Billion $ baby: PPV revenue skyrockets

The pay-per-view industry this year will eclipse the $1 billion mark in collective revenue for the first time, according to an annual PPV industry overview presented Wednesday by Showtime Event TV (SET).

SET, which specializes in heavyweight boxing events (including all of Mike Tyson’s fights since his release from prison), estimates that gross PPV revenue this year will come to almost $1.27 billion. Movies account for $603 million of that total, with special events comprising $413 million and adult services an additional $253 million.

“This makes 1997 a true watershed year for pay-per-view,” SET executive VP Mark Greenberg said. “When you consider that our business accounted for just $64 million 10 years ago, that’s pretty impressive growth.”

Indeed, PPV revenues have more than doubled since 1994 alone (accounting for $467 million a mere three years ago). And SET estimates that the tally will leap to nearly $1.7 billion in 1998.

The reasons for the huge recent increases are two-fold, the SET survey finds. One is the jump in addressable homes able to receive PPV programming, from 21.5 million in ’94 to 28 million (or 43% of the cable universe) in ’97.

Perhaps even more significant has been the addition of direct broadcast satellite services to the pay equation over the past three years. Rather than the handful of PPV channels, DBS service DirecTV boasts 61 pay channels, Echostar 20 and Primestar 15. Also, the DBS household — considered a more “high-end” user — purchases pay movies and events in extraordinary numbers.

More than a third of DBS homes purchase movies on PPV during any given month, compared with only 7% of cable subscribers.

The PPV business also gets a huge uptick every time Tyson steps into a boxing ring. The June 28 heavyweight title rematch between Tyson and Evander Holyfield accounted for a record $100 million in PPV revenue, or about 8% of the total of all pay receipts for the year. That number also accounts for 23% of all PPV revenues in the events category in 1997 — all tallied in a single night.

“Mike Tyson continues to carry an allure that transcends the sport of boxing,” Greenberg said.

Unfortunately, with Tyson’s disqualification in the Holyfield fight for biting, and subsequent suspension from the sport for a year, the odds on his contributing to the PPV take again next year would appear remote.

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