It was only a matter of time before IndyCar insiders began to blame Versus for their inability to draw a U.S. television audience. We are somewhat surprised that it happened so quickly. Otherwise, it was predictable enough to be certain.
Robin Miller devoted his column on SpeedTV.com to IndyCar's U.S. television partner. He added some data to make the case that he first wrote about in this week's mailbag.
We like Miller because he loves the Indianapolis 500 and IndyCar racing. We do, however, disagree with him at times. His views tend to mirror those of insiders, which is understandable. But insiders don't get to determine what the market will accept."...IndyCar needs to get out of the Versus deal. It doesn't matter if the show is good, nobody's watching." - Robin Miller
The ongoing DirecTV saga notwithstanding, Versus has demonstrated that it is perfectly capable of drawing a legitimate audience if it has a product that U.S. television viewers want to see. The problem is not Versus; it is that the present permutation of IndyCar racing is not designed to attract a U.S. audience.
This series has no legacy stars to lean on - no A.J. Foyt, Mario Andretti, Al and Bobby Unser, Gordon Johncock, and so on. It therefore should race at venues that will attract drivers that can be sold to American fans of motorsports. Instead, the IndyCar Series is moving in the opposite direction.
There is nothing wrong with road and street racing, per se. The problem is that, combined with formula cars and international events, road and street races have unintended consequences. They tend to attract international road racers for whom there is very limited demand in the U.S. market.
How, exectly, are events in Toronto, Edmonton, Japan and Brazil supposed to increase U.S. television ratings? A good portion of street racing's appeal is that it can draw attendees for reasons that are unrelated to the core racing product. Why, then, should the IRL be surprised when it fails to convert those event-goers into television viewers? There are other parties to attend, after all.
Versus has a right to be more frustrated with IndyCar than IndyCar is with Versus. Remembering who is the customer and who is the supplier is a frequent challenge for IndyCar insiders, so we shall remind them here that in this case the customer is Versus. It paid money for this - not much, but some.
Versus has promoted the IndyCar product during popular programming, only to discover that there is very little demand. Production quality has generally exceeded expectations. On-air talent, another frequent object of blame, has improved.
IndyCar is a market failure because the product is designed to please participants and insiders rather than auto racing consumers in the United States. The latter group has demonstrated that it will tune in consistently to watch a product that is designed for its benefit.
It's not 1995 Anymore
Television ratings are less important when market inefficiencies can be exploited and supply chains can be arbitraged. However, unlike CART, the IRL will not succeed in these pursuits because tobacco advertising inefficiencies have been corrected and nearly all U.S. industrial supply chains lead to NASCAR (sans-culottes!). That is why IndyCar is now attempting to arbitrage the Brazilian supply chain.
As we have written before, we like television ratings because they provide a reliable measurement of market acceptance. They can not be bought. They are not influenced by comp tickets and compulsory attendance at corporate outings. They can not be camouflaged by signage and majestic terrain. They are not perverted by four-day attendance figures. They tell the truth even when the truth hurts badly.
The IRL must manage its product. Doing so will require that it take actions that will not be liked by some of its suppliers of racing teams. Costs must be slashed. Many drivers must be replaced.
Unless and until customers are served to their satisfaction, the IndyCar Series will remain a market failure. To think that ABC and ESPN would accept a time buy is ridiculous. ESPN could not wait to get rid of this product. That is why it allowed the IRL to leave a year early.
The marketplace is competitive. ESPN has many, many more options than it did back when CART bought air time. IndyCar racing in its present form does not deserve a major U.S. television partner.
Versus is stuck with IndyCar.
Roggespierre
Blaming the TV network for your sport having a terrible, uninteresting, unmarketable product is like blaming the golf ball when a golfer whiffs on a drive.
ReplyDeleteYes, being on a minor league network like Versus is bad. But there are GOOD REASONS why they are on Versus to begin with. Its not hard to figure, if you think real hard.
You could put Indy Car of 2009 on prime time network TV, with no competition and nobody would watch.
Mr. Dickle,
ReplyDeleteAgain, I would like very much to refute your claims. However, well, scoreboard.
The problem is that a powerful faction in IndyCar believes that all will be well if only the artifice of CART can be reconstructed. It can't.
Tobacco is gone forever. Engine manufacturers are scaling back in racing series that people actually watch. NASCAR has every major U.S. corporation that's worth having. There are no direct sales opportunities left.
IndyCar teams are finding that they must earn sponsorship by earning an audience. Unfortunately, they do not like what the audience likes. This creates dissonance and confusion.
Bob Dylan once wrote that "It may be the devil or it may be the Lord, but you're gonna have to serve somebody." IndyCar teams have worked feverishly to avoid serving anyone for the past 30 years. They are getting exactly what they had coming to them.
I agree. Outrageous cost, Bland drivers, failure to meet the needs of both fans and sponsors,lack of interest in developing new revenue streams,etc. Pick one. Remember, Basesball had similar problems, then the strike and guess what......it got better! Indy Car may have to totally fail before it gets better.
ReplyDelete"The problem is that a powerful faction in IndyCar believes that all will be well if only the artifice of CART can be reconstructed. It can't."
ReplyDeleteEven if the CART model was resurrected, I doubt it would garner much success. IndyCar's position in the market has changed dramatically over the last dozen years, partly their own fault and partly of NASCAR's prowess, but nonetheless, who they were and who they are (to the market) isn't remotely the same.
In my view, the ICS has zero value in the marketplace and that leaves the 500 as the only commodity with market value and going back to the CART model won't fix things. So from a strategic standpoint, I think they need to forget about the series and focus on the 500; ask themselves, "what could we do to get 60 cars qualifying for the race?"
Ironically, TG probably had the right idea in forming the IRL, but he probably didn't go far enough or stick to it long enough. If somehow, someway entering the 500 would be doable for a sprint car or modified team, they'd show up in numbers - but I think the only way to make that doable would be with a tube-frame, front-engine car. Then you can start building a series from there.
-John
It isn't VERSUS that sucks--it does what it can, and for bullfighting, biking, or hunting people go looking for it.
ReplyDeleteThe problem is that it is part of a premium package and people get it (as an add on), who couldn't care less about racing.
If it was on say SPEED, people who are more attuned to racing might stumble over it and stop to see if it is worth watching.
Although I am against side-by-side-by-side racing at 215MPH--if they had stumbled on the Chicago race--they would have stopped to watch!
So even though it isn't VERSUS's fault--the lack of availability to the channel surfer--does not allow the IRL to build a fan base from those that are racing fans,(of all types),or just those who are hunting for something to watch.
The mess is so complex; faulty plan, unstainable economic matrix, lack of American drivers, lack of innovation, entrenched belief in faulty results (close racing between only limited number of teams), lack of leadership, unwillingness to invite change away from a formula that can not be maintained.
I could add more, but why bother, only the Board at the IMS can pull the plug on this dying patient---and I have a feeling the 3 sisters are a lot closer to doing that than you might think!
osca
Osca,
ReplyDeleteYour points are prescient. The only hope that IRL management has left to finance this albatross is Apex Brasil. My fear is that the plan will work, that it will generate sufficient revenue to pacify the IMS Board.
Make no mistake: Angstadt is selling the Brazilian supply chain. He can't sell IndyCar racing because it has so little market value. That is why I call it reconstruction of the CART artifice.
Remember when CART went public? Andrew Craig provided a telling comment in the press release. He said that investors liked CART because they saw value in its contracts. You have an economics degree. Does that statement not remind you of something?
I would suggest that Andrew Craig had it exactly right. The value was in the contracts. That necessarily means that the value was not in the product. It was the derivative, the contracts that had been arbitraged in other markets, that provided the kind of smooth, predictable returns that Wall Street analysts love.
That is what Angstadt is attempting to reconstruct with Apex Brasil. I fear that if he is successful, then he will destroy the Indianapolis 500. The damage will have been done before the Board can adequately reverse course.
I hope that I'm wrong almost as much as I hope that Angstadt fails to pull this off. If the Apex Brasil shenanigans work out as well as the Honda deal, then we most certainly are looking at the beginning of the end of an American institution.
Roggespierre