WWF, Turner wrestle with PPV problems. (World Wrestling Federation; Turner Home Entertainment; pay-per-view television).

Multichannel News 12.n27 (July 8, 1991): pp3(2). (910 words) 

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COPYRIGHT 1991 Cahners Business Information
WWF, Turner Wrestle With PPV Problems

NEW YORK -- Despite declining buy-rates and competition from other pay-per-view events, operators say wrestling continues to provide them with a reliable stream of revenue.

Operators have expressed annoyance that wrestling leader TitanSports Inc. has jacked up its prices over the last few years, but even though buy-rates have slipped, operators say their gross revenues haven't suffered. They are worried, however, that rising prices and other market factors could kill the golden goose of wrestling.

Wrestling has been a staple for PPV since Titan distributed Wrestlemania I in 1985. In the years since, the Wrestlemania series, along with the WWF's other yearly events, such as SummerSlam, Royal Rumble and Survivor Series have generated high and, more important, consistent revenues for both operators and distributors.

Likewise, Turner Home Entertainment's World Championship Wrestling events have also performed consistently, though not on the level of the WWF. Operators can count on five WCW PPV events a year to generate steady revenues.

In fact, PPV wrestling accounted for approximately $72 million of the nearly $150 million generated by PPV events in 1990, said Sharon Sidello, vice president of PPV TV for Turner Home Entertainment.

In the last few years, however, buy-rates for both WCW and WWF events have fallen. For example, 1991's Wrestlemania VII generated a 3.5 percent buy-rate, down from 1990's Wrestlemania VI's 4.5 percent buy-rate in 1990 and Wrestlemania V's 5.6 percent buy-rate in 1989.

THE's Starcade series has also seen buy-rates fall from a 2 in 1989 to a 1.1 for last year's show, according to industry sources.

Some industry observers point to an expansion of the PPV addressable universe as a reason for the shrinking buy-rates. But some operators finger the increase in prices for the events, particularly the WWF shows, as the primary cause of the decline.

As buy-rates fell for Wrestlemania, the price rose from $24.95 for Wrestlemania V to $29.95 for Wrestlemania VI and VII. Similar patterns have occurred with SummerSlam (4.8 buy-rate at $18.50 in 1989, 4.3 buy-rate at $27.50 in 1990) and Royal Rumble (3.2 at $14.95 in 1989, 2.8 at $18 in 1990 and 2.2 at $22.50 in 1991).

Buy-rates for Turner's shows generally average between a 1 and a 2, sources said.

Some operators are concerned.

"They've had the steepest rise in price structure of any PPV events, and their events haven't suffered from lack of marketing," said one operator. "It may be much too steep for the marketplace to swallow."

But Dick Glover, senior vice president of business affairs and development for Titan Inc. said the buy-rate is not necessarily the most important barometer of success for an event. He'd prefer people zero in on revenues and the customer satisfaction rate.

"The revenues for our events have steadily increased, and consumer satisfaction has either increased or stabilized at a very high level," Glover argued. "We have seen absolutely nothing to indicate that price has decreased consumer satisfaction."

Nancy Anderson, PPV manager for Jones Intercable Inc., said that despite the falling buy-rates, revenues have remained the same because of increased retail prices. She cautioned, however, that continuing price hikes might ward off potential buyers, "and we'll end up losing money."

The increased number of events in the marketplace may also have affected wrestling buy-rates, said Bruce Karpas, president of Reiss Media Productions. "It's more of a reflection on everything that is going on in PPV," he said.

Karpas added that with so many boxing and other events for operators to market, wrestling doesn't enjoy the exclusivity it once had. "It's not the only game in town," he said.

Because of that, Ann Bojack, vice president of international and PPV operations for Titan, hopes that promotion for the WWF does not tail off. "We're just a major player in the PPV industry, and we just want the support from the cable operators," she said.

Skip Desjardin, manager of PPV marketing for Titan, said the WWF was disappointed by the industry's response to its marketing rebate program for Wrestlemania VII. The "E=MC$" marketing plan gave operators a 25-cent rebate per buy if systems used marketing materials provided by the WWF.

Less than 10 percent of the industry responded to the campaign. "The results are somewhat troubling," Desjardin said. "If they didn't fill out the forms, I just have to wonder why."

But Anderson admitted that with the surge of major boxing matches this year, WWF events "have been put in the background" in terms of marketing.

Karpas also said that wrestling, with at least nine events scheduled per year between THE and Titan, may finally be reaching a saturation point. "With a wrestling event almost every month, I think they are becoming less of a special event," he said.

Priscilla Reilly, manager of PPV services for Monmouth Cablevision, added that with all the exposure for professional wrestling on syndicated shows, the PPV events may not be as attractive. "I don't think people see it as an event anymore," she said. "They're not attracting the marginal followers of wrestling."

But THE's Sidello said 53 percent of THE's PPV audience watches 2 or more syndicated wrestling programs a week. "It's important for them to get their fix," she said.

As a result, buy-rates for THE's five yearly World Championship Wrestling events have been consistent, Sidello said. "We don't get the big (buy-rate) swings that boxing or concerts have," she said. "We have a large core audience that buys event after event."

Source Citation
Umstead, R. Thomas. "WWF, Turner wrestle with PPV problems." Multichannel News 12.27 (1991): 3+. Expanded Academic ASAP. Web. 20 June 2013.