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Saturday, May 06, 2006
Mixed Martial Arts--- UFC and Pride Both Raise Pay-Per-View Prices
by Ivan Trembow
Originally Published on MMAWeekly
Zuffa and Dream Stage Entertainment have both raised the suggested retail prices of their pay-per-view events in North America.
Pay-per-view events from the UFC, which were previously $34.95, will now cost $39.95 for the forseeable future. Pay-per-view events from Pride, which were previously $29.95, will now cost $34.95 for the forseeable future. Additionally, Pride Bushido pay-per-view events, which previously ranged from $19.95 to $24.95, will now cost $29.95.
Zuffa Raises the Bar to $39.95
Cable and satellite providers almost always use the suggested retail price provided by the event promoter, and for years that price had been $29.95 for both UFC and Pride events. Zuffa raised the price of UFC PPVs to $34.95 in April 2005, just in time for the record-breaking "Couture vs. Liddell II" event.
Zuffa decided to raise the price again, this time to $39.95, for the "Couture vs. Liddell III" event in February 2006. At the time, a Zuffa PR rep compared it to the boxing PPV model on the Underground Forum and said that the higher price point would probably not be a permanent thing and might only be used "once or twice per year." Indeed, the price of the next PPV event, UFC 58 in March, was back down to the previous $34.95 price point.
However, with $39.95 as the price point for UFC 59 earlier this month, and for UFC 60 in May, and for UFC 61 in July, and for UFC 62 after that (tentatively planned to be headlined by Liddell vs. Renato Sobral), and for UFC 63 after that (tentatively planned to be headlined by Matt Hughes vs. Georges St. Pierre), it now appears that $39.95 will be the suggested retail price for every UFC PPV in the forseeable future.
If Zuffa is confident that it can sell just as many PPVs at the $39.95 price point as it could at the $34.95 price point, then this price increase makes sense from a business standpoint.
It's also a very significant move within the pay-per-view industry because the "normal" price for a UFC PPV ($39.95) is now actually higher than the "normal" price for a World Wrestling Entertainment PPV ($34.95). This gives cable and satellite companies incentive to provide UFC PPVs with more replay timeslots throughout the month, and to promote UFC PPVs more than WWE PPVs, especially since the North American sales of WWE PPVs have fallen off significantly over the past five years.
Why Pride Had Little Choice But to Follow Suit with its Own Price Increase
Given the higher price of UFC PPVs, it could have potentially made Pride look bad in the PPV industry if the company had continued to charge $29.95 for its PPV events at the same time that its biggest competitor was charging $10 more for events of the same length. This is purely about perception. If you're charging $29.95 for three-hour PPV events and your biggest competitor is charging $39.95 for three-hour PPV events, it makes your competitor look like the "premium product" by comparison.
Pride doesn't have to match the UFC's PPV price, but it does have to come close for perception purposes. There really wasn't much of a choice for Pride other than to go up to $34.95, given that Zuffa had gone up to $39.95.
It's very similar in the pro wrestling industry, where the #2 pro wrestling company in terms of North American PPV sales (TNA) has to charge $29.95 for its pay-per-view events, in order to come close to the $34.95 price point of the #1 pro wrestling company in terms of North American PPV sales (WWE). If TNA charged $24.95 or $19.95, it would make TNA look second-rate by comparison.
For many of the same reasons, Pride has also raised the price of its "Bushido" line of pay-per-views. While the "regular" Pride events will now cost $34.95, the Pride Bushido events from this point forward will cost $29.95. Previously, the suggested retail price was only $19.95 for the three-hour Pride Bushido events, although it was raised on one occasion to $24.95 for the four-hour-long "Bushido: The Tournament" event.
King of the Cage and K-1 PPV Prices
If you have ever wondered why King of the Cage charges so much ($29.95) for its three-hour PPV events in North America, it's the same reason--- perception. Obviously, King of the Cage would have a lot more PPV buys in the United States if it charged $14.95 or $19.95 for its three-hour PPV events, but as a promoter you don't want a potential customer to be looking at the prices of PPV events and saying, "Hmm, Promotion A is so much cheaper than Promotion B... so I guess Promotion A must be a second-rate promotion." Even if you actually are promoting a second-rate product in terms of the number of PPV buys, you still don't want to feed into that perception.
The King of the Cage events that only cost $9.95 are viewed completely differently because they are only one-hour-long broadcasts. Even with the price increases from the UFC and Pride, I would not expect to see King of the Cage charge more than $29.95 for its three-hour PPV events anytime soon, given that it's already so much a stretch for them to be charging $29.95 in the first place. That is not intended to be a disrespectful statement towards King of the Cage; it's just that KOTC events are smaller-scale events that cost almost as much as the larger-scale events.
K-1 only charged $24.95 for the recent North American PPV debut of its "K-1 Dynamite 2005" event, but that was primarily because it was only a two-and-a-half-hour event instead of a three-hour event. The next K-1 PPV event that will be made available in North America will be a three-hour-long broadcast of "Mayhem at the Mirage II," which took place last week in Las Vegas.
That event is expected to carry a suggested retail price of $29.95, and unfortunately it will not debut on North American PPV until Friday, June 16th at 10:00 PM Eastern Time. K-1 parted ways with ESPN PPV last summer and is now distributed on North American PPV by Integrated Sports. This change in PPV distributor is the reason for the delayed PPVs, and is also the reason that the final two events in the K-1 World Grand Prix were simply never offered to North American PPV consumers last fall.