The complexities of Internet PPV

July 12, 2013

Live streaming of events is a relatively new technology that smaller MMA/boxing and pro wrestling promotions have taken to as a way to expose its brand to a broader audience.  But setting a bigger footprint comes with growing pains as production costs must be weighed with exposing your brand to bigger audiences.

The biggest example of the problem with live streaming occurred this year when Invicta FC’s event in January had streaming issues running through Ustream.  The problem dealt with Ustream’s paywall which prevented access to the event.  “The issue was an overload of requests to purchase the event in a very short amount of time,” Ustream spokesperson Victoria Levy told MMAPayout.  Eventually, the paywall allowing viewers to pay for the event was taken down.  Ustream acknowledged an issue with a public apology.  Since that issue, Invicta ran another event on the Ustream platform without any substantial issues as Ustream addressed the issues. “The stability of the existing system was improved and basically the whole process was rebuilt to avoid this in the future,” explained Levy of the process to address the Ustream issues

Wrestling promotions Ring of Honor and New Japan among others have had multiple issues with live streaming online.  ROH indicated it would not offer live internet PPVs again after several issues with the streaming.  Its last iPPV experienced streaming issues during the main event.  This was not the first time its events were marred by streaming issues.  It has decided to tape delay its events to avoid further issues.

What is Internet PPV?  

As you can gather from the name, Internet pay per view, or iPPV, is a platform in which viewers can pay to watch a live show which is streamed online.  A company can have the iPPV on its own web site or have a third party, like Go Fight Live, host the event.

Who uses it?

Anyone.  From small to big, regional to national, MMA, boxing, pro wrestling and other combat sports utilize iPPV in order to promote its product.  The promotion usually fronts the costs for the technology and production costs in order to run the event.

Most promotions seek to establish a bigger footprint outside of its region and perhaps garner an internet following.

What are the obstacles to iPPV?

There are several barriers to entry when it comes to live streaming an event.  The first is the cost.

The costs of an iPPV vary.  But, according to Roy Englebrecht, promotions should focus on the look of the iPPV.  Production costs are very important in how the PPV will look to the viewer.  Englebrecht runs Fight Club OC in Southern California.  He has attempted iPPV twice but decided to forego online streaming to focus on the people in attendance. “Nobody wants to buy a small club show on the internet because there are not many quality fights and the production is not that good,” explained Englebrecht.

Fight Club OC

The second issue which ties in with the first is the production value.  Englebrecht brought up the issue that the promotion’s brand is out there for the public and anything less than a top notch looking product hurts the brand.

Englebrecht runs an instructional course on fight promotion and does not talk about iPPV or PPV because it makes no sense.

“There are many hard costs before making a dollar,” explained Englebrecht.  If a promoter wanted to run an iPPV Englebrecht estimated that at a minimum a promoter would have to spend $2,000-$5,000 on lighting alone.  A decoder, a technological piece that is needed for the PPV to work would cost at least $500. These are only a couple of the big ticket costs for an iPPV.

“The key for any promoter is to put on the best show for ticket buyers that are there,” Englebrecht added that if a promoter were to put on a PPV, they would be worried about the PPV broadcast rather the show.  “He’s hurting his bread and butter [the fans in attendance].”

Go Fight Live

GFNLOGO

One of the reasons why small companies use iPPV is to promote its brand and expand its footprint.  It offers a chance for those that cannot attend a local event to see it.  For fans of the organization that cannot make it, its a chance to watch it at home.

Go Fight Live (“GFL”) is a web site which airs iPPVs for MMA promotions, boxing, muay thai, professional wrestling and other types of combat sports.  It started in 2008 and has had over 2000 shows according to GFL’s president David Klarman.

“We’ve sold and had viewership in 199 countries,” stated Klarman.  “Our biggest buckets are the U.S., Canada and the UK.”

GFL offers a revenue share of 50/50 for an organization to use GFL to stream an event. It also includes GFL marketing, promotion, customer and tech support for the event. GFL charges the organization if it needs production (e.g., cameras, lighting, etc.)

GFL indicated that a 3 camera shoot with replay technology, audio technology and a commentator area would be at least $1,800 plus travel expenses.  A single camera shot would be only $300.  However, a one camera shoot may not look and feel as professional as having different camera angles.

GFL’s demographics is 70% male in the 18-45 age range.  Klarman indicated that 70% of GFL uses Apple TV, iPTV, iPads, tablets and mobile devices.

GFL has an internal process to ensure that live streaming occurs without any flaws.  Klarman stated that GFL has internal diagnostics to figure out issues.  GFL has staff to investigate the issue and determine if its a bandwidth issue or something else.

“Its far more complex than that cable that goes in the wall,” said Klarman.  GFL has customer service to address streaming issues and can let customers know if its experiencing issues.  In the alternative, if a customer could not access a stream they paid for, GFL would refund money.

The Future

Although iPPV and online streaming is still a new technology to most, there are signs of where it will be going.

Klarman sees a shift over the next generation that cable TV will change how it interfaces with the consumer.  Based on the viewership, more people may be turning to mobile devices.

“Live video streaming will absolutely expand to other platforms,” said Levy.  “  We’ve already seen a significant increase in mobile viewing over the past 6 months and we predict that mobile viewing will be as high as 60-65% by the end of the year. Live video streaming will continue to become available to everyone through multiple devices such as smart TV’s, mobile devices, and tablets.”

5 Responses to “The complexities of Internet PPV”

  1. Aintitthetruth on July 13th, 2013 2:27 AM

    Why no mention of Nick Diaz and his WAR event? By all accounts it was a modest success, minus a few hiccups. Plus he got it setup on 3 weeks notice. I like how the most consistent number paid (since you got to select how much you paid) was 4.20$. I was actually thinking 10 dollars would be reasonable for a regional event like this.

  2. Jason Cruz on July 13th, 2013 5:54 PM

    While it was a good start for Diaz in terms of PR and even praise from Dana White, the actual event didn’t make money.

  3. Sampson Simpson on July 15th, 2013 8:01 AM

    No local mma or boxing events turn any significant profit

  4. Diego on July 15th, 2013 9:00 AM

    “No local mma or boxing events turn any significant profit”

    Sad but true.

  5. sonia boyd on January 15th, 2014 11:35 PM

    gfl is bullshit, they don’t pay, they ignore you with customer service, beware being an affiliate. sonia boyd

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