News

Another View: Ops Need Life Beyond Old Reliables

11/29/1998 7:00 PM Eastern

Despite a decrepit showing from boxing in 1998, the
pay-per-view events business will limp into next year having avoided the category's worst
revenue performance in the 1990s.

In fact, 1998 event revenue, paced by the resurgent
wrestling category, will finish with the third-highest total so far this decade.

And with four of PPV boxing's biggest draws ever —
Evander Holyfield, Mike Tyson, Oscar De La Hoya and George Foreman — scheduled to
fight in early 1999, PPV has a chance to jump out of the starting gate early, and possibly
even to eclipse last year's record $400 million take, according to estimates from Showtime
Event Television.

Nevertheless, the struggles of 1998 exposed some enormous
weaknesses of the once-ironclad cash-cow events. Many operators found out the hard way
that events are not sure redline items in their budgets.

Tyson, Holyfield, Foreman, Julio Cesar Chavez and, more
recently, De La Hoya have spoiled operators by providing the industry with one
record-setting bout after another. Then, when they all disappeared this year, names such
as "Stone Cold" Steve Austin, "Hollywood" Hulk Hogan and The
Undertaker took over and brought operators silver, if not gold, to stuff into their PPV
coffers.

But what worries some operators is: What will fill the void
if there's a simultaneous lull of superstar talent from both boxing and wrestling? What
will operators bank on to support PPV-event budgets?

Today, the answer is nothing. No other genre has proven to
be a consistent revenue performer and, sadly, very little is being done to nurture other
events outside of ring sports.

While the industry offers nonring sports, they barely
register a blip on the PPV-revenue scope. The "other" event category represented
nearly 50 percent of all PPV shows distributed in 1998, but only 3 percent of the
revenues, according to SET. In contrast, the music category cut only a 16 percent share of
the event-distribution pie, and it contributed 4 percent of the revenues.

Yet until the crisp audio sound and sharp picture quality
that digital technology delivers is featured in a majority of cable homes, the PPV-music
business will always sing backup to the lead of ring sports.

And unless some aggressive entertainment entrepreneur
decides to take a major financial risk and allow PPV the first TV window to a Broadway
show, or until one is willing to create a PPV-exclusive franchise, the industry's fate
will hang precariously on the performance of the unpredictable ring-sports genre.

Rainbow Media Holdings Inc. will try to create a new niche
with events from Radio City Music Hall and Madison Square Garden, but more needs to be
done to cultivate diverse offerings.

Mark Greenberg, Showtime's executive vice president of
corporate strategy and communications, suggested that the industry should establish a
research-and-development fund to determine ways to make nonring events viable for PPV.
Beyond that, there needs to be an overall philosophical change in the way that the
industry perceives PPV.

If operators believe that the industry is only as good as
the next boxing or wrestling match, then they will never take the time or spend the
marketing dollars to support events that have yet to break through.

Operators may feel that an auto race or an opera lacks mass
appeal, but they won't know unless some effort is put behind getting the word out about
that event. The classic cable-viewer profile is beginning to change quickly — as are
the tastes of the viewing public — so what may not have worked five years ago may
actually generate some revenue this time around.

What the industry does know is that it cannot continue to
rely on boxing and wrestling to carry its PPV-event business every year.

November

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