Pay-per-view is the engine driving the UFC's explosive growth of recent years.
But as the media landscape continues to change and new broadcast platforms compete with networks, the UFC thinks there may be a time when the pay-TV takes the back seat in producing revenue for the promotion.
"Lorenzo and I talk about this all the time – I do believe there will be a day when this probably isn't pay-per-view," UFC president Dana White said of his promotion during a press conference in support of UFC on FOX 3.
At the moment, the bulk of UFC fans shell out between $44.95 and $55.95 to order a numbered UFC card through providers such as DirecTV and Dish Network. That's meant big bucks for the UFC as its grown from a company of dozens to one of hundreds around the globe. Estimates of the UFC's pay-per-view revenue reached as high as $400 million in 2010, and the promotion is believed to be worth in excess of $1 billion.
A report this past November in the "New York Times" said pay-per-view earnings were down this past year, the likely result of a string of high-profile main events that fell apart due to injury and a busier schedule that prompted customers to get choosy on which events to buy in a down economy. But the UFC keeps its pay-per-view numbers secret, so getting exact figures on the company's health is impossible.
Pay-TV, of course, isn't the only moneymaker. The start of 2012 brought a new broadcast partnership with FOX that's been estimated to be worth around $90 million a year. The deal calls for events on the network's flagship channel and affiliates FX and FUEL TV. The first FOX-televised event, which took place this past November and preceded the start of the partnership, drew an average of 5.7 million viewers while the second event drew 4.7 million. Both events were a success with advertisers.
But the UFC also needs other sources to feed the till, and it's embraced other platforms to bolster revenue from TV and pay-per-view. The promotion's online business sells fights through the UFC's website and through online partners. It has yet to replace the revenue brought by pay-per-view. That could change, however.
"A lot of people believe everything is going to go to the Internet, like now when you buy your cable, and there's basic cable and you add other stations, we're probably going to get to a point where you can pick exactly what you want," White said. "So it's very interesting to see where all this goes over the next several years."
The idea of a la carte cable service was pursued early on by the Federal Communications Commission and in subsequent years by consumer advocates, though it remains a topic of debate whether the ability to pay for individual channels would actually save TV watchers money. Major cable companies have nevertheless been resistant to the idea, and as of now, the status quo of offering bundles of channels in different sizes remains.
Meanwhile, subscriber-based content continues to gain popularity on the Internet. Many media companies are experimenting with a pay model, and networks are offering shows online for a fee. The younger demographics that flock to MMA are on the Internet more than any other age group, and as that trend continues, the UFC's online business could become a more profitable as many consumers cut their bills by cutting cable.
The web probably won't replace TV and pay-per-view, of course. But the idea of escaping monthly 100-dollar cable bills is a welcome idea for any fan.
