But wouldn't decreasing the cost ultimatly bring in more money, cause that in turn should bring in more buys. There are people that say they don't order ppv's because of the price. Increasing the price wont make it any better. That's lesser buys, not more. Decreasing an already high price just it self, should (in theory) increase buys.
Well it probably would increase buys, but the question is would it increase the buys enough to increase the revenue they gross from the PPV. Lets use the 200,000 buys example again. So at $39.95 they would make $7,990,000. Now lets say they lowered the price by $5 to 34.95. Now it’s $5 cheaper and they gain 15,000 buys and now get 215,000 buys. So with 215,000 buys at 34.95, they would make $7,514,250 from the PPV. That’s nearly $500,000 less than they would make if they kept the price at $39,95 but got 15,000 less buys.
$34,95 – 228,000 buys = $8,000,000
$39,95 – 200,000 buys = $8,000,000
$44,95 – 178,000 buys = $8,000,000
I just rounded off the number to $8,000,000, but what this shows is the amount of buys it would take at 3 different costs to make $8,000,000. If they lower the price by $5 you would need to gain 28,000 buys to just keep making the same amount of money. If you increase the price by $5 you can lose 22,000 buys and still make the same amount of money. The point of all of this is to show you that if you decrease the price you have to gain far more buys to increase the revenue of the PPV, than the number of buys you can lose if you increase the price but still make more money. When we are talking about $5, I don’t think you will add enough buys to make it worth while to actually decrease the price, and on the other side of that, at only a $5 increase I don’t think that many people would stop ordering the PPV’s to make it a poor move that would result in the PPV’s making less profit.
The main point is to really not look at the buyrate so much, but look at the actual profit you make from the PPV’s. And by my examples it would seem that an increased price should result in the WWE making more of a profit from their PPV’s.