Formula 1 has signed a new digital deal with Zoom Video Communications to release its virtual Paddock Club experiences during the motor-racing championship’s Covid-19-affected 2020 season.
Nothing forces innovation quite like a crisis. Covid-19 had disrupted sports completely and it has driven sport organisations to put on their thinking caps. E-sports spin-offs were a go-to solution for most sports bodies. The prospect of having to organise sports events behind closed doors has forced the organisers to rethink fan engagement and hospitality strategies.
F1’s Paddock Club is a VIP hospitality lounge for every Grand Prix. It offers exclusive access to team garages with a view of the start and finish lines and access into the pit lane. Also included in the package are driver interviews and tours of the pit lane. The Paddock Club had contributed to almost 18% of F1’s total revenue share over the years. Suspending the corporate hospitality arm meant giving up on $358 million that it generated last year. F1 has struck up a partnership with Zoom to create a virtual substitute for this corporate hospitality business.
Virtual hospitality guests can enjoy an exclusive experience and see various locations, vote in polls and hear from F1 drivers and legends. The service was first tried at the Styrian Grand Prix at the Red Bull Arena. F1 and Zoom were working together to bring additional experiences, in line with regulations provided by the FIA. However, the six-figure deal between F1 and Zoom will not immediately replace the loss of revenue as F1 does not intend to charge for the virtual events right away.
Ben Pincus, director of commercial partnerships at F1, said: “We understood the opportunity Zoom presented to us which was about delivering a live sporting experience for guests despite the fact that much of sport is currently held behind closed doors. Over the past few months, through Project Pitlane and Virtual Grand Prix races, we have seen the ability to innovate is imperative as we collectively adapt to an environment that continues to evolve.”
Zoom has emerged as one of the most successful businesses during the Covid-19 pandemic. Businesses flocked to the video conferencing site to facilitate ‘Work from Home’.
Janine Pelosi, chief marketing officer at Zoom said, “We think that this is a great way to fill the gap while in-person events are not possible. In the long run, we see a hybrid model here, with in-person attendees but also opening up these exclusive events virtually to guests who can’t join due to scheduling conflicts or distance,” The virtual hospitality program’s success will depend on the quality of experience it delivers. Organisers would have to distinguish their offering from the exclusive content that broadcasters deliver. The partnership between F1 and Zoom could extend well beyond this season if the Virtual Paddock Club is a successful business model, as F1 explores new ways of keeping its consumers and fans engaged.