Pay Per View Costs to Decrease
According to Request Television, one of the nation's largest PPV operators, The average cost of a pay-per-view movie should dip below $4 for the first time next year.
In its 1995 Year in Review Report, Request said the 1996 average cost fora movie on pay-per-view should be $3.99. This year, the rate was $4.10. The rate has been steadily declining since 1985, when the rate was $4.79.
Direct broadcast satellite services like DirecTV offer pay-per-view movies for as low as $2.99 and this pressures cable operators to lower their rates.
The number of addressable cable systems with pay-per-view could increase in 1996, by as much as 14%, to 30.2 million subscribers. The average number of PPV channels offered by cable operators is also expected to grow from 4.5 channels to 5.2.
Boxing continues to dominate the pay-per-view industry as the biggest revenue-getter among events. According to Request, 56% of total pay-per-view revenue camefrom boxing, with wrestling adding another 34%.
On the movie front, Request predicts that the window between a movie's release on homevideo and its pay-per-view premiere will narrow. Request said the average window in 1995 was 50 days, and it is looking for a 46-day window next year.
DirecTV Offers Service to Alaska
DirecTV has begun to offer service to Alaska and it is actively authorizing dealers. According to a DirecTV spokesperson, DirecTV has secured the rights to broadcast all its programming except Paramount Pay-Per-View movies which will be blacked out for Alaskan subscribers. While a 4 foot dish is adequate in southern Juneau area, an 8 foot dish is required in the Anchorage and Fairbanks areas.
Cable Abandons Interactive TV and Embraces PC's
Chairman John Malone of TCI delivered the eulogy for Interactive TV last week at the Western Cable Show. The technology is expensive and consumer tests such as the one in Orlando demonstrate that the public isn't interested. Instead, cable will stick with its strength which is the ability to deliver data to a PC 1,000 times faster than the phone company can. Cable plans to enter the internet access business within the next year.
Critics say that cable may be overestimating demand for high bandwidth cable modems the same way as they did with interactive TV. The real problem is with servers and switching during peak hours, not with bandwidth.
C-Band Sales Continue to Slide
According to statistics in the December issue of TVRO dealer, Videocipher authorizations in October were 25,130 compared to 50,599 in October of 1994. October deauthorizations were 16,533 this year compared to 18,059 last year. Sales of C-band systems were estimated to be 27,000 this October compared to 53,800 in October 1994. Total sales of C-band systems were 646,050 for 1994 and it appears they will be half that for 1995. The direct-to-home universe is now made up of 54.89% Videocipher, 24.75% DSS and 20.35% primestar.