Formula 1 is the pinnacle of motorsport. The high-speed, adrenaline-pumping competition showcases cutting-edge technology and a powerful business model. It has evolved from entertaining, mostly to wealthy individuals, to a sport that actively engages and interacts with different audiences through several channels.
The origins of Formula 1 can be traced back to the early 1900s when motor racing started to become popular in Europe. But Formula 1, as we know it today, was founded by British magnate Bernie Ecclestone, who was the CEO for over 40 years. He grew the company to a 1.9-billion-dollar turnover business and supported the growth of a worldwide racing competition where teams travel to a different Grands Prix in a different country each week.
Mister Ecclestone had a very strong vision and his strategy was based on 4 strong pillars.
Granting the broadcasting rights of each Grand Prix to local media companies in each country.
Selling ad spaces to luxury consumer brands.
Each race they charge hosting fees for the racetrack and they would earn a percentage on ticket sales.
The world tour faced several challenges such as logistics, and for this reason Formula 1 has partnered up with several companies like DHL, which was its partner for more than four decades.
The entire business model focused on serving a clear customer segment: 70+ year-old men with the financial means to buy the luxury products of sponsors such as Rolex. When at one point a new strategy was proposed to attract a younger audience. Bernie answered with one of his many legendary quotes:
"I'd rather get to the 70-year-old guy who's got plenty of cash. There's no point trying to reach these kids because they won't buy any of the products here and if marketers are aiming at this audience, then maybe they should advertise with Disney."
The strategy of the Formula 1 took a 180°turn in 2016 when it was acquired by American media company Liberty Media. Their goal was focused on reaching different audiences and engaging with them both on and off track. This shift in strategy resulted in a new approach to their channels.
F1 TV was launched to offer fans a subscription-based streaming service covering races, practice sessions, onboard cameras, and real-time insights fueled by data powered by Amazon Web Services.
Instagram, for the first time, fans were able to engage with the sport through social media where they can watch bite-sized content on their feeds several times a day.
Netflix, maybe the most remarkable channel, has a partnership with the streaming giant to create the series “Drive to Survive” which offers a never-before-seen perspective on the sport by showing the human side of Formula 1. This documentary-style series showcases the drivers’ personalities, emotions, rivalries and struggles.
This 180° turn has resulted in unprecedented engagement of several audiences around the world. According to Salesforce, the sport now has around 500 million fans around the world, of which one-third became a fan after the Formula 1 started having a strong digital presence. So it’s safe to say the shift in strategy paid off.
Leadership with a strong vision will help in strategic decision-making. And strategy is all about making choices.
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