Four months into the new millennium, the pay-per-view event industry seems to be moving back toward the future. How else can one explain how the industry could go from generating a record $206 million in the first quarter last year to a paltry $61.5 million in first-quarter 2000?
Of course, the first three months of 1999 were nirvana for the industry, with three boxing matches that generated more than $30 million each and a record-breaking World Wrestling Federation Wrestlemania event.
The industry may never again earn that much revenue in a six-month period, much less a quarter.
But that doesn't completely justify the poor early start to 2000, which, according to Showtime Event Television, is a slower start than the first three months of 1998. That year ended up with the worst event-revenue drought since 1995.
It's not like there was a major difference in the number of events held. There were only seven more events in first-quarter 1999 than this year, yet 1999 generated 70 percent more revenue.
A closer look reveals that the major difference between the two years is the high-profile nature of the events that took place. There's a big difference between the revenue generated from the Mike Tyson-Frans Botha, Oscar De La Hoya-Ike Quartey or Lennox Lewis-Evander Holyfield fights-all of which appeared in the first quarter last year-and this year's biggest event to date, SET's March Felix Trinidad-David Reid match.
Unfortunately for the industry, those types of fights are few and far between. Even more troubling for operators, the industry has been unable to fill the downtime between such big-ticket events with enough middle-range offerings to help fill the revenue void.
Fortunately for the industry, help is on the way. The World Wrestling Federation's successful April 2 Wrestlemania event and TVKO's Lennox Lewis-Michael Grant fight will go along way toward making up some ground on last year.
June's De La Hoya-Shane Mosely, a second Lewis fight and potential bouts featuring Holyfield and Tyson may actually get the industry close to last year's record $486 million take.
But what happens when Tyson and Holyfield finally retire? What if De La Hoya decides to take up singing full time instead of boxing? What if subscribers don't find Lewis or the new crop of up-and-coming fighters compelling enough to push boxing event buys beyond the 1 million-buy level? What happens if Vince McMahon decides his new pro-football venture, the XFL, is more important than the WWF?
Beyond movies, the industry hasn't created a programming genre that can consistently attract viewers. With video-on-demand on the horizon, the ability to watch broadcast shows and specialty programming from a video server may generate significant revenue for operators.
Until the industry finds a way to nurture the various concerts, niche sports programs and other small PPV events, however, it will always be at the whim of the unpredictable boxing industry and stable but controversial pro-wrestling business.