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'02 Was Kind To PPV, VOD

While 2002 set some records for the pay-per-view category, industry executives still believe the genre has a long way to go.

PPV and video-on-demand movies, adult programming and events combined to generate an estimated $2.45 billion in revenue last year, 19.5 percent above the previous mark of $2.05 billion in 2001, Showtime Event Television said in its annual state of the industry report last week.

Movies continue to pace the business, up 18.5 percent from $1.24 billion in 2001 to $1.47 billion — more than half of all PPV revenue last year.

Showtime executive vice president of corporate strategy and communications Mark Greenberg said that multichannel digital PPV offerings generated the lion's share of PPV movie revenue, with a limited number of VOD households contributing a very small (but unspecified) amount to the pot.

Movie PPV revenue still pales by comparison to the $8.2 billion collected by video dealers in videocassette and DVD rentals in 2002, according to the Video Software Dealers Association.

That number was down from $8.4 billion in 2001.

The convenience of VOD should ultimately help the category, but Greenberg said operators need to aggressively market and promote the platform.

"Pay-per-view is changing and becoming an on-demand world," Greenberg said. "In that transition period, we have to make sure that we transition in an intelligent manner because there's too much money potentially to lose."

Twentieth Century-Fox's Shallow Hal
finished as the No. 1 PPV movie for 2002, according to In Demand, followed by Universal Pictures'American Pie 2,
Warner Bros.'Training Day
and Universal's Jurassic Park III
and The Fast and the Furious.
Rounding out the top 10: Warner Bros.' Ocean's Eleven, New Line Cinema's Rush Hour 2,
Warner Bros.' Harry Potter and The Sorcerer's Stone,
Miramax Films' The Others
and Columbia Pictures'Panic Room.

Adult PPV revenue rose 15.1 percent to $609 million in 2002 from $529 million in 2001, according to SET.

Events brought in $363 million in 2002, 26.9 percent above 2001's $286 million. The June 8 Lennox Lewis-Mike Tyson fight accounted for 29 percent of that, or a record $106 million, according to SET, which co-promoted the fight with Home Box Office PPV.

Boxing and wrestling combined for $343 million, or 94 percent of event revenue, despite being only 80 of 228 events.

DBS providers DirecTV Inc. and EchoStar Communications Corp. delivered $1.4 billion in PPV revenue to the category, versus cable's $1.1 billion take.

Satellite subscribers generated $73.11 per household in PPV revenue — much from subscription sports packages — versus $34.57 per cable subscriber for cable.

Overall, cable and satellite subscribers paid $29.54 per household on movies, $12.20 on adult product and $7.27 on events, all up from 2001.