Formula 1 is partnering with Zoom to virtually recreate its corporate hospitality business, which generated $358 million of its $2 billion in revenue during the 2019 season. The partnership is reportedly a six-figure deal.
It represents the latest step by Formula 1 to embrace technology as a way to bring in new fans and combat declining TV ratings, which dropped 3.9% last year. Formula 1 is betting drivers like 22-year-old Charles Leclerc – with his 3.2 million Instagram followers and 489,000 more on Twitch – can help draw in a new demographic.
The efforts appear to be working: The Virtual Grand Prix generated more than 94 million video views and 22 million live streams since March 16. Overall social engagement is up 30%. Last month, ESPN drew a record 752,000 viewers for the Austrian Grand Prix, up 16% from last year’s race, which was the previous record.
Formula 1’s strategy is also gaining attention from other companies in the tech world. Spotify has partnered with the organization to launch a podcast, Paddock Pass, hosted by insider Will Buxton. The series will air three times a week and takes fans around the world with interviews with drivers before and after races. The podcast follows a popular docuseries on Netflix, Formula 1: Drive to Survive, which had its second season debut in February.
Liberty Media acquired Formula 1 in 2017 for $4.4 billion when global viewership was 352 million, down from 2008’s 600 million. The circuit’s sponsorships in the past 15 years are worth more than $30 billion combined.