Pay-per-view (PPV)

What is pay-per-view?

Pay-per-view (PPV) is a type of television broadcasting service where the viewer pays for the programs they watch. This model is prevalent in live event broadcasting, especially with sports, concerts, and special programming.

Origins of pay-per-view

The concept of pay-per-view has its roots in the mid-20th century. The advent of cable television in the 1950s paved the way for this unique business model. However, it wasn't until the 1980s that pay-per-view gained traction due to the rise of home satellite dishes and the increasing popularity of boxing matches.

One of the first major pay-per-view events was the "Thrilla in Manila" boxing match between Muhammad Ali and Joe Frazier in 1975. This event set the stage for the future of pay-per-view broadcasts, demonstrating the potential for significant revenue generation.

How pay-per-view works

The technical aspect

Pay-per-view operates on a simple principle: the viewer pays a fee to access a specific program or event. This is typically facilitated through a cable or satellite provider. The provider broadcasts the event on a specific channel, which is only accessible to those who have paid the fee.

From a technical standpoint, the provider uses encryption to prevent unauthorized access to the channel. Once the viewer pays the fee, the provider sends a signal to the viewer's set-top box to decrypt the channel, allowing the viewer to watch the event.

The business model

The pay-per-view business model is based on revenue sharing. The event promoter, the broadcaster, and the cable or satellite provider all share in the revenue generated from the event. The percentage of revenue each party receives varies depending on the agreement between the parties.

Pay-per-view events often generate significant profit. For instance, the boxing match between Floyd Mayweather and Manny Pacquiao in 2015 reportedly generated over $400 million in pay-per-view revenue, making it one of the most lucrative pay-per-view events in history.

Significance of pay-per-view today

Pay-per-view continues to play a significant role in today's media landscape. It remains a popular choice for broadcasting live combat sports events. Major boxing matches, mixed martial arts events, and professional wrestling events are often broadcast on pay-per-view.

However, the rising popularity of streaming services has brought about a shift in the pay-per-view landscape. Services like Netflix and Amazon Prime Video operate on a subscription model, where viewers pay a monthly fee for access to a library of content. This model has become the standard for media recently, leading to a decline in traditional pay-per-view viewership.

Despite this, pay-per-view remains a viable option for certain types of content. In particular, Live broadcast events continue to draw large pay-per-view audiences. The immediacy and exclusivity of these events make them well-suited to the pay-per-view model.