Tyson Fight Leads Big PPV Jump to $2.5B

BY JON LAFAYETTE

Revenue generated by pay-per-view programming jumped 19% to $2.5 billion in 2002 thanks to the continued increase in the number of digital cable homes, according to Showtime Pay Per View.

The increase in digital penetration helped drive up buys for movies and adult programming by making more of each available to subscribers. But the biggest draws in pay-per-view remained special events.

The top event in pay-per-view was the June 8 Lennox Lewis-Mike Tyson heavyweight fight, which rang up a record $106.8 million. It was jointly distributed by erstwhile rivals Showtime and HBO.

Cable operators should be hoping Tyson packs a punch in this weekend's match against Clifford Etienne. Should Tyson win, he could fight again this year, creating another big payday for the PPV business, said Mark Greenberg, EVP of Showtime Networks. ?Mike looking good would help,? he said.

Showtime is showing the fight both on its pay channel and through PPV. Greenberg said there are more events available than ever before via pay-per-view and operators no longer have people dedicated to marketing PPV events. That makes it harder to guarantee a return on an event and makes using the event to enhance the premium channel's value more appealing, he said.

Most of last year's 228 PPV events (up from 156 in 2001) were relatively obscure, drawing fewer than 100,000 buys. Those events ranged from soccer games, rodeos and concerts to psychics and William Shatner's Spplat Attack.

Besides boxing, the biggest draws remained WWE wrestling events, topped by Wrestlemania 18 in March, which Showtime estimates drew $28 million.

Overall, event revenue rose 26% to $363 million.

Revenue from PPV movies was $1.5 billion, up from $1.2 billion a year ago. According to In Demand, the most-ordered titles included Shallow Hal, American Pie 2, Training Day, Jurassic Park III, The Fast and the Furious and Ocean's Eleven.

Showtime's Greenberg said the introduction of VOD has not yet had an effect on movie buy rates. VOD could end up a good business for cable operators, but he noted that, as with PPV, it is unlikely to exceed the value of their premium channel revenue, which is about $10 billion. He said that operators and programmers shouldn't be anxious to give away content via VOD, because ?consumers are willing to pay for it,? although how much remains a valid question.

Greenberg said operators, programmers and distributors had to work together as VOD rolls out to avoid destroying the PPV business. ?There's too much money to lose,? he said. ?We need to find a way to motivate all parts of the business? to build it up.

Also benefiting from a wider array of offerings is the adult business, which grew to $609 million from $529 million in 2001. For operators, adult PPV attracts an increasing number of buys without much marketing or promotion, Greenberg noted.

Pay-per-view revenue was up for both satellite and cable. Satellite PPV revenue was $1.4 billion, up 15%, while cable's revenue was up 25%, to $1.1 billion. Pay-per-view revenue per cable household grew 28%, to $34.57, while PPV revenue in satellite households rose 6%, to $73.11.