Red Bull F1 - The riskiest sporting gamble ever

Red Bull Racing's F1 team has become one of the biggest marketing efforts of the company and has been one of the best decisions the company has ever made, what many people don't realise it was one of the riskiest decisions ever made, for many companies such as Toyota, BMW, Honda, Ford, Air Asia, Virgin it was the worst decisions they had ever made and did considerable damage to their organisation and owners.

Red Bull's decision to move from sponsorship to a Formula One team has to be in my opinion one of the craziest gambles that a company has made in regards to entering a sporting arena, Red Bull is no stranger to motor sports or even Formula 1, having sponsored teams since 1995 but in 2005 they decided to outright buy a Formula 1 team, while they got a good deal taking over Jaguar (from Ford) who were looking to pull out, the costs involved with running a team do reach into the hundreds of milllions.

Moneywise, it is way safer and less riskier to engage in a sponsorship.  Most sporting organisations do not aim to make a profit as winning is always seen to come before profit.  To get an idea of the costs involved, it can cost around $100 million to even compete in a season of Formula 1 and this is a budget for a "backmarker" a team that generally trails the back of the pack and is often lapped by the leaders.  In comparison $100 million bought the major sponsor rights of Ferrari at the time, a household name and dominant motorsport organisation that was near impossible to beat when Schumacher was as his peak.

The sponsorship fees of $100 million were also considered overpriced and were highly likely to drop in 2007, not too long after Red Bull bought a team.  This was due to many of the top teams were sporting tobacco sponsorship, if you were in charge of the marketing/sponsorship division, tobacco sponsorship was a must have.  Formula 1 was one of the last major global events that allowed tobacco sponsorship, tobacco brands were of course willing to pay a massive premium as they had few other options and even if they did they wanted to be associated with the global reach and glamour of Formula 1.  The effects post-tobacco were so devastating for teams especially for Renault, they won the 2005 and 2006 championship with tobacco sponsor Mild Seven, Renault would struggle over the next few years and was forced to eventually sell the team.

To make matters worse, the financial crisis made finding sponsors near impossible and many teams opted for "pay drivers".  The team would usually have one top driver who would score points for the team and another "paid driver" who would be slower than the head driver but would bring in millions in sponsor money to help develop the car.  Red Bull could have easily had their pick of sponsorships for incredibly cheap.  After losing many millions on an F1 team, Virgin would later sponsor (and was the only sponsor for a while) a car for way, way less that won the world championship.

There is of course the control of running your own team and there is the myth that if you have enough money you can buy a championship, there was a great example of this in the English Premier League when Roman Abramovich bought Chelsea and use his wealth to create a superteam that would dominate the Premier League and Europe.  Soccer is much easier, you can buy talented players to make a team better Formula 1 is far from this easy, you can't simply buy a fast car or parts, they need to be designed, manufactured and tested and it's a long and difficult process.  Even with lots of money some of the last place teams in recent times that have struggled included Virgin F1 and Caterham owned by Richard Branson and Tony Fernandes (Owner of Air Asia) who are far from short of money.

To make matters even more scary, in the last 15 years, Honda, BMW, Toyota and Jaguar (Ford), massive car manufacturers with lots of money and who could benefit from Formula 1 by being able to right off losses as both a marketing and RnD exercise (F1 technology goes into future road cars, but it's not going into Red Bull cans), they had a lot more they were willing and prepared to lose compared to Red Bull, plus these organisations have had lots of expertise, knowledge and experience in other motorsports.  These 4 teams spent on average around only 5-6 years in Formula one, of all the teams, BMW was the only team to actually win a race and it only happened once.  Toyota had insane costs to build their team from scratch and also reportedly had the biggest budgets year in and out and struggled to ever get a podium position, Toyota won no races in their 8 years in Formula 1.

Honda's spend wasn't as much as Toyota but their investment was rumoured to be upwards of a billion, their last season saw them constantly near the back in 2008 although rumour had it they had created a revolutionary F1 car that would win races easily.  The corporate board didn't want to spend any more money and with all the costs and debts and sold the team the current manager at the time.  The new owner won the 2009 championship with a team he purchased for only $1, Honda couldn't even get one win, let alone a championship with over $1 billion!

One other thing to make things interesting was that Red Bull didn't buy one Formula 1 team, they bought 2!  This was the purchase of both Red Bull Racing (formerly Jaguar) and Scuderia Toro Rosso (formerly Minardi), so when most mega car companies struggled to even afford to run a single Formula 1 team, this company does the impossible.  Red Bull was using Toro Rosso as a junior and testing team for up and coming talent for their main team Red Bull Racing, they also offer racing sponsorships to those they believe are the next big thing.

Some people may have thought this was overkill but early on, however keep in mind Schumacher had retired and teams were actively hunting around to find the next big thing.  Red Bull found another fast German by the name of Sebastian Vettel, starting out in Toro Rosso he performed well and even grabbed their first win.  Vettel would later graduate to become among an elite group of only 3 people who have won 4 championships in a row.

Neko Nation a lesson in Catvertising

"Do you think Neko Nation will die out anytime soon?"
"I'm selling an event about cats on the internet, I doubt it"

A friend of mine asked me this question not too long ago and I think it definitely holds some truth about running Neko Nation and how it has a great deal of long-term, we've got the power of cats.  After all dogs might be a man's best friend but cats might be the internet's best friend.  You can use the power of "catvertising", sharing cats and cat related things work, it always guarantees more interest to your social media pages but lets be honest, you need to keep things relevant, I think it's pretty obvious that cat pictures don't exactly have a place on a company page such as say Chevron or Commonwealth Bank.

I think the brilliant thing about the business I've been involved in, very early on I decided that cats would be a key part of the event, I mean "Neko" is Japanese for cats, we've got an event about anime which revolves around the catgirls (and catboys) that routinely play a part in anime and many of our event goers have cats and love to share cat pictures, it's part of our target market.  We don't try to force cat pics in, it was originally part of the business plan.

It's cheap, it's cheating but it works, the only other method I think that works just as easily is sex appeal and as much as people hate it being overused, it does work.  For us, the beauty of our business is that we're technically able to combine both, giving us an incredibly and effectively easy, if cheap and predictable marketing plan.  There's way more too it but it's a case of making the simple things work out.

Big Day Out, where did it all go wrong?

So the Big Day Out shutting down is sad news, for well over 20 years it has been an incredibly important and amazing part of the Australian music scene, for many years it was considered easily the biggest, best and most important music festival in Australia, in the last few years, there were recent festival which saw absolutely stunningly fast sellouts within days, even hours of tickets being released but sadly it had become a shadow of it's former glorious self and shut down, so what exactly went wrong, while it's hard to analyse behind the scenes and politics there are various elements that affected them.

One of Big Day Out's strengths for a long time was that there was nothing else like it and it was often leading the way and the only real big music festival happening all around Australia, eventually other festivals decided to come in and give it a crack but at the end of the day didn't really put a huge dent into the Big Day Out, however the electronic music invasion did really start to tighten the screws and put pressure onto them.

Touring one band around Australia can be incredibly expensive, let alone a massive line up of many, many big bands with a lot of gear to cart around the country.  With electronic music festivals, most DJ's either used top of the line Technic turntables (Vinyl has significantly been dying down in the last 10 years or so), top of the line Pioneer CDJs or the growing use of DJ's bringing their own laptops and DJ controllers, back in the day of Vinyl DJ's, record crates used to weigh many, many kilos, surprisingly even CD's can prove to be a bit weighty, but these days, USB's, laptops and midi controllers are all relatively light weight and are often carted around by the performers themselves.  There's little drama or challenges with changeovers compared to switching bands over as DJ's all virtually use very similar equipment, plus while big name acts like Skrillex or Deadmau5 may charge a bit, there are rarely any bands and usually don't command near the levels of money that some of the big name bands do.  In short, electronic festivals can be done very cheaply.

Then of course, we have had a massive switch towards the popularity of EDM (electronic dance music), this has definitely made it harder for the Big Day Out to compete, it definitely didn't kill them off at first but they started to adopt more EDM acts and it certainly put some pressure and competition on them.  Of course seeing a live band won't compare to DJ's so they were still relatively safe and had different offerings compared to most festivals, well maybe except Soundwave.

Soundwave is Australia's major hard rock and metal festival, this has a focus on rock bands and headliners have included the likes of Marilyn Manson, Iron Maiden, Nine Inch Nails, Metallica, they've managed to obtain the major acts.  Many people made comparisons to how this festival was what Big Day Out used to be like in the good old days, Soundwave grew very strong over the year attracting major acts and had a very strong dedicated crowd with many claiming that Soundwave would often have much better line ups and were often confused by what the Big Day Out was often doing.

Soundwave's main success was the fact that it was big name acts and giving people what they want, Big Day Outs lineups seemed to make later sense in the year's gone on.  For example 2008 was one of the most successful Big Day Out lineups with Rage Against the Machine headlining the way, the following year the headliner was Neil Young, most of the 18-30 year olds had no idea who he was, the 40+ crowd knew who he was they were somewhat excited but while they love going to concerts to see the bands they like, they're not big on being around all the young drunken yobbos at Big Day Out.

Both events had very different ways of responding to people's thoughts of the line-ups.  Soundwave owner AJ, would often chat to people on Twitter about suggestions on what bands to get, see what's popular and at least talk to a lot of the bands mentioned to see the possibilities of getting them to come down at a Soundwave in the future.  Upon a Big Day Out lineup release that fans found very disappointing (especially compared to Soundwave), the promoters stuck their fingers in their ears and kept going on about how great the line up is and decided to ignore the critics and potential festival goers, who in return, ignored their event.

Big Day Out then slammed Soundwave, claiming that what they were doing was unsustainable and suicidal.  How could a festival be bringing over so many international acts?  It would raise expectations greatly, it's insanely risky, there's no need for overkill with their lineups, Big Day Out claimed it could do a much better and simpler lineup.  Punters were not impressed and just saw jealousy, AJ from Soundwave claimed he was just getting the people what they want and despite the costs people will pay money to see them and they did.

There was also the controversial decision of Kanye West in 2012.  A festival well known for having the likes of Tool, Rammstein, Metallica, Rage Against the Machine headline, all of a sudden Kanye West is the headliner, what is going on.  This confused fans greatly, this alternative rock event is now a pop music festival?  Plus it's Kanye West, he has a lot of fans but a lot of people hate his ego so much they don't want anything to do with him.

Music festivals are expensive and many people limit their festival choices to their music choices.  Do you like metal and rock?  Soundwave.  Do you like the latest big name EDM acts?  Future Music.  Feel like a roadtrip and camping?  Southbound.  Each festival saw a distinct target market, gave them an experience and the acts to go with it, it honestly felt like Big Day Out was just a bunch of great acts but with no apparent rhyme of reason, they didn't do one area good, now that was fine when it was the biggest and best but the music festival scene was becoming pretty packed, Big Day Out didn't really have a set target market.  It was an embarassing year, Kanye West got cut from the lineup in Perth and Adelaide, Perth usually gets in excess of 30000, it was lucky to get around 8000 that year, not exactly how they wanted to celebrate their 20th anniversary.  The 2013 line-up was well received but by then, the majority of fans had given up and stopped caring, they experienced all the other festivals and the summer festival crowd voted at all the festivals except BDO.

Big Day Out went from "the music festival" to just some festival without sense or purpose.  They didn't have an easy to describe vision, they wanted to be the best music festival but best at what?  Music is incredibly subjective and the whole idea of being a jack of all trades meant they were a master of none.

Game of Thrones - Access Denied

Oatmeal covered this with a brilliant comic and a just as amazing remixed relevant one for New Zealand.  Australia falls mostly towards the New Zealand one although with the exception of the fact that we have Foxtel, however Foxtel is highly comparable to HBO in the fact that you can't just buy the rights to a single show you need to subscribe to a cable package.  In Australia not only is this Foxtel but it's not covered in a basic package, meaning you also have to buy the premium package on top as well and sign up for a long term commitment, all to watch a show legally.

Not surprisingly Game of Thrones has been the most pirated show in history, with Australia leading the way, while we can't blame the show creators who have created an amazing show with a massive budget which include a lot of hard working people who need to be paid, the reality is that we're seeing a huge number of unnecessary obstacles that prevent people from being able to access Game of Thrones.

Australian consumers and heck even most consumers around the world are living in a world where we are no longer restricted by watching programmes when a TV show tells us too, even TV networks have slowly moved onto this, funnily enough ABC was considered to be one of the most advanced with this, offering Dr. Who fans the opportunity to watch the show on a one hour delay directly after it has been shown on the BBC, this is despite being on at 6am in the morning, like Game of Thrones, fans of Dr. Who can be just as dedicated.

While piracy is illegal and shouldn't be encouraged, at the end of the day, this isn't pirated because people are too cheap, it's due to the inability to easily obtain the show legally.  Game of Thrones is getting absolutely amazing and rave reviews and fans are massively addicted to this show who are guaranteed to watch all the episodes as they come out, many TV shows would kill for these sort of fans and it appears that the distribution methods are dropping the ball on potential revenue and additional frustrations for fans.  Winter is coming, better distribution is not.

Donglegate

"Donglegate" may have been one of the biggest talking points of Pycon, a convention for developers of the computer programming language Python.  Two guys sitting behind Adria Richards were making sexual jokes about "forking" and "dongles", a play on technical computer terminology.  The jokes were possibly a little bit inappropriate in normal circumstances but this was a convention where the vast majority were there representing the companies they worked for.

So this is the part where you would think that Adria would have been fed up hearing these jokes and either telling these guys to stop and possibly escalating it to a staff member of Pycon?  Nope, she went straight to twitter to publicly shame these two individuals, you'd think this would be a small simple case to resolve, Pycon apparently spoke to the two in private and decided to give the guys a warning, which most people would have seen as fair enough, as these guys later were on better behaviour.

Being social media this blew up massively once it was heard that one of the guys pictured was fired by his company Playhaven, quoting that his jokes were inappropriate for an employee of an organisation to make and Adria was celebrating this victory, or so she thought.

This absolutely pissed off the tech community and also a lot of people, the jokes while inappropriate were told to his work colleague, while others could possibly overhear, it was more a cast of boys being boys and just having a chat.  This sent the internet into a massive rage, a lot of death, rape and torture threats were sent to Adria's twitter as she defended her position on how great it was for her and a proud step for feminism.

There is definitely a feminism issue there but that's a completely another story and has been covered well by feminist blogs if you wish to have a view point on this.  From a social media point of view, this was getting further out of control, people got past Adria the person and Adria the Sendgrid employee, people were worried about the message this was sending, Sendgrid was saying nothing and to their credit it was smart for the time being was smart for them not to get involved.  People started boycotting Sendgrid and even trying to DDOS the site down.

Eventually Sendgrid realised they had no choice, they were employing someone that people saw at the devil, someone who will try to take you down if you make the slightest step out of line in public, this was not the sort of image they wanted to send out and Adria was fired, she wasn't happy but the internet celebrated as they finally got revenge for the original fallen employee.

All this over a mere dongle joke being overheard.