When a fight promoter hatches a pay-per-view priced at $60, about $30 of that total goes to the cable and satellite companies that distribute the bout. On a $70 million night, such as the one that boxing promoter Top Rank had when about 1.15 million homes bought Manny Pacquiao’s fight against Juan Manuel Marquez in December, about $35 million went to the distributors.
That’s the model that has been in place for decades. But there is an exception to it.
Top Rank now primarily uses its website to let boxing fans learn more about fighters. Streaming live events will play a larger role in the future.
When that fight promoter, in this case Top Rank, produces its own pay-per-view broadcast for distribution via its own website, it no longer shares any of that $60 with a distributor. It is that sort of economic swing, coupled with the potential to deliver content to a fan base that until recently wasn’t getting much from traditional television, that has led Top Rank to work with site host MLB Advanced Media to develop an online presence that will both promote its fights and generate more revenue from them.
Though most sports properties see potential in online video, none stands to reap the immediate benefit of a company that makes millions from pay-per-views as Top Rank does.
While HBO produces the broadcast seen by the overwhelming percentage of buyers, TopRank.com offers its own feed of the same fight, with its own camera crew and announce team and digital enhancements developed by MLBAM. The streamed pay-per-view is priced the same as the one shown on HBO, so the market for the Web product is the small segment of viewers who are willing and able to make the purchase but don’t have access to cable or satellite at the time of the fight. About 3,000 viewers streamed Pacquiao-Marquez IV.
As the percentage of cord-cutters increases, that segment will grow.
“It’s a line that you walk,” said Todd DuBoef, president of Top Rank, which relies on its distributors for the promotional assets that help sell the fight. “I understand when I go into someone’s home that [cable and satellite providers] spent billions of dollars on the infrastructure to get me into that home. I don’t necessarily believe that’s the case when I can deliver my content directly to a paying customer through the Internet. So I don’t think they’re entitled to a massive share of that revenue.”
While the pay-per-view offers the largest economic upside, Top Rank’s video offerings go well beyond that, with live broadcasts of undercard fights, weigh-ins and press conferences, all of which also are available for later viewing. The site did about 30,000 streams of the undercard for a fight that aired on HBO earlier this year. It did about 2,000 streams of the weigh-in. Some of that content likely will be rolled into a subscription model eventually, DuBoef said, though they are still sorting out the specifics.
“For years, we had all this content and we weren’t making use of it,” DuBoef said. “It was like when they talk about all the tape on the edit room floors. There’s value in everything on our floors.”
