EPTAnyways, no large introduction, but I'm going to break down why PPV is a poor option for generating money. This will be a very long post, I'm going to try to keep things as simple as possible, I apologize if I lose my focus or train of thought breaking down PPV at its core.
#1: First, one has to look at the major industries which do PPV events, which is Pro Boxing, Pro Wrestling, and MMA. I'm a huge pro wrestling fan, follow UFC, and know enough about boxing, so I can talk the PPV models for all three.
With Pro Wrestling, there are 2 major companies in the United State: WWE and TNA. WWE averages about 5 million people in the United States for Raw, and TNA averages about 2 million people for Impact weekly. Both companies hold PPV events on a monthly basis. Ignoring the quality of building up for PPV events (which I'll cover later), WWE events will generally turn out 125k people per month who buy their PPVs in the US (Wrestlemania being an exception, the biggest event of the year plus having Mainstream publicity which draws outside fans, doing usually 600-800k US). TNA Impact shows do usually around 10-20k per month, down recently, with their biggest shows ever doing 60k (and currently their big shows will do 30-40k). Also consider that Pro Wrestling has been doing PPV since the early 90s, and its a part of the pro wrestling community to view this stuff on PPV. Also, adding to this, there are smaller companies (Ring of Honor and Chikara Pro Wrestling) which have done PPV via the internet at reduced prices, but they topped out at 1000-2000 people for their events, with no mainstream TV advertisement.
With MMA, the only company who has done successfully on PPV is UFC. UFC PPV numbers, from when the company started in the mid 90s, have been up and down, but are right now at their relative peak in terms of popularity, having quarterly prime time specials on Fox Saturday Nights, which have done decent to good ratings since they started. UFC, unlike WWE or TNA, doesn't have a weekly show, but rather has their Ultimate Fighter shows (which builds up new talent trying to make it to UFC) and their Countdown Specials, which are hour long shows specifically designed to build up their PPV matches. The specials usually get 1 million to 1.5 million people turning in. UFC, depending on the level of stars and how well their storylines/backstories of matches connect with people, will draw anywhere from 300k to, at their highest level, 1.8 million for UFC 100 (with ESPN promoting the show as well), although realistically the biggest stars will get to around 1 million people buying. Note: This is only UFC. Every other MMA promotion which has tried to do PPV has failed and is out of business. While I can't cite numbers, this basically stems from them having to pay large salaries for perceived names, and the buys being significantly under what they expected.
With boxing, it's usually much simpler. If a major name is fighting, sports shows like ESPN will build up the fight, and the shows will do well. However, this only happens with big named fighters like Pacqiao or Mayweather, with few other people being major draws or doing good numbers on PPV. Admittedly, this area is where I'm the weakest on.
TLDR:
WWE: 5 million people watching per week, about 150k people buying per month (roughly 3% conversion)
TNA: 2 million people watching per week, about 15k buying per month (roughly .75% conversion)
UFC: 1.5 million people watching shows designed to build up PPV, roughly 500k average buying per event (33% conversion rate, but they are also dependent entirely on PPV income unlike WWE/TNA which have house shows and TV rights deals for alarge portion of their income)
2: What sells a PPV.
As mentioned above, the variances in PPV buys differs a lot dependent upon what a company does to make people want to pay money to watch a PPV show. I'll cover these factors here for wrestling and UFC (and boxing by proxy).
Pro Wrestling: Traditional Pro Wrestling booking, dating back to its inception, revolves around the concept of a face (good guy) and heel (bad guy). The heel usually does something bad to the good guy, people pay to see the good guy get his revenge, usually on a PPV event. Or, there is an important match (for the Championship, or some other special attraction match) which one can only see by buying the PPV. In any case, the TV exists as a means to promote the house shows (to see stars wrestle) and PPVs (to see the conclusion of the story). Basically, PPV business boils down to fans caring to see the outcome (the storyline) and the attraction of the event (featuring major stars wrestling, or older stars coming back who don't wrestle on the weekly shows, most notably currently The Undertaker wrestling at Wrestlemania).
UFC: While UFC is a real sport (opposed to Pro Wrestling being scripted), much of their booking and PPV success is based on the same principles of Pro Wrestling. While their television exists souly to promote the PPV rather than being an entertainment vessel in itself (which is why WWE and TNA draw more viewers, and UFC draws a significantly higher percentage of viewers buying their shows), the variances in PPV are still dependent on how much the people care about the fight, and the level of stars who are involved in the fight.
Currently in UFC, the biggest stars are Brock Lesnar (recently retired), Georges St. Pierre (currently injured), Anderson Silva, Chael Sonnen (the latter two meeting in Silva's home country of Brazil soon for a match, in what has the potential to be a 1.5 million buy PPV, in addition to selling out a 100k soccer stadium to see the match), and a few others who are under that level. A show featuring one of these stars fighting in their once a year match will do high numbers, while a show featuring a bunch of no-names will do lower numbers. Additionally, with the countdown shows, a lot of backstory about why the men fighting want to fight is given, which can increase PPV buys significantly.
A third factor independent to UFC, is that PPV is the only place where you can see most of these fighters compete. While UFC has their Ultimate Fighter and Fox Special shows, its rare that a major draw fighter will compete on these shows, keeping their star auras up. Not to get into too much detail, but there is a fear with UFC that they are reaching a point of over-saturation, and that this is going to cause all their PPV numbers to drop, since people can now much more easily watch MMA fights.
TLDR: What sells PPVs for WWE, TNA, and UFC are the storylines which make people care about what happens, the stars who appear on the show to compete, and the exclusivity of the previous two plus their overall product only appearing on PPV.
3: Why Starcraft will fail at this model.
Before I go into this, I want to reference DongRaeGu vs. MMA from the GSL a couple months back. For those who don't remember, MMA handily won the first 3 games, was on the verge of winning the 4th game, when DRG has a great hold, came back to win games 4-6, and then they had an epic Game 7, which was for many people the greatest game they'd ever seen. This is, in its essence, pro wrestling booking. Game 7 was good, but the reason it was so awesome was because of the backstory of games 1-6, which set up Game 7.
Lets go back to before those matches happened. Why did anyone care about DRG or MMA going into that series? While it was for the GSL championship, and while by virtue of fighting for that both were stars, was there any emotional hook in there which would've made people want to pay to see them compete?
Thinking about Starcraft in general, the first principle of PPV booking, a reason to care, is missing from almost all Starcraft tournaments. This isn't a bad thing or the fault of Starcraft, but the core thing, existent in all forms of entertainment (example: NBA last year, the Heat with Lebron, Wade, and Bosh as the big heels buying their way to a title, falling to the Mavericks and Dirk finally winning his first taking them down, pro wrestling booking at its finest), and in general, Starcraft doesn't have that. There are small examples, but there are very few which connect on an emotional level with the general fanbase.
Secondly, the level of stars in the tournament. In this aspect, Starcraft does have an advantage. There clearly are people who are major tier stars in Starcraft, who people will watch if they are on, and people who aren't stars, who may be fundamentally good or better than many players, but haven't had the same level of exposure to the fans (see, pretty much any no-name Korean being at the same level of the top foreign stars skill wise, but drawing significantly fewer viewers). At least for Starcraft tournaments, they do have this.
Thirdly, however, which negates number 2, is that there is no exclusivity for stars outside of Korean pro-gamers. GomTV is the only SC2 company in the world right now who can get away with a PPV-style system, because they have an almost exclusive hold on the very best SC players, and consequently best SC games, in the world. When Koreans come to participate in major events outside Korea, it becomes a huge status symbol and a special attraction, which increases interest in said tournaments. However, in the foreign tournament, the ship has sailed on there being star exclusivity.
Take Idra for example. He's arguably the biggest foreign star in the world. However, if you want to see Idra play, you can watch his streams, or the youtube videos, or past videos, or pretty much go anywhere to watch him play. While he's a star, and can draw interest, his ability to get people to spend money on him is also extremely limited. For any number of big name stars out there, it's the same way. Seeing Idra vs. Huk, or Thorzain vs. Kas, or Naniwa vs. Socke (tossing names out there) isn't a big deal, nor worth paying to see.
In addition to these three major factors, one has to consider the audience size and composition of those who watch Starcraft. I'm going to put 60k as the number of hardcore fans, since that is what the big events will usually top out at for their peak viewers. Of these fans, I imagine that a lot are going to be people either in High School, college, or fresh out of college, all of which probably don't have that much money. Using MLG as an example, you're asking these people to spend $20 to see content that they pretty much could see elsewhere at other tournaments (Homestory, IPL, IEM, TSL4 when it happens, etc.), with a very small fanbase to begin with. Even if you get 10k fans, that is only about $200,000, which from what was posted in the other thread, is a break-even number (and that's assuming you're getting the full cut of the $20 spent per buy). This is without, to my knowledge, any major advertising blitz to make sure people know you have to buy this event (may or may not happen, I'm not sure). I'd say for the first event, MLG will probably get 5-6k viewers, and if they do a second, it will drop down to 4-5k instead of going up.
TLDR: Starcraft due to how its played does not have the storylines to make people emotionally invested in matches, nor the exclusivity among stars to make people want to pay to see said stars compete, and is doing this with a fanbase that is dwarved by other people with a history and experience in providing PPV content.
Conclusion:
Related to MLG, they will fail. I'll be genuinely shocked if they succeed. If they are insistent on the PPV model, their best option would be to follow pro wrestling and UFC, and have the opening rounds (Thursday/Friday/Saturday) be for free. Plug constantly during these shows that the Sunday championship will cost money to watch, and use the weekend to plug and set up the storylines and the exclusive feeling of seeing said conclusion to the storylines to make people want to spend a small amount of money to see said conclusion. Otherwise, going by the history of PPV companies, they will not succeed in their venture.
