Pay-per-view doesn’t sound nearly as glamorous as video-on-demand, but unlike VOD it is an established technology that works for anyone with a set-top box-no high-tech equipment or special skills required.
That’s one of the main reasons that Mark Greenberg, executive VP of corporate strategy and communication at Showtime Networks, thinks PPV will continue to be a moneymaker for those networks and cable systems that have learned to use it well.
Showtime recently released a survey called “The Pay-Per-View Industry Review & Digital Cable PPV Study 2001.” Key findings include:
* Fifty million, or nearly half of all U.S. TV homes, have access to PPV-two-thirds of those via satellite or digital cable.
* Total PPV revenue reached an estimated $2.2 billion in 2001, boosted by strong growth in movie and adult revenues, with satellite homes spending twice what cable homes spend.
* Nearly 160 special events were offered on PPV last year, the most ever, including strong showings from comedy, soccer, music and psychics.
* While boxing and wrestling continued to be strong draws, revenue was nearly one-third less in these categories than it was in the best year, 1999.
Mr. Greenberg said the reason boxing isn’t attracting as many PPV customers is obvious. There haven’t been as many high-profile matchups featuring such big names as Mike Tyson, so the category has relied on niche audiences, particular the fan base for Hispanic fighters. At the same time, consolidation in the pro wrestling world cut down on the number of wrestling matches.
But before you dismiss these categories, don’t forget that wrestling still accounts for 64 percent of PPV revenues, and boxing brings in another 31 percent. In terms of revenue, not a single music, adult or special event cracked the list of the top 10 most profitable last year. In the last 10 years, the single-most-profitable PPV event was the Mike Tyson and Evander Holyfield 1997 rematch, which raked in $99.6 million.
Good promotion is key, said Greg Castronuovo, VP of marketing for World Wrestling Federation Entertainment. He said “Wrestlemania X-Seven” brought in more than $26 million last April 1, while movies and music in particular lag way behind. Top music draws in 2001, Destiny’s Child and Eminem (who at least one MSO, Cox Communications, refused to promote at all), each earned a little over $600,000. That’s a drop in the bucket by comparison.
“Most people do PPV as an aftermarket thought, while PPV is the primary driver of our business,” Mr. Castronuovo said. “We do nine hours of programming a week and back that up with promotions and marketing all aimed at driving customers to PPV.”
The Showtime study suggests the market for PPV is one of the winners of the digital conversion. The benefits are twofold: Buyers of PPV in an analog world became better customers in a digital one, and digital gains fans-especially in the areas of movies and adult entertainment.
Responding to that growth, The Playboy Channel introduced three new services in the past few months while expanding “Night Calls 411” and “Sexcetera,” which attract an audience that is 40 percent female. A spokesman for the Playboy Channel attributes much of the growth to the ability of digital cable to offer what’s known as “near video-on-demand,” or NVOD-which repeats shows as often as every 30 minutes on multiple digital channels.
Likewise, Joe Boyle, VP of communications for iN Demand, says the company’s NVOD offerings have “drastically” increased customer use.
“We’re feeling the love a little more now than we have over the years,” he said. “It was hard to market a business when you only had one channel and it had to showcase everything from boxing to movies to WWF wrestling. Now that we can offer more options, we don’t feel so ignored.”