Segmentation


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.

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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.