12/08/2010 2:51PM

Tracks reluctant to spend money for high-definition TV broadcasts


TUCSON, Ariz. – The U.S. racing industry continues to attempt to meet changing consumer tastes in a world in which broadcast signals can be watched on a multitude of ever-evolving devices, but it remains constrained by the amount of money it can devote to the efforts because of its precarious financial condition, according to officials who spoke on Wednesday at the University of Arizona Race Track Industry Program Symposium on Racing and Gaming.

Technologically, racing has always been behind the curve in broadcasting – the industry at-large famously rejected overtures by broadcasters to televise races in the 1960s and 1970s for fear that it would cannibalize ontrack business – and that largely remains the case today, with racing being one of the few sports that does not broadcast the vast majority of its programming in high-definition. But many racing companies are attempting to at least keep step with other content providers in getting its signals on to mobile platforms and the Internet, according to the speakers, who appeared on Wednesday during a panel examining broadcast technologies.

Todd Roberts, the chief executive of Roberts Communications Network, said that his company will soon launch subscription services for Internet and mobile platforms such as smartphones and tablet computers that will allow racing fans to watch 80 signals from live tracks, making those signals available at any time, at any location. A broadcast subscription service offering 80 dedicated channels on the Dish Network satellite service is already available through the company for $50 a month. RBC handles transmissions and broadcast services for nearly the entire racing industry through contracts with racetracks and betting locations and broadcasters.

The backbone of the new services is a totally revamped network that Roberts Communications Network built over the past four years to replace an existing network that relied almost totally on air-to-air transmission of racing signals through satellites. The network now is capable of transmitting both over the air and over the Internet, and could handle the bandwidth that would be required if all of the major U.S. racetracks broadcast their signals in high-definition, Roberts said.

However, only six racetracks – Keeneland, Charles Town, and the four tracks owned by Churchill Downs Inc. – have purchased high-definition television cameras and the equipment necessary to broadcast in the HD format, while only a handful of betting locations have invested in the equipment necessary to view the HD signals. That’s a woeful number when compared with other sports, which have embraced high-definition television to the delight of their fans and customers, despite the higher costs.

Racing, meanwhile, continues to struggle with the expense required to transmit in HD. On Tuesday, Robert Evans, the chief executive officer of Churchill Downs Inc., said that Churchill spent $1.2 million at each of its tracks to upgrade cameras and equipment for high-definition broadcasting, and it currently spends $750,000 a year to enable high-definition transmission of the signals to 42 betting locations. That’s out of 1,600 betting locations worldwide. Evans said that he didn’t know why he was throwing that $750,000 “down a hole,” and Roberts said that he has a meeting with Evans next week in which he expects Churchill to pull the plug on its HD transmissions, at least temporarily.

In fact, when Roberts Communications launched its project to rebuild the network, its racetrack customers said that they weren’t willing to face any higher costs for transmission of their signals, according to Roberts.

“We were dealing with the requirement that there would be no cost increases,” Roberts said. “That’s a really tough condition when you’re trying to rebuild a network.”

On the mobile side, higher costs also accompany the effort to make racing available on multiple platforms, the same cost structure that other entertainment companies are facing, according to Steven C. Hawley, a consultant with advanced media strategies who spoke on the Wednesday morning panel. But Hawley said that industries that don’t make the investment to cater to consumers who are now far more likely to want to watch signals on mobile devices risks losing an entire generation of customers.

In the United Kingdom, Athreraces, a company that broadcasts signals from racetracks to betting shops and homes, has focused its latest efforts on diversifying the number of ways consumers can watch races and other racing content. The efforts include the production of downloadable news clips, features, and archived races that are available through a variety of mobile platforms, according to Matthew Imi, the chief executive of the company.

“We have to place technology at the heart of our business if we are going to give our customers what they want,” Imi said. “As a rights holder [to racing signals], we need to make all of our content available on all platforms at a zero-price point.” In other words, consumers don’t want to pay for it.

As a result, Athreraces also struggles with the costs of investing in the technologies needed for additional distribution, Imi said. Broadcasting in HD in the U.K., Imi said, “is cost-prohibitive” for the 1,600 days of racing that the company currently broadcasts, and so HD transmission is limited to “special events” such as broadcasts of the Epsom Derby and other high-profile races.