Content distribution is accelerating its trend toward immersive online experiences. Still images are more immersive than text, moving images more immersive than still ones, and live moving images in real-time are the most immersive of all. Social media platforms are banking on live streaming to keep viewers coming back, and companies have their fingers crossed that it will be a rich source of advertising revenue.
With that in mind, live streamed PPV has moved from a way to catch movies and sports on TV to the wave of the future on the web. Live streamed concerts are attracting millions of PPV viewers, and many of those fans are following up by attending the same concert in person. The PPV model is one that is proven to work for world-class events, but soon, it could be one that works for your nephew’s high school graduation. The growing sense of urgency that feeds live streaming in general will extend to PPV.
Audio and visual quality coupled with the sense of emotional connectedness from a real time experience will outweigh viewers’ cost concerns. In fact, more intimate events may be the future of PPV. A college football game or basketball game has maybe 80 pay per viewers. But a high school game may have more than 300 viewers. Besides, PPV is not an all-or-nothing commitment: it’s one area where you are free to create a mix of live stream and on-demand.
It’s safe to say that people are more willing to pay for content today than they were a few years ago. A 2016 study by the Center for the Digital Future at USC Annenberg and Post Game revealed that 63% of sports fans (86% of Americans) would be keen to pay for an OTT subscription service, and 90% would pay something for quality sports content. Viewers’ main concern was an excellent experience, not the cost.
One live social video company, Hang, is experimenting with digital tickets. The producer (you) sets the price of admission, and those who want to view the product (your viewers) pay for the experience with coins purchased within the app. The jury is still out on who is willing to pay, how much, and for what. But early returns indicate that Hang is getting the hang (sorry) of the new wave of PPV.
Part of PPV is dictated by the purpose. If you’re a church service and your purpose is to communicate your message, you don’t want to create an obstacle by making somebody pay. If you have a different content that’s in demand, however, you can do PPV successfully. For PPV TV, that means the future looks a lot like the present. For live streaming on the Internet, however, the PPV trend may just be ramping up. All signs indicate that as Internet picture quality and speed improves, people are turning from their TVs to their laptops. And yes, they’re willing to pay for the experience:
- The global VOD market is about US$16.3 billion in 2016. Accounting for 16% of the digital media market, VOD is significantly larger than digital music and on a similar level with ePublishing
- The VOD market cumulatively amounts to US$9,529 million in 2016 with growth in PPV, video streaming, and video download all predicted to drop annually
- Revenue in the “Pay-per-View (TVoD)” segment amounts to about $3.4 million in 2017 (Statista)
- Most revenue is generated in the US followed by the UK, Germany, China, and Japan
- By 2021, around 77 million people will be PPV (TVoD) users
- Revenue is expected to show an annual growth rate (CAGR 2017-2021) of 4.5 % resulting in a market volume of US$4,046m in 2021
- User penetration is at 5.8 % in 2017 and is expected to hit 7.2 % in 2021.
- The average revenue per user (ARPU) currently amounts to US$14.94
- From a global comparison perspective it is shown that most revenue is generated in the United States (US$1,915m in 2017)
- In Europe, the PPV market is growing with an average of 5.7% per year
- The video market globally is growing at a compound annual growth rate of 8.3% to 2021.
- Unsurprisingly, the majority of 2016 users are under the age of 34. There are 29.6 million users aged 16 to 24 and 33.9 million users in the 25 to 34 age group
- In that same 25 to 34 population, viewers can be segmented into different income levels with middle-income users making up nearly 50% of the audience in this age group
The biggest players, or organizations with millions of engaged fans, will always have pay-per-view in their plans since it guarantees revenues. And that’s because of their freedom to reach the audiences directly. The most successful broadcasters of live events are the ones who:
- Raise interest and deliver top-notch content: The goal is to market content so that viewers are talking about it and spreading buzz. Using traditional communication channels while directing them at the PPV site where the revenue is made is something that the successful ones manage to do.
- Take care for the full fan experience: At end of the day, the goal is to deliver all the what the fan would expect from a premium video package.
- Make sure that their event has quality mobile coverage: Statistics show that mobile access of premium video is growing immensely. Over 40% of mobile views is the norm nowadays and broadcasters need to put special attention on this while their are planning.
PPV is no longer limited to boxing matches, old movies, and massive sports and entertainment events. Today, options have filtered down to a level as granular as a single individual with a Facebook account and a sense of humor. Anyone can set their own PPV rates and upload video content to their web site. Hosting services that provide low commision cash flow management are springing up. PPV hosting for little guys works on all devices, and hosts are beefing up security at all levels.