Events Still Down for the Count - Multichannel

Events Still Down for the Count

Author:
Publish date:

After the June 2002 Lennox Lewis-Mike Tyson fight earned a record $106 million in pay-per-view revenues, many industry observers predicted a much-desired revival of the PPV event category.

Even though cable operators were preoccupied with digital cable, video-on-demand and high-speed data, the industry still found a way to convince nearly 2 million subscribers to dish out a record $55 for a one-time-only PPV event.

By the end of the 2002, though, it was clear that the category couldn't sustain the euphoria created by Lewis-Tyson. The big bout alone accounted for nearly one-third of the event category's disappointing $363 million take of total revenues.

Further, the category's staples — boxing and professional wrestling — accounted for 94 percent of 2002's PPV-event revenue total, even though operators offered nearly three times as many non-ring events.

Unfortunately, very few of those concerts, comedy performances or psychic shows were compelling enough to entice a significant number of viewers to push the PPV order button on their remote control.

While new technologies such as VOD and near-VOD have driven the PPV movie business to record-setting revenue heights — and adult PPV content remains a consistent industry cash cow — the event business has yet to find a genre that brings home the bacon on a regular basis beyond boxing and wrestling.

Such special events require a major, long-term financial comment from event distributors to help build awareness and interest among fickle consumers.

But with performers' demands for high, up-front financial guarantees, operators' insistence on adhering to the traditional 50/50 revenue splits and MSOs unable or unwilling to aggressively promote all but the biggest shows, most event providers are scared off from taking the financial risks necessary to build alternative PPV franchises. Instead, the majority of events available today are either big-ticket boxing and wrestling events — which are becoming more and more limited as longtime PPV draws Lewis, Tyson, Evander Holyfield and Hulk Hogan grow older — or ultra-niche shows.

As the industry begins to roll out such advanced services as subscription VOD, HDTV channels and digital tiers, the PPV-event category faces a real danger of permanent relegation to the back burner. Operators instead may dedicate the vast majority of precious local ad avails, barker channels and other promotional resources to other incremental revenue streams.

At some point, the PPV event category will have to decide whether to take the necessary risks to draw differentiated and compelling marquee events, or to continue to rely on the whims of boxing promoters and pro-wrestling story writers for the lion's share of its earnings.

Related