The pay-per-view event category thrived in the ’90s with a combination of boxing and pro-wrestling events, top-flight concerts and comedy shows. But as pay TV entertainment events have diminished, the business now relies on boxing, the Ultimate Fighting Championship and pro-wrestling events from WWE.
Throughout a decade at PPV distributor In Demand, senior vice president of programming and business development Mark Boccardi has witnessed the changes and, in an interview with Multichannel News programming editor R. Thomas Umstead, spoke about how the PPV event category might find ways to diversify beyond ring sports.
MCN: What has happened over the past two decades that has constricted the PPV-event category to mostly boxing, wrestling and mixed-martial-arts content?
Mark Boccardi: I think it’s really a technological revolution that has changed the consumption of transactional content here in the United States. I also think the proliferation of niche cable channels has taken content that used to be popular on a transactional basis. So if you’re a fan of a specific genre, like music, you can go to specific channels and get that content. If you like watching live concerts, pay-per-view and video-on-demand used to be one of the only places you could get it. Well, guess what? Now there are Palladia, Fuse, MTV and the niche MTV networks where you can go and get it.
Compound that with the proliferation of the Internet, where you can get all this content for free. If you go to YouTube and name any popular musical act, you can pretty much see almost anything you want from that live act, whether it be a concert, a music video or a one-song performance. The one thing that hasn’t changed, though, is pay-per-view remains to this day the go-to place for big, premier live events, particularly ring-sports events. The platform is still alive and vibrant for that category really unlike any other.
MCN: What is it about the transactional ring-sports events that makes pay-per-view the place to showcase the biggest events in those genres?
MB: I don’t see any other way that collectively the industry — meaning the promoters, athletes and distributors — can earn as much money as they can through a big pay-per-view event. If you look at the amount of money that a really big event generates in gross retail, you’re talking $50 million in one night. That’s a big event. A mega-event could be two or three times that. Name one other platform or distribution method where you can generate that much revenue in one five-hour period.
While there is more boxing and UFC programming on network and cable TV than there’s been in a long while, none of those networks are going to offer the kind of money that these promoters can earn in one night on pay per view. Economically, this is the most viable platform for offering a big event.
MCN: If that much money can be made on a onenight event from a sports standpoint, what’s stopping a musical act or a comedy act from doing the same thing? Why aren’t we seeing the same type of return for those events?
MB: Well, if I want to see a Lady Gaga concert, there are probably a number of places I can go to right now and watch it for free, whether it’s legal or illegal. I can go on the Internet and basically get it now. And when a musician is on tour, their show from night to night doesn’t really change that much. When you have a live ring sports event, it’s a sport. You have to see it live. You don’t know what’s going to happen. So you still have that aspect of the big pay-perview event. It’s not something that you want to watch tape-delayed, it’s not something that can be tape-delayed.
You have to watch it live; you want to watch it live, you want to be part of the conversation the next day with your friends. You want to watch it live with a group of people, which by the way is the most popular way to watch a big pay-per-view event. So I think it’s comparing apples and oranges.
If I go online now and I watch an old Floyd Mayweather fight, I’m not going to get my fix if I know in a couple of months [that] he’s going to fight someone else. I want to see that fight live. But if I watch a Dave Matthews concert right now on my computer here on YouTube, I kind of have my fix. I don’t need to go watch him perform that same show live, two weeks from now, on pay-per-view.
MCN: Given that dynamic, where do we go with events on pay-per-view, or have we hit the ceiling in terms of what pay per view can deliver from an events perspective?
MB: I certainly don’t think we have hit the ceiling. I think there’s certainly more room for growth. We are always out mining for new programming opportunities, and many of those are extensions of ring sports.
Just this past weekend, we aired a Glory kickboxing event on pay-per-view for the first time. We have had Ring of Honor wrestling live for the first time. We have a few other new programming partners coming up in the next few months that we’re going to be doing live for the first time. We did our first Bellator [mixed-martial-arts] live payper- view show a few weeks ago. So we are certainly always looking for new opportunities. Ring sports is just sort of the natural, and it’s where there is the most success right now.
But we are also looking outside of ring sports too. We carried a live Rolling Stones concert in 2012, and that was a success on pay-per-view. In just a few weeks we’re going to be airing something very different … we’re going to be doing a rap battle live on pay-perview [the July 12 Eminem and Shady Present: Total Slaughter]. That’s very different than what we’ve done before. We did a PBR [Professional Bull Riders] event several years ago on pay-per-view. They were thrilled with it and they would love to do another one. So we’re always out looking for new opportunities. Our door is always open. We’re out calling people, and we’re fielding calls all the time. We certainly haven’t hit the ceiling, especially given some of these events that I think that would work on pay-per-view.
MCN: What’s the mindset of distributors when you’re knocking on their door to sell a particular pay-perview event? Do they still see pay-per-view as a vehicle for delivering not only live content, but also revenue?
MB: We have been continuously told by distributors that live pay-per-view events remain a very important revenue source for the industry, so much so that they dedicate tens of millions of dollars every year in marketing, promotion and support against these pay per view events. So they absolutely have a financial stake in the success of the events and they believe in them so much that they put a significant amount of marketing assets against these live events. Along with the VOD and the movie-on-demand business, the pay-per-view event business collectively remains a priority for all the distributors.
MCN: You mentioned the live Eminem hip-hop show — are there any other genres that lend itself to a potential pay-per-view event down the line?
MB: Yes, live big-name comedy remains something that we look at and the goal there is to try to do one or two big ones a year. We did Steve Harvey [in 2012] and we did a Lewis Black show last August live on payper- view. We’re having some discussions now with big name talent regarding live comedy pay-per-views. So that remains one genre that we’re optimistic about.
Music is still an opportunity. If the right band or the right artist comes along, it still could work transactionally on a live pay-per-view basis. So we’re certainly not going to look the other way [at concerts], it’s just that the whole dynamic has changed from when music used to be a real driver of revenue to now for all the reasons that I mentioned earlier.
MCN: How do you assess the first six months of 2014 from a PPV-event perspective?
MB: Thus far, the year has gone as planned. We had some very good dialogue with all our pay-per-view programmers, so we had a good outlook on the first half of the year and it’s pretty much mapped out as we had expected. The second half of the year is going to be characterized, I think, by being a very busy period. The summer tends to slow down a little bit, notwithstanding the [July 5] UFC event and then [Showtime’s July 12 Canelo Alvarez-Erislandy Lara fight] and the Eminem rap show the following weekend.
Starting in mid-September and then through the end of the year, what we have on tap for now at a minimum is the Floyd Mayweather fight on Sept. 13 with an opponent that’s still to be determined. Then, we’ll probably have somewhere between two and four additional big boxing events. We know Manny Pacquiao is expected to fight Nov. 22. We’re told that [Miguel] Cotto will fight again before the end of the year on pay-per-view.
The results of UFC’s [July 5 event] will trickle down and influence what happens the rest of the year with Chris Weidman and Ronda Rousey on that card. So you’ll have some big pay-perview events towards the end of the year. You have their heavyweight champion, Cain Velasquez, coming back in November. You have John Jones now confirmed to fight Alexander Gustafsson in a rematch of one of the best fights of the last few years in the fall as well. So things are starting to line up nicely for a very busy, as I mentioned, mid-September through the end of the year.
MCN: How much of an effect has the new, over-the-top WWE Network had on the performance of WWE events?
MB: The honest answer is I didn’t know what to expect going in. I really didn’t. And I think there are those who thought that the pay-per-view business wouldn’t really be impacted. There are those who thought that there would be nearly a 100% cannibalization. And you had a wide range of opinions not only in the industry, but in this company as well. I think at this point the results are what they are and we’re living with it and managing it as we go forward. But I don’t know if I would necessarily characterize it as a big surprise, just because this was really unknown territory, so we were all experiencing it for the first time.
MCN: And as of right now, there are no plans to discontinue the carriage of these pay-per-view events?
MB: Right. I think that statement we’ve put out before still is 100% accurate.
MCN: So in everything that we’ve covered here, is there anything that I missed that you may want to add?
MB: I think the impact of the changes at [boxing promoter] Golden Boy will end up being positive for the pay-per-view business because I think this will open up new opportunities for fights that probably couldn’t have happened had the same management structure remained in place at Golden Boy. So based on everything that we hear [Golden Boy CEO] Oscar de la Hoya saying, we are very optimistic that this opens up potential fights that otherwise wouldn’t have been possible before. It certainly doesn’t change anything with respect to a Mayweather-[Manny] Pacquiao fight because Mayweather has moved off on his own with Mayweather Promotions, but as far as Canelo Alvarez, who is really the prized piece of Golden Boy, I think it does open up some really good opportunities. We are optimistic that that’s one more piece of the puzzle to help the pay-per-view boxing business to continue to thrive.
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