Satellite PPV buy rates skyrocketing

NEW YORK — DirecTV, Primestar and other satellite distributors have developed into a revenue-generating dream for the major studios, who have harvested almost a tenfold increase in pay-per-view movie buys from home dish owners in just two years.

These DBS (direct broadcast satellite) companies “are giving the industry hard evidence that pay-per-view works when it’s done correctly,” said Ed Bleier, president of domestic cable and network features for Warner Bros.

Bleier, speaking during a panel discussion on programming strategies at the Kagan Digital TV Summit, was reacting to the latest Paul Kagan Associates statistics, which show that the revenues from PPV movies in satellite-dish homes shot up from $21 million in 1994 to $202 million in 1996. By comparison, cable households increased their PPV movie buys from $157 million in ’94 to $215 million last year.

Kagan’s projections for the year 2006 estimate that PPV movies will be reaping $820 million from DBS homes and $1.4 billion from cable homes.

In a separate category, adult movies “are a vibrant business — they’re bringing in more money than anybody cares to talk about,” said another panelist, Larry Gerbrandt, senior analyst for Kagan. Buy rates for adult movies will more than triple over the 10-year span in both cable and DBS, swelling from $210 million in 1996 to $665 million in 2006.

Gerbrandt said the increases in buy rates for PPV events like prizefights, wrestling exhibitions and music concerts will parallel the growth of movies, leaping from $412 million in ’96 to $2.1 billion in 2006 (for both cable and DBS).

But even though these numbers appear to be a sign of healthy growth, Bleier says they don’t stack up well “when put in the context of homevideo, which is now a $16 billion business. Homevideo has become the primary source of funding for the movie industry.”

Pay-per-view is small potatoes in this comparison, a fact, Bleier said, that will keep the studios from making their movies available to DBS and cable sooner than the span of between four and eight weeks that now elapses before the video store surrenders its exclusivity to PPV.

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