The Soapbox: Pay-per-view pricing

HBO-PPV-Logo

 

 

It’s time for a summer edition of “The Soapbox” and, this time, it comes from longtime reader Shane B., who emailed me a few weeks back and promised to purchase the Terence Crawford-Viktor Postol pay-per-view bout last weekend. Shane – who, unlike many others, enjoyed the night’s main event – hit upon something that become bothersome to many boxing consumers: the gradual increase of pay-per-view events over the past several years.

 

It’s boxing’s version of this popular lament from a few years back:

 

 

Here’s what Shane had to say…

 

“K9 – as you know, I planned on and did support the fight this past weekend as a way of supporting two guys with undefeated records who didn’t duck each other and put it out there. No marinating, just fighting.

 

“That said, when I saw $59.99, I gulped! I still remember those heady days when $50 could buy a card. This is was my first PPV purchase since the (Floyd) Mayweather (Jr.)-(Manny) Pacquiao fiasco. I did it. I enjoyed the fight and am kind of amazed at people comparing Crawford to (Guillermo) Rigondeaux, even smart people like Gabe Montoya. If it was that easy to beat Postol, somebody would have done it. Crawford had to work from impossible angles due to Postol’s size and he didn’t just frustrate Postol and win a decision. He beat him hard enough that he changed his fight plan, dropped his work rate to less than a third of what he likes and, yes, kept him from coming in with abandon until the 12th round. And even then, while I’m kind of seeing a replay of Jermain Taylor-Carl Froch in my head, Crawford slugs it out with him and almost gets Postol out of there instead!

 

“End of pro-Crawford rant. That ain’t ‘Rigo’ stuff. That’s holding Crawford hostage on a PPV if it’s not enough to totally dominate a legit #2 guy who’s never been beaten but KO him.

 

“BTW – before getting to my last point, let me ask too if we’re not the dog getting wagged by the Twitterati tail here. Maybe some of the relatively small Twitter faithful, who speak more often and louder, are creating an outsized impression that people didn’t like this fight? You’d know better than I but I do wonder if most people who watched this fight felt that way or if it’s just five-to-six people bitching on Twitter. Is there a silent majority that saw this like me and were shocked to hit your Twitter feed and see Rigo’s name hung around Bud’s neck?

 

“Now, getting back what the real issue is – it’s the PPV money. I again wonder aloud if Top Rank (Promotions) wouldn’t double or triple or quadruple the buys with a new program where they talk the press (ahem! Where’s the Swiss Banker?!) and explain the new reality with HBO and Showtime and get the word out to the hardcore fans who are targets that they will be doing these kinds of cards for $30-to-$40 each and would you please support our fighters? I think they could do three-to-four a year at that price and build an audience if the program is a good as what we saw this weekend. That changes the media conversation and the fans’ relationships but, perhaps as important, changes the expectations of the fighter.

 

“I get that old-school model says if you’re expecting fewer buys, you price higher and get out with what you can. But this is a new era, the post-Mayweather PPV era (yeah, aside from beating women regularly and not being in jail. What a guy).

 

“It seems clear that this model and 50,000 buys won’t work or Bob wouldn’t be pissed at everyone. Since I don’t see the need to do these cards going away, why not try a new way?

 

– Shane”

 

Shane, as always, thanks for writing in. Yeah, I really do think you’re in the minority, as it relates to Crawford’s entertainment value on this particular night. But, as I’ve stated before, I give Crawford a bit of a pass on this one, given that Postol is impossible to look good against and he actually has a history of providing memorable moments.

 

The real question moving forward is: As he now faces bigger, stronger fighters, is this the “new normal” in terms of Crawford fights?

 

But again, beauty is in the eye of the beholder. If you enjoyed it, hey, more power to you. Overall, top-to-bottom, I liked the card.

 

Now, to address your last point, yeah, why have boxing pay-per-views crept up to where they are now regularly $60-to-70 dollars instead of closer to the $40-to-50 mark? Let’s be honest; it’s not as if the quality of match-ups are any better these days. And I think everyone involved understood (if they were being honest with themselves) that Crawford-Postol was going to be a tough sell. Only the hardest of the hardcore were going to purchase this event.

 

From what I’m hearing, that’s basically what happened. The word is this pay-per-view did under 50,000 buys (which is perhaps one reason why Bob Arum is on his boxing media blackout.)

 

But a good question raised was: Why wasn’t an event like this priced a bit lower? Would they have really hurt their cause by going with a retail price of $39.99 (with the usual $10 hike for the HD broadcast, which – let;s face it – is a scam nowadays, given most television sets are now HD)?

 

I asked Mark Taffett, the former head of HBO Pay-Per-View, who now runs Taffet Media (which specializes in consulting with pay-per-view promotions), if the prices needed to be adjusted.

 

“Pay-per-view always has been about providing premium quality. The types of events people want to get together and want to watch, they’re meaningful fights. Some of the two, three, four most meaningful fights of the year and, when pay-per-view events meet those criteria, then fans have always supported them with premium prices,” he explained. “But if the event doesn’t stack up, then there’s what’s called “very elastic demand,” which means the volume is very sensitive to the retail price and, in those cases, the performance of the event continues to reinforce that you have to have a meaningful fight that fans care about. Where the outcome is in doubt and where there’s something really on the line.

 

“Those fights are the fights that generate the mega-fight levels of buys. Always have and always will.”

 

But one must wonder if, in the aftermath of May 2, 2015 (and you know the fight to which I’m referring), if there is a new landscape. But Mayweather-Pacquiao does prove Taffet’s point. That event was $100 and procured over four million buys and set records across the board. Taffet states,”The true premium events will perform at premium prices.” But the problem was the bout itself was such a dud, it basically turned off an overwhelming majority of the casual fans (those who really determine the success of such promotions). It’s hard to determine just how much damage was done but basically both Mayweather and Pacquiao lost right around 90 percent of their pay-per-view audience in their subsequent fights.

 

From that point, it’s fair to say that only last November’s fight between Saul “Canelo” Alvarez and Miguel Cotto could be truly considered a box-office success from a pay-per-view perspective.

 

This brings about another bone of contention this reporter has: If it’s a necessity to jack up the price for certain events – like Mayweather-Pacquiao because of the finances involved and the overall magnitude of the fight (which most reasonable individuals will grudgingly accept) – why can’t the opposite take place with fights of much less significance and importance and prices be decreased by $20-25? The reality is some pay-per-view events aren’t “premium” but a necessity born from other reasons, so why not price accordingly and try and work in volume? Also, this is the era in which there is more and more cord-cutting with cable and satellite subscribers.

 

But as was pointed out to me on Twitter about the diminishing pay-per-view returns:

 

Gerald ‏@sedna90377: “@steveucnlive Falling PPV buys necessiates (sic) price increase to make up the difference which causes PPV buys to fall even more. #ViciousCycle”

 

“I believe it’s a matter of being more selective with the types of events that have a premium price than it is reducing the price across the board,” opined Taffet. “Reducing price across the board is not the antidote for non-premium events performing at premium event levels.”

 

There is a belief in the boxing industry that, no matter the price, those who are inclined to buy an event will not be dissuaded by how much it costs. But could that be an antiquated belief? Nowadays you have the UFC, which puts on monthly shows and has cultivated a strong brand and I’m told that, on average, their pay-per-views are less expensive than boxing and do a much better job of making the fights the fans want to see. Then there is this – streaming. Yeah, those in the business want to act like this isn’t a factor but there are many that ahem…”listen on the radio” to all the major fights. It’s the modern-day version of the “black-box” (remember those?) and all you really need is wi-fi and a computer to access a stream. There is also Premier Boxing Champions, which has given fans, ahem (sorry, I just have to…) FREEEEEEEEEEEEEEEEEEEEEEEEEEEEE boxing.

 

(Another problem boxing has, in terms of getting its product out to the masses, is how expensive its pay-per-events are to establishments like bars and restaurants. There’s a reason it’s much easier to find places to watch the UFC than boxing – it’s simply more affordable to these businesses. Again, who is doing a better job of growing their sport/brand here?)

 

As we look ahead to the upcoming pay-per-view schedule, we see, on Sept. 17, Canelo faces WBO junior middleweight titleholder Liam Smith from AT&T Stadium in Arlington, Texas. Then you have Nov. 5, which will feature the return of Pacquiao against somebody at the Thomas and Mack Center in Las Vegas and then the showdown between Sergey Kovalev-Andre Ward, scheduled for Nov. 19 at the T-Mobile Arena. (Yeah, two pay-per-view cards in three weeks. That’ll look like real nice on your November cable bill. This issue is still lingering and nobody involved – Top Rank, Main Events, RocNation Sports and HBO – is happy about this situation. People are digging their heels in and it’s one big game of chicken being played here.)

 

It’s safe to assume that all three of these events will come at a price of around $50-60 with, of course, the HD tariff.

 

As I like to say – Good luck with that.

 

 

TNR

 

Here’s Episode 590 of “The Next Round” with Gabe Montoya and me.

 

 

3KD

 

“The 3 Knockdown Rule” is in effect with Mario Lopez and Yours Truly (Note: Next week there will not be a show as Mario is on the run out of the country).

 

 

FRIDAY FLURRIES

 

I know, in Britain, they have the BoxNation package, which basically gets you all the pay-per-view fights for right around $15-to-20 a month…So Danny Jacobs will rematch Sergio Mora on Sept. 9 in Reading, Pennsylvania. Yeah, ummmm, wasn’t Jacobs supposed to be the face of Brooklyn boxing and its new series?…I actually really like the fight between Richard Commey and Robert Easter Jr. that is the co-feature on the Spike broadcast…I think Thomas Williams has the proverbial puncher’s chance versus Adonis Stevenson…NFL training camps have started. That’s a good thing…The two young teams I’m really looking forward to seeing this year are the Raiders and the Jaguars…The HBO “Real Sports” on the International Olympic Committee corruption was simply outstanding…I can be reached at k9kim@yahoo.com and I tweet (a lot) at twitter.com/steveucnlive. I also share photos of stuff at instagram.com/steveucnlive and can also be found at tsu.co/steveucnlive.

 

 

 

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