PPV Wrapped Decade on a Roll

Author:
Publish date:

Bolstered by a record-setting 1999, the pay-per-view
industry nearly topped the $8 billion mark in total revenue for the decade, establishing
itself as a major revenue source for the industry now and in the future, according to a
Showtime Event Television report.

In a change from its annual PPV year in review, the company
instead looked at PPV's decade-long performance, during which the industry generated
nearly $8 billion in revenue.

More than one-half of that was generated since 1997, when
the industry first reached the $1 billion annual mark. In 1999, the industry generated a
record $1.9 billion in PPV revenue.

"Of the nearly $8 billion generated from PPV, 25
percent of it came in 1999 alone," SET PPV executive vice president and general
manager Mark Greenberg said. "This is an industry that is really coming of age."

The majority of PPV revenue throughout the decade was
generated from movies. The movie category pulled in about $3.8 billion during the 1990s,
according to the report.

PPV events closely followed with $2.7 billion. With an
average of about 125 events per year, annual event revenue rose by 700 percent over the
course of the decade, culminating at $486 million in 1999, Greenberg said.

Boxing and wrestling accounted for more than 90 percent of
event revenue, generating $1.36 billion and $1.1 billion, respectively, for the 1990s.

After struggling throughout the mid-1990s, the PPV-music
business finished strong, earning about $13 million in 1999 and $83 million during the
decade. "Music is an opportunity that the industry should explore further,"
Greenberg said.

Adult programming -- which really didn't begin
generating significant sales until 1993 -- pulled in about $1.4 billion by the end of the
decade, according to the report.

Much of the PPV-revenue increases during the 1990s can be
attributed to the growth of addressability -- both on the cable and direct-broadcast
satellite sides -- as well as the increase in available PPV channels.

The percentage of basic-cable homes with addressable
converters -- enabling impulse ordering -- increased an estimated 62 percent over the
decade to its current level of 47 percent. Add the approximately 10.2 million DBS
households, and more than 40 percent of U.S. television households have some form of
addressability, Greenberg said.

Those addressable households also have an average of 6.1
PPV channels to choose from -- more than triple the number at the beginning of the decade.
As a partial result, more than 41 percent of all addressable homes ordered on PPV in 1999.

"By the end of next year, close to 50 percent of
television households will have some form of addressability," Greenberg said.
"Add to that the steady increase of [PPV usage] within those households, and it will
certainly help to further build the category."

Greenberg cautioned that the industry should look to develop event franchises other than
boxing and wrestling in order to help maintain its current growth.

He pointed out that 12 of the top 13 highest-grossing PPV
events of all-time featured boxers Mike Tyson and/or Evander Holyfield. With both of those
fighters nearing the end of their careers, Greenberg questioned whether any other marquee
fighters could match their PPV successes.

"Do the [welterweight champion Felix] Trinidads or the
[welterweight champion Oscar] De La Hoyas, or even [unified heavyweight champion Lennox]
Lewises, have enough to generate significant revenues on the scale of Tyson and
Holyfield?" Greenberg asked rhetorically. "There are other events and other
franchises that have potential growth that the industry should be looking at."

Greenberg hasn't given up on setting up a
research-and-development fund to determine how to create successful PPV-event genres
beyond ring sports, even though Viewer's Choice has taken the lead in developing new
and cable-exclusive PPV events through its new In Demand Entertainment division.

Related