The future of racing is here, and it is silent.

I recently had the opportunity to attend the world’s first sanctioned, all-electric motorcycle race.  It was the TTXGP event at the 102nd running of the Isle of Man TT.

The TT in itself is amazing– something everyone should see.  It originated in the days when there were no racetracks.  If you wanted to race, you closed roads and raced there.  It is one of the last races of this type with a 37.73-mile course winding around the British island.  There are relatively few slow corners.  Most of a lap is spent at top speed winding through small towns on narrow roads lined with stone walls that are many centuries old.

Run during the two weeks of racing was a special event for zero-emission motorcycles.  All of the entrants ended up being battery-powered and electric-motor-driven.  They consisted of regular streetbikes with electric motors unattractively shoe-horned in, like the race winning Agni, or purpose-built electric racers like the Mission One or the gorgeous Brammo Enertia TTRs.  Presentation ranged from the MotoGP-spec pit and equipment of Brammo and Mission to bikes that literally were built in a barn and looked like it.

The atmosphere in the paddock was refreshing and one of how racing used to be.  Teams helped each other conquer the challenges of the new technology, and they socialized and dined together in the evenings.  Innovation abounded with many different takes on what would make a fast electric motorcycle.  All the bikes looked unique– not like the same bikes with different paint, as is the case with modern races.

But the treat was the performance.  In the technology’s racing debut, these motorcycles faced the world’s most challenging race circuit, and they came out looking good.  Top speeds were consistently over 100 mph with the fastest average-lap speeds about 80.  And spectators commented they looked as fast through the corners as any bikes that ran during the TT weeks.  Critics were quick to point out that these were speeds of bikes from the 1930s, but judging from the increase in performance from these bikes just during the week, they are going to be much faster next year.

Critics also lamented the lack of loud noise from the bikes.  They have a barely-noticeable whine in lieu of the traditional 100 db screaming that challenges motorcycling’s acceptance with the public.

But with this lack of noise I heard something that I have never heard at a motorcycle race– the fans.  As the bikes flew through the small towns fans would scream, cheer and clap– and you could hear it!  With as impressive and responsible as this race was, this cheering will only grow louder.

 

The Color of Money

You can’t avoid the avalanche (no pun intended) of information about global warming – it’s everywhere. And without getting into the politics or science behind it, one thing is clear, the business community is responding to the discussion.

Racing isn’t particularly thought of as green, in spite of the occasional tip of the cap in that direction with fuels. LeMans has encouraged the use of newer technologies for turbo diesel engines resulting in significant investment from Audi. The IRL has moved to 100% ethanol. A1GP has moved to an ethanol blend and expressed an intent to utilize further green friendly technologies, and F1 is discussing rules for the 2011 season that could see these technologies put to test in the “highest form of motor racing.”

While NASCAR remains on the other end of the scale, with old technologies and leaded fuel, Peter DeLorenzo has announced the development of a hydrogen-fueled series. That seems like a big bet as; there isn’t much consensus as to which technology will be most broadly deployed long-term. A few years back, the AMA employed unleaded fuel, moving in the right direction.

Motorcycling will be interesting to watch because bikes are generally thought of as getting good mileage and, therefore, greener than cars. But a dirty little secret is that bikes have been dirty relative to cars – mostly due to the lack of catalytic converters. So where do they go from here?

Certainly in the near term, hybrids look to be a consumer friendly technology and will likely find their way in with the “first movers” of racing. And it’s clear the auto manufacturers will want to boost their green credentials as politicians put increasing pressure them to clean up their act. If I were a betting man, that’s where I’d put my money…

But perhaps the biggest sea change will come from sponsors, who will begin to associate themselves with properties that promote green living. What bank, insurance company or soda company wouldn’t? In discussions with major sponsors over the past year or so, the number of requests to see the environmental policy of the racing series represented has skyrocketed. In the future, it will be more difficult to be associated with the laggards in environmental change because there is no downside to being seen as being more environmentally friendly.

SO, the conclusions for rights holders are:

• Its going to happen, so get with the program. Your rulebook is your friend;
• The green platform you create will define your niche and serve as a competitive advantage over the laggards;
• Sponsors will demand it going forward, so the laggards (even NASCAR at some point) will be under pressure to show progress;
• Its not just about engine technology and fuel;
• The biggest opportunity is utilizing your platform to change consumer attitudes and behavior towards green technology;
• Start…now. If you don’t have a policy, start there. If you do, keep moving;
• And you can hire Hardcard to help. We’re up to speed in this area.

 

Media Rights & New Media

The emergence of web 2.0 as a distribution alternative for traditional TV content has received a great deal of attention recently, and for good reason. Technology has indeed caught up with the convergence vision that tech industry leaders have been prognosticating about for years. In many households, mine included, watching video content on a computer or iPod that has been delivered via the Internet is occupying more and more time.

For a media rights holder this is both a daunting challenge and new opportunity. In motorsports there are a couple of interesting scenarios playing out on different scales and in different ways.

MotoGP, the third highest-viewed global TV sports property, behind F1 and soccer, has a claimed worldwide viewing audience that exceeds 300 million. For Dorna, the commercial rights holder for MotoGP, television rights revenues are a significant component of a very successful enterprise and an asset they protect and manage with great vigor. In addition to their far-reaching TV deals, Dorna has developed a terrific, fee-based website, motogp.com, that provides rich, ancillary content and race coverage to an even wider base of passion-fueled MotoGP fans.

In spite of this astute media rights management by Dorna, there is a website that broadcasts the Chinese network’s MotoGP broadcasts live via the Internet without permission from Dorna. And, being in China, there is not much recourse for Dorna at this time.

On a smaller scale, here in the U.S. beginning in 2007, AMA Motocross moved its U.S. TV distribution from the VS. cable channel to Speed Channel. This change will very likely increase TV viewership for motocross and there are some interesting new aspects to the structure of this deal.

Motocross, being somewhat of a niche sports property, is not in a position to receive a television rights fee and, in fact, must pay towards the production costs of the programming. This has allowed motocross to bring in non-TV-media partners to produce and distribute content from the events through the Internet. These online TV rights would have traditionally been held on to by the rights-paying TV partner who would have not likely exploited them.
The complexities of effective media rights management with the myriad of new media opportunities will continue to increase. Savvy rights holders will need to be looking for ways to exploit these and may be able to use them to offset the trends of decreasing TV revenues, increasing TV costs or non-availability of TV time.

 

Motorcycle Roadracing in the U.S. – The next big thing?

Lets look at some indicators. The motorcycle market is continuing its 14-year trend of sales growth. For the fourth-consecutive year, more than one million new units were sold in 2006.

This is important for two reasons. Bike sales drive marketing budgets for the motorcycle makers, and these sales fund racing programs as a key element of their marketing mix. Also with U.S. motorcycling becoming more generally accepted, greater numbers of Americans have become more pre-disposed to watch or attend a motorcycle race, as evidenced by the growing popularity of Supercross over the past few years.

Many older U.S. roadracing facilities have updated their racetracks to be better suited for motorcycle racing. In a previous era, the largest event at these tracks was their CART race (now Champ Car and IRL), which produced much of the annual operating budget and profit for the facility. In current times, the largest (and most profitable) event at these pure roadrace courses is likely to be their Superbike event.

Additionally in the last few years, a couple of new, state-of-the-art, world-class roadrace facilities have been built. Barber Motorsports Park in Birmingham, AL and Miller Motorsports Park outside of Salt Lake City have racetracks and facilities that are on par with the best in the world.

In recent months, Indianapolis Motor Speedway has announced it’s desire to host a MotoGP event, which given the gravity in the motorsports universe that IMS has, a 2008 motorcycle race here could in fact be the tipping point for motorcycle roadracing in the U.S.

But, there’s more. This past weekend, Barber Motorsports announced that they were exploring the possibility of hosting a World Superbike event at their facility in 2008. If the Indy and Barber races come to be, the U.S. will be home to three rounds of world championship motorcycle racing.

Prior to the 2005 Red Bull U.S. Grand Prix at Mazda Raceway Laguna Seca, MotoGP had not visited the U.S. since 1994. And while World Superbike enjoyed a great run of successful events (at Mazda Raceway Laguna Seca), this championship has not visited the U.S. since 2004. This convergence of market forces and events may help motorcycle racing turn that corner to general awareness and acceptance that we have been long waiting for.

 

Why It Matters…

Ok – let’s start at the top. You can accuse me of being biased. Hardcard is formally engaged by the Indianapolis Motor Speedway to advise on motorcycle related projects. So there.

Nonetheless, the prospect of a motorcycle race at IMS is the most important news for motorcycle racing in the US in many, many years.

Why? It’s simple. Indianapolis is racing in America—and to much of the world. There are few facilities, if any, that come close to its history, grandeur, size and penetration into the mind of the casual sports fan. Indy legitimizes.

Ask around about NASCAR’s experience after its first appearance at the Brickyard. That event was one of the key reasons for NASCAR’s mainstream legitimacy. And EVERYONE knows the Indy 500. It is the largest single-day sporting event in the world.

As for bikes? If MotoGP gets to the famous Speedway, look for a new MotoGP record attendance number for six of the seven continents it visits with a legitimate shot at topping some of the outrageous Spanish round attendance numbers. That’s how big this could be. And for legitimizing motorcycle racing, it will benefit motorcycling in the US. That’s good for all of us.

You see, Indy infuses Mojo, hosting only three major events a year with little or no activity beyond that. This is in stark contrast to the demand for 100% utilization most facilities face. The few series invited into Gasoline Alley immediately join an elite and exclusive club and the nation’s mainstream media, gearheads of all types, casual fans and captains of industry take notice. And when they do, they’ll love Nicky. And his parents. And his brothers. Go. Watch. Kiss the Bricks. Let’s all hope it happens.

 

Sponsor Shots Make Good TV

Racing television broadcasts are shot two distinct ways depending on the ownership and control of the television production. If a race series owns and produces their own racing coverage, typically they shoot wide shots that ensure all the series signage shows up on screen. A series that has sold their television rights to a network that produces its own coverage is normally shot differently. The network doesn’t necessarily want the trackside signage to appear on the broadcast (unless those companies advertise on their network), so they shoot real tight shots of the cars or motorcycles.

This close-up, tight shooting style makes bad TV for the racing fans. When the camera is focusing in closely on a car or motorcycle so that it is full-frame, there is no reference for speed or competition. The bike could be going 50 or 200mph, but the viewer can’t tell without background reference.

Also, how close is the car behind or the next group back on the track? The viewer won’t know because in an effort to keep signage out of the shot, a view down the track or looking back to the previous set of corners is not possible.

Watch an F-1, MotoGP or World Superbike race, though. Those wide shots that get the trackside signs on camera also show how fast the cars and bikes are traveling. They show if a competitor is gaining or if the featured rider or driver missed an apex. It’s the view fans get when they are at the race itself. Isn’t that what TV should be trying to convey anyway?

 

Thoughts On Media

Cable, network, broadband, YouTube, wireless…it’s enough to make your head spin. As a group of executives with many years negotiating media deals for content providers, we at Hardcard can tell you that it’s a tough world out there. It’s tough and, potentially, very expensive to make an impression for niche sports like motorcycle racing.

More people tune into watch the Teutul’s build bikes than watch legitimate heroes drag elbows at Mid-Ohio, pirouette down the Corkscrew or blaze through Daytona’s banking at speeds and proximity that is heart stopping. Worse, both are minor compared to the average sitcom on network television.

So, where does it go from here? The landscape will continue to fracture. You can’t fight that tide. This will result in increased pressure on cable and network executives to air programming driving large audiences. They will, in turn, escalate costs to niche content providers or abandon them altogether. Content providers must be ready to respond to rapid changes in the distribution environment already underway.

In a recent interview Bill Gates shook his head in disbelief that more people don’t seem to see the future of content delivery via the internet. We’re almost there now. Tivo’s and DVR’s have empowered viewers significantly (see related blog) such that scheduling is no longer the issue – we can already watch things when we want. So the next evolution is the capacity to watch things where we want. The Internet is the means to provide that capacity.

As compression technology improves and broadband becomes more widely available there will come a point when the viewer cannot distinguish between content delivered via traditional distribution (cable, satellite or over the airwaves – if anybody still does that!) and the Internet. That moment, for better or worse, is coming. When it arrives, content providers will have the option to control distribution to hundreds of millions of homes (and even more hand held devices) rather than be dependent upon traditional media distribution partners. Are you ready? Is racing ready? Remember, it wasn’t long ago that a phone had to be plugged into the wall.

 

Indianapolis Motor Speedway Hires Hardcard

The partners of Hardcard are pleased to repost the following press release from Indianapolis Motor Speedway.

Indianapolis Motor Speedway Hires Hardcard Holdings

INDIANAPOLIS, Friday, Feb. 16, 2007 – The Indianapolis Motor Speedway has hired Hardcard Holdings, a leading motorsports management and consulting firm specializing in motorcycle events, IMS President Joie Chitwood announced Feb. 16.

Hardcard, led by veteran executives and company co-founders Andrew Leisner and John Farris, specializes in consulting, sales, media and brand management services connected to the motorsports industry.

“The Speedway has been looking at hosting a motorcycle event for some time, and we continue to be enthusiastic about the prospects,” Chitwood said. “Hardcard will advise and consult with the Speedway as we continue to pursue and devise plans for this exciting opportunity.

“Hardcard’s experience, contacts and accomplishments in motorcycle motorsports are unmatched, and we look forward to the value they bring to the IMS team.”

Leisner has worked in the motorcycle industry for his entire career. A former Grand Prix rider, he has worked as a team manager for a national championship-winning motorcycle racing team, a publisher of a national motorcycle road-racing magazine and vice president of AMA Pro Racing.

Before joining Hardcard, Leisner was a vice president of Mazda Raceway Laguna Seca, where he promoted MotoGP, AMA Superbike, American Le Mans Series, A1GP, Grand Am and historic racing events.

“The reception John and I have had about Hardcard from the motorcycle and motorsports industry has been overwhelmingly positive,” Leisner said. “Being able to work with such an esteemed client as Indianapolis Motor Speedway on such an exciting project is truly an honor and a privilege.”

Farris has been involved in motorsports, automotive marketing and motorcycle racing since 1983, most recently as vice president of commercial development with AMA Pro Racing. In this role he managed the commercial side of the AMA championships and was responsible for sanction agreement negotiation, media rights, sponsorships and marketing. His efforts contributed to a five-fold increase in commercial revenues for AMA’s five professional racing series.

Before joining AMA Pro Racing, Farris spent 17 years working for General Motors as a sales and marketing executive. His responsibilities included management of Chevrolet’s sponsorship of motorcycle racing series, tracks and teams.

Hardcard co-founder Scott Hollingsworth remains with the company as a strategic advisor.

 

ESPN Sports Poll and Motorcyle Racing

In 2006, ESPN released the results of a poll that measured motorsports popularity amongst their “race fan” viewers. The results were predictable in some ways and surprising in others. For the motorcycle racing community, though, they were very promising.

2005 ESPN Sports Poll – Race fans favorite style of racing

1. NASCAR – 59.5
2. NHRA – 13.4
3. Motorcycle events – 9.7
4. F1 – 6.3
5. IRL – 6.1
6. Champ Car – 1.4
7. Other – .04

Motorcycle racing, once the stepchild of motorsports was gaining popularity, not just as a result of the growth of motorcycling in general, but also because of added mainstream acceptance and viewership. It had ascended above all forms of open wheel motorsport.

NASCAR predictably lead the rankings but with an astounding share of the race fan universe. NHRA also had strong numbers, but motorcycle racing gained ground on the quarter-mile crowd from a similar poll conducted in 2004.

Ironically, during the 2006 season, no motorcycle competition aired on the ESPN properties outside of the X-Games. ESPN2 is the exclusive home of the NHRA.

Presumably we will see this survey post results from the 2006 season, as NHRA was a force behind ESPN’s motorsports research. It’s likely that the two-wheel world of sport will have strengthened even more.

 

Digital Viewing Recorders and Motorsports TV

It’s no secret that time-shifted-viewing devices such as TiVo and cable-company-supplied DVRs are a motorsport fan’s best friend. The ability to catch every race in a series and to pause and view highlights in slow motion are some of the best things to happen to racing on TV. Unfortunately, so is fast-forwarding through commercials.

This has advertisers worrying about the impact of, and eyeballs on, their ads. They seek out in-program exposure as a way to reach fans thinking less are seeing their commercials than a traditional live viewing of a broadcast.

But this is not necessarily the case with a concentrated group of hard-core fans like motorsports has. Not that they don’t fast forward through the commercials of taped broadcasts—they still do! But they watch them closely. They watch the commercial pod with intense concentration so that they can stop the fast-forward and hit the play button right as the race comes back on.

They are actually seeing the advertiser and the product, albeit in high speed. The viewer gets a far greater impression than in a live commercial break where they go out to get a snack or use the bathroom. And if there is an ad that interests the viewers, they stop their rapid progression through it and watch it—perhaps even replaying it for a family member later.

And advertisers can also play the system. Put powerful imagery or content in the first five and last five seconds of an ad. Then, demand that the ad runs at the beginning or end of a commercial pod. A DVR viewer sees the first few seconds of each ad leading into the commercial break and the last few seconds of an ad at the end of a commercial break. If there is a compelling-enough message there, the viewer will use the DVR to see the entire ad.

Another way to gain impact during a viewer’s fast forwarding is to slow down the ad. Ads in slow motion appear in real time, more or less, when watched during a fast forward episode. A motocross bike looks amazing going through a set of whoops in super slow motion. When viewed in fast forward, it still makes a strong visual impact.

With understanding of the DVR and how viewers use them, motorsports marketers and advertisers can strategically maintain and even increase the impressions they receive from traditional television commercial advertising.