Another View: PPV Movies Take 2Q Spotlight

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Lost in the euphoria of the first quarter'spay-per-view event-revenue gain has been the flat performance of PPV-movie revenue duringthe same period.

While operators reported increases of as much as 80 percentin event revenue over last year -- due mostly to the incredible wrestling category and theresurgent boxing genre -- some have reported falloffs of as much as 20 percent infirst-quarter movie revenue.

Although events represent the big-ticket hits thatoperators crave, it's the consistency of the movie business that keeps the PPVbusiness afloat.

That's why some industry executives are more than abit concerned about Hollywood's contribution to the PPV-revenue chest. Most point tothe lack of major titles filling PPV schedules in 1999 for the poor performance thus far.

But the second quarter already looks more promising, asseveral big box-office hits are set to premiere on PPV. Movies such as The Waterboy($158 million at the box office), Antz ($90 million), Ever After ($68million), The Rugrats Movie ($99 million) and You've Got Mail ($114million) should help to kick-start the genre after its sluggish start.

Most of the talk about second-quarter movie performance,however, surrounds the debut of Buena Vista's Waterboy.Not only is itthe biggest movie of the quarter, but it's the first movie for which Viewer'sChoice has paid an upfront guarantee for an early window.

Several industry executives were ecstatic to see theleading cable PPV network get off the bench and into the early PPV-window game by payingBuena Vista's 20 percent early window guarantee.

While the window is only extended to the approximately 1.5million digital-PPV homes, the fact that the network has decided to match competitorDirecTV Inc.'s aggressiveness in securing special PPV offers bodes well for theindustry.

But some industry observers aren't convinced that theearly window deal is necessarily the best move. First of all, the guarantee is steep: a 20percent buy-rate, even in a multichannel digital environment, is risky, even if somedigital operators are reporting buy-rates of upward of 30 percent on certain titles.

Also, the early window shaves 30 days out of the analog-PPVwindow, further devaluing a title that was already handicapped by a 73-day home-videowindow.

And from an industry perspective, providing a title like TheWaterboy to digital subscribers 30 days before analog viewers get it could cause moreconfusion in an already complicated landscape.

With so many systems offering PPV on different operatinglevels, it won't be unusual for a subscriber to get The Waterboy through adigital box this week (April 30), while a relative across the street, on another cablesystem, can't order the movie on an analog box until sometime in May.

With networks and studios both trying to put forth aunified PPV message to consumers, early window tests like The Waterboy could makethe task difficult.

At the same time, the industry can't sit back whileDirecTV continues to steal its best PPV customers by providing better value throughoffering earlier movie windows and exclusive PPV programming.

It should all make for a very interesting quarter.

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