Pay-per-view (often abbreviated PPV) is the system in which television viewers can purchase events to be seen on TV and pay for the private telecast of that event to their homes. The event is shown at the same time to everyone ordering it, as opposed to video on demand systems, which allow viewers to see the event at any time. Events can be purchased using an on-screen guide, an automated telephone system, or through a live customer service representative. Events include feature films, sporting events, and pornographic movies.
Pay-per-view began becoming popular when the NBA's Portland Trail Blazers began using the system after winning the championship in the 1977 season. During that time, it was operated on a few pay-TV services such as Z Channel, SelecTV, and ON-TV in select markets throughout the 1980s.
The first major pay-per-view event occurred on September 16, 1981, when Sugar Ray Leonard fought Thomas "Hitman" Hearns for the Welterweight Championship. Viacom Cablevision in Nashville, Tennessee, was the first system to offer the event and sold over fifty percent of its subscribers for the fight. Leonard visited Nashville to promote the fight, the event was such a success that Viacom's Annual Report that year was themed around the fight. Viacom's Marketing Director was Pat Thompson who put together the fight and subsequently put together additional PPV fights, wrestling matches, and even a Broadway play.
After leaving Viacom, Thompson became head of Sports View and produced the first pay-per-view football game on October 16, 1983, Tennessee versus Alabama from Birmingham, Alabama. Sports View was instrumental in building pay-per-view networks and was the early pioneer in developing TigerVision for LSU, TideVision for Alabama, and UT Vol Seat for Tennessee. Sports View also produced the Ohio State-Michigan Football game on PPV in November 1983.
In 1985, the first U.S. cable channels devoted to pay-per-view, Viewers Choice, Cable Video Store, and Request TV began operation within days of each other. Viewers Choice was available to both home satellite dish and cable customers, while Request TV was available to cable viewers but would not be available to dish owners until the 1990s.
However, the term "pay-per-view" wasn't widely used until the 1990s, when companies like iN DEMAND, HBO, and Showtime started using the system to show movies and some of their productions. In Demand would show movies, concerts, and other events, with prices ranging from $3.99 to $49.99, while HBO and Showtime, with their legs TVKO and SET Pay Per View, would offer championship boxing, with prices ranging from $14.99 to $54.99.
ESPN has shown college football and basketball games on pay-per-view. The boxing undercard Latin Fury, shown on June 28 2003, became ESPN's first boxing pay-per-view card and also the first pay-per-view boxing card held in Puerto Rico. Pay-per-view is also a very important revenue stream for professional wrestling companies like World Wrestling Entertainment (WWE) , Total Nonstop Action Wrestling (TNA) , Ring of Honor (ROH) and Asistencia Asesoría y Administración.
Ultimate Fighting Championship (UFC), a relative newcomer on the pay-per-view scene, "matched the once-dominant World Wrestling Entertainment Inc. in pay-per-view revenues during 2006 and surpassed boxing-titan HBO. The three companies make up the bulk of the pay-per-view business." According to Deana Myers, a senior analyst at Kagan Research LLC that tracks the industry, "UFC has reinvigorated the pay-per-view category.
In 2007, UFC officially took over as the "king of pay-per-view". Of the 15 biggest PPV events of 2007 in North America, UFC had eight, four for boxing and three for World Wrestling Entertainment.
But 1999 was very different than 2006. 1999 was the year of De La Hoya-Trinidad (1,400,000 buys), Holyfield-Lewis I (1,200,000), Holyfield-Lewis II (850,000), and De La Hoya-Quartey (570,000). By contrast, the only pay-per-view mega fight in 2006 was De La Hoya-Mayorga (925,000 buys). Rahman-Maskaev was a bust with under 50,000. The other eight PPV cards last year were all in the 325,000-450,000 range. Pay-per-view fights in that range almost always generate more money for the promoter and fighters than HBO is willing to pay for an HBO World Championship Boxing license fee.
In May 2007, the Oscar De La Hoya VS Floyd Mayweather Jr. fight on HBO PPV not only became the biggest selling non-heavyweight title fight of all time, but the biggest of all time period, with 2.5 million buyers. The fight itself generated roughly $134.4 million dollars in domestic PPV revenue, making it the richest prizefight of all time. In December 2007's Floyd Mayweather Jr. VS Ricky Hatton fight is on-track to sell well over 1.5 million PPV buys, making Mayweather the only non-heavyweight fighter of all-time to sell two million-plus selling PPV bouts in one calendar year.
The leading PPV seller is Oscar De La Hoya, who has sold approximately 12.8 million units total, giving $612 million in domestic television receipts. In third place in buys is Evander Holyfield, with 12.6 million units ($543 million), and in second in Mike Tyson, with 12.4 million units ($545 million).
HBO Sports President Ross Greenburg calls the expansion of pay-per-view "the biggest economic issue in boxing" and says, "I can't tell you that pay-per-view helps the sport because it doesn't. It hurts the sport because it narrows our audience, but it's a fact of life. Every time we try to make an HBO World Championship Boxing fight, we're up against mythical pay-per-view numbers. HBO doesn't make a lot of money from pay-per-view. There's usually a cap on what we can make. But the promoters and fighters insist on pay-per-view because that's where their greatest profits lie."
"It's a big problem," Greenburg continues. "It's getting harder and harder to put fighters like Manny Pacquiao on HBO World Championship Boxing. If Floyd Mayweather beats Oscar, he might never fight on HBO World Championship Boxing again. But if HBO stopped doing pay-per-view, the promoters would simply do it on their own [like Bob Arum did with Cotto-Malignaggi in June 2006] or find someone else who will do it for them."
Former HBO Sports President Seth Abraham concurs, saying, "I think, if Lou (DiBella) and I were still at HBO, we'd be in the same pickle as far as the exodus of fights to pay-per-view is concerned." (Credit SecondsOut: http://www.secondsout.com/usa/colhauser.cfm?ccs=208&cs=21089)
One of the earliest pay-per-view systems on cable the Optical Systems Channel 100, which first saw service in 1972 in San Diego through Mission Cable (acquired by Cox Communications) and TheaterVisioN, which ran out of Sarasota, Florida. These early systems quickly went out of business, as the cable industry adopted satellite technology and flat rate systems like Home Box Office became popular.
Digital cable subscribers also have similar capability by using the bidirectional capabilities of digital cable technology instead of a telephone line. Similar systems are in use by Sky Digital in the United Kingdom.
In Canada, Viewers Choice offers pay-per-view services through various Canadian satellite TV and digital cable television providers, including Rogers Digital Cable, Star Choice, and MTS. Prices range from $5.99 CAD for movies, up to $20 CAD or more for special events. (Ex. WWE and ECW pay-per-views, which usually cost $39.95 for normal 3-hour PPV's, and $49.95 for the 4-hour WrestleMania special.) Bell TV delivers its own pay-per-view service, Vu!, to its satellite subscribers. Prices range from $4.99 CAD up to $20 or more for special events. It also runs Venus, an adult pay-per-view service, to its satellite subscribers for $9.99 per movie.
Pay-per-view has also been introduced in Europe and many other areas of the world. In the UK, Sky's PremPlus (which last broadcast in 2007) and Sky Box Office services have proved popular with viewers.