights to?
We can all complain all we want about this one immediate development right now, but guess what? It's all about the bigger picture for the folks in control, and so it should be for us.
Does anybody REALLY think this decision was made with IndyCar being the first and foremost thing on Comcast's mind?
Posted by: Christopher Leone | March 14, 2011 at 10:11 AM
Remember PDog that while it maybe 2 weeks before the first race, the first race is on ABC. Versus has till April 10 before their first race broadcast no need to panic ... yet!
Posted by: Brett M. Waldrep | March 14, 2011 at 10:19 AM
Thank you for this very insightful, yet sobering, account of the inner-workings in TV land. You have a better understanding than I do, and you've explained it well. I've also heard the rumors and am curious why no announcement has been made regarding the on-air talent at Versus. You would think this close to the season, something would be announced.
17,000 unique hits in one day? I'm not worthy.
Posted by: Oilpressure | March 14, 2011 at 10:22 AM
The problem I have is that I live in Canada not Spain. While traveling to Canada is an international event like traveling to Spain would be, Canada is still very tied into the USA. I pay dearly for my Cable TV which gives me the right to watch and dvr NBC shows "over here" but when it comes to internet streaming of the same content thats NONE OF YOUR BUSINESS! No Hulu no nothing. If your IP is not based in the USA that tough luck. So while Versus is not available, nor will it likely be for any time in the future, in Canada, I have no way of paying for the content. Even if they did provide some sort of online PPV option it would surely be blocked at the border as well. INDYCAR is happy to take our Canadian Dollars when they come to Toronto and Edmonton, I hope they figure out quick some way to take them so I can watch coverage of there other events too. Heck I can watch practice, qualifying and races all day on SPEEDTV if I wanted to watch Nascar. Why isn't that crap blocked at the border!
Posted by: Sossprint15 | March 14, 2011 at 10:47 AM
If the rumored TV crew turns out to be real then it should be a good sign, but not having it confirmed with two weeks to go is a problem. The first four races are problematic...On the positive side the merger should raise awareness of Versus and get it on more lower tier cable packages, both of which should help ratings. The biggest danger to Indycar is that Comcast is going to start trying to add larger sports and if Indycar doesn't grow very quickly they risk getting left behind, just like what happened at ESPN. Indycar's pretty screwed if this doesn't work out...
Posted by: Dylan | March 14, 2011 at 10:50 AM
Oh, and the online thing is really worrying. They've gotten Olson, Iannucci and Hobson and now they're going to be gone again?!?!?!?! WTF! Do you know if they're considering moving them over to NBC Sports or whatever they're going to call it? Hope so.
17,000 hits in one day!?!?! Wow... and you average 400??? As George said, we're not worthy. Unique hits too...
Posted by: Dylan | March 14, 2011 at 11:00 AM
Great write-up Pdog, 100% on the ball. Just a few points worth mentioning:
#1 NBC already airs over 100+ Olympic events online for free (they sell advertising on that space, just as ESPN and CBS do for their free streaming services)
#2 NFL/MLB/NBA and all NCAA sports (through CBS-C) offers pay-to-view offerings online. For IndyCar, there are already cameras following the track, already a radio feed, if NBC just spliced those together, fans would pay for it.
#3 most of the U.S. based outrage is that even when Versus has qualifications they are on tape-delay so no one is going to watch qualifications if they already know how it ends. If quals continue on tape-delay then ratings will never go up. So quals and practice were the most useful online streaming because it was stuff you can't get on Versus.
If NBC went in either direction (free streaming that was inferior to TV with ads on screen OR pay to view) I don't think anyone would have a single issue. Both would generate revenue for NBC; just a matter of knowing how much.
The worry (that I analyzed in my writeup yesterday), GrandAm has already proven that online video offerings don't have a negative effect on TV ratings, in fact much the opposite. My fear is that NBC/Versus is cutting online streaming in hopes that ratings will take a boost; and if they don't they'll start placing blame elsewhere and that would be a real bad situation for the league to be in.
Posted by: Allen Wedge | March 14, 2011 at 11:18 AM
Versus might dump Indycar entirely? Did I read that right? Seriously?
One thing is that they owe money to Indycar for several more years right? And they also need programming? And ABC's rights to the 500 are up shortly, aren't they?
Ugh. I'm going back under my rock.
Posted by: redcar | March 14, 2011 at 11:19 AM
Agreed. Television entities can't give away their content for free; however, until Versus gets their penetration numbers up, IndyCar races need to be made available (at an appropriate fee) to those fans—international or otherwise—that don't have access to the network.
Posted by: andhesonit | March 14, 2011 at 12:03 PM
Of course keep in mind there are about a zillion nuances and wrinkles and tons of data and debate that go into these decisions as well. There's a lot of art that goes along with the science, which is why the executives who make The Call can make an assload of money or get fired pretty easily.
Posted by: pressdog | March 14, 2011 at 12:09 PM
Yum..
pressdog serves us some clarifying sauce for this dark,dank and tasteless soup.
Jp
Posted by: Jp | March 14, 2011 at 02:41 PM
enjoy the indycar season then.
(ex.indycar fan, audacious enough to live overseas / unable to install a dish)
Posted by: sidepodcast | March 14, 2011 at 03:02 PM
I agree with Allen, if the ratings don't improve, no way will Comcast/NBC execs connect the dots and properly conclude that not streaming quals live is hurting them, rather than helping them. That would be 'fessing up to a mistake, and the egos-that-be in the management of entertainment tend to be the type who are not capable of doing so.
Posted by: Sejarzo | March 14, 2011 at 03:04 PM
Nice work p-dog very good article, as I mentioned on the forum, can I assume Hobbson and Ianucci have already gotten there pink slips?
Posted by: Tim in Independence | March 14, 2011 at 03:28 PM
@redcar: Versus is apparently giving up on their IndyCar web site, not the TV broadcast.
Posted by: Concerned Fan | March 14, 2011 at 07:06 PM