Pay-Per-View

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PAY-PER-VIEW

The concept of pay-per-view, or paying a fee to watch or obtain specific content, became popular through cable television during the 1990s. By 2000, the pay-per-view cable and satellite industry was securing $1.5 billion per year by charging customers to view certain movies and special events. Believing the Internet would prove a lucrative sales channel for pay-per-view events and content, many firms began utilizing the World Wide Web to broadcast movies and television shows, as well as content, on a pay-per-view basis.

The development of streaming media in the late 1990s allowed radio, television, and movies to be heard and viewed on the Internet. This technology, coupled with faster Internet connections including digital subscriber lines and cable modems, allowed Web surfers to use personal computers to view what had traditionally been available only through regular and cable television. Cable station Showtime Networks launched its foray into pay-per-view on the Internet in 1999. That year it launched its first event online—a boxing match between Mike Tyson and Orlin Norris. In July of 2001, television network CBS teamed up with RealNetworks Inc., a leading Internet media delivery firm, to offer reality television show Big Brother 2 on a pay-per-view basis. Online viewers had different payment options including a $9.95 per month option that included RealNetwork's Gold-Pass service. This service allowed the viewer access to the show, along with broadcasts of sporting events including professional basketball and baseball games.

Other examples of entertainment companies utilizing pay-per-view include Hollywood.com and CinemaNow. The duo launched a movie site in June 2001 which streamed independent films and allowed Web surfers who paid $2.99 to have access to a movie for 48 hours. At roughly the same time, Intertainer.com began offering older television shows such as the Beverly Hillbillies on a pay-per-view basis.

The ability to broadcast movies online on a payper-view basis sparked the advent of video on demand (VOD). While still in its infancy in 2001, VOD was expected to eventually replace traditional pay-per-view cable movies. VOD allows a viewer to rewind, fast-forward, pause, start, and stop a movie at will. A VOD movie begins at the time of payment, rather than at a scheduled time, and typically can be viewed for 24 hours on either a personal computer or through television. Companies including Sony Pictures Entertainment, Blockbuster Video, AOL Time Warner's Road Runner cable service, and Intertainer invested in technology which would allow VOD to become available to Web surfers utilizing pay-per-view billing methods.

Content-based Web sites unrelated to the movie and television industries also use pay-per-view methods. News sites including the Wall Street Journal, for example, charge users to view portions of its online content. USA Today also charges its online readers to access its articles; a customer can view one article for $1.50, view up to ten articles a day for $4.95, or pay $14.95 per month to access up to 100 articles. Web portal Yahoo! offers buying guides and product ratings from Consumer Reports. The reports costs $2.95 each, and users can view them for 30 days. Similarly, California-based Ebrary offers books and journals on a pay-per-view basis, charging 15 to 25 cents per page.

Whether selling entertainment or information, many dot.com firms utilize a pay-per-view system. While some critics question the long-term viability of selling content via the Internet, an August 2001 EContent article claimed that "the Internet will be very much like cable TV. At first, many analysts said cable TV would never catch on, that people would never pay for content. The same will happen with the Internet, particularly as better content goes up for sale."