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Another View: 1998: A Year to Forget for PPV

Pay-per-view observers didn't think the lost year of1998 could get any worse. But for many operators around the country, December is bringingmore insult to injury.

Unusually warm December weather has kept subscribersoutside of their homes and away from their remote controls. In a month when operators --anticipating that people will stay indoors to avoid the cold -- are offering some of thetop box office hits of the year, subscribers are instead walking on the beach or playingin the park rather than sitting at home buying PPV.

Cable operators from Maine to New York to Chicago toVirginia are reporting buy-rates that are down by as much as 10 percent to 15 percent onmajor titles such as Titanic, Deep Rising, He Got Game, City of Angels, Lost In Spaceand The X Files.

These titles, along with late December releases like QuestFor Camelot, Small Soldiers, Deep Impact, Armageddon and Hope Floats weresupposed to provide operators with one last opportunity to save face in a year that sawoverall PPV revenues increase only by a mere 5 percent over 1997 numbers.

Instead, for many operators -- especially those on the EastCoast -- the sunshine is raining on their already soggy PPV parade. Ironically, with theevent category falling an incredible 40 percent below last year's numbers -- due tothe lack of major PPV fights -- the only good revenue news in 1998 came from the movie andadult side.

Paced by an increase in PPV channels and the rollout ofdigital near video-on-demand technology, movie revenues will reach the $344 million markin 1998, up from $283 million last year. That's in the face of the expansion of home videowindows and the more recent development of early windows that require upfront buy-rateguarantees, which are aimed largely at benefiting DBS services.

And with a December PPV movie lineup that featured moviesgenerating over $1 billion in box-office revenue -- Titanic, Armageddon and DeepImpact alone pulled in $935 million combined -- operators were hoping to createmomentum going into its event-packed first-quarter lineup.

The recent announcement of Showtime Event Television'sJan. 16 Mike Tyson-Frans Botha fight and TVKO's March 13 Evander Holyfield-LennoxLewis bout are the main events in the early 1998 lineup, which all but guaranteesoperators a shot at topping last year's total event revenue take within three months.

Unfortunately, Mother Nature has been as unreliable foroperators this year as Tyson, Holyfield and De La Hoya.