Professional Wrestling Just Bodyslammed Their PPV Business Model

from the mind-equals-blown dept

World Wrestling Entertainment, Inc., or the WWE, has previously not been known as the kind of company that is forward-looking in their business model efforts. The purveyors of professional wrestling made many lists of companies in support of SOPA and CISPA, while CEO and frontman Vince McMahon has, in the past, been quite lawsuit-happy when it comes to even the most modest relation to company trademarks. All this was done as the company dragged its feet more doggedly than any other sports entertainment company in holding onto their now-iconic pay-per-view business model. Even as they signed more and more network and cable television deals, those broadcasts all seemed to be chiefly used to push fans towards live events and the big events broadcasted solely on PPV.

And now, with a suddeness that is a little breathtaking, the WWE is leaping into the modern era with both feet in a way that far surpasses their more legitimate sporting brethren.

Starting on February 24, wrestling fans are going to be able to sign up for the WWE Network, an online 24/7 channel that will stream all of the company’s 12 monthly pay-per-views, including Wrestlemania, and offer all of those, some original programing, “years” of old Raw and Smackdown episodes and… every single PPV show from WWF/E, WCW and ECW history. And NXT and Superstars. And live pre and post-shows for Raw and Smackdown. All of that for just $10 a month, with a six month commitment. That puts the initial bill at $60.

That math is extreme, to say the least. Comparisons to what the WWE was asking their fans to pay in the PPV model were far more expensive, without even the most modest offering online in comparison. For them to now offer streaming of everything at that kind of price represents a huge departure that simply has no equal amongst professional sports. I’m not much of a professional wrestling fan, but I’m rooting for this to work wildly enough to grab the attention of the NHL, NBA, NFL and MLB, who offer online streaming services, but with more restrictions and price barriers than I care to recall.

So, why are they doing this? Well, likely the biggest reason is that the company can see the writing on the wall when it comes to how people today expect to get their entertainment.

WWE will still offer their 12 big shows through PPV, if people are interested, but the forecast here is pretty clear: PPV is the fool’s option going forward. WWE does still broadcast its two big weekly shows, Raw and Smackdown, on cable. It will continue to for the foreseeable future. But everything else? It’s online now and it’s just made the gaming consoles and handheld devices of wrestling fanatics like myself much more likely to be the main portals through which we get our fix. Screw the cable box.

That reference to gaming consoles? Yeah, the WWE has worked out deals with Sony and Microsoft to offer this streaming service throgh the last and new generation of consoles. Which is probably the other reason they’re doing this: they’re grabbing up new, younger customers with a streaming service that will bring in regular, predictable revenue. Rather than having fans that might save up to buy one or two PPV events a year, they’re giving them everything at a cost that’s reduced but repeated. It’s a tradeoff that benefits their fans and themselves as a matter of scale and predictability. If it takes off, it’s going to be a huge win all around.

In other words, despite its history, the WWE appears to be trying to give their fans what they want, how they want it, at a price they’re likely to be willing to pay. Considering that their events have been illegally streamed for some time now, often at a lesser quality than a legitimate stream will offer, this is competing with free on a level other professional sports (other than, perhaps, the NCAA basketball tournement) haven’t even tried. For sports fans, you should be hoping this succeeds in a big way.

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Companies: wwe

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Comments on “Professional Wrestling Just Bodyslammed Their PPV Business Model”

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Anonymous Coward says:

Re: Re:

They’re partnering with MLB Advanced Media to handle the streaming end, so I would expect similar quality to whatever you get watching baseball games online.

One minor quibble is that they’re going to be streaming in 720p while all of their HD content has been filmed in 1080i. I don’t know if it is a bandwidth problem, something with MLB’s backend or what, but they haven’t made mention of any intention to stream anything beyond 720p.

Dark Helmet (profile) says:

Re: Re: Re:

“They’re partnering with MLB Advanced Media to handle the streaming end, so I would expect similar quality to whatever you get watching baseball games online.”

I subscribe to the MLB.TV package and I can tell you that the streaming quality has ALWAYS impressed me. No, I don’t think it’s in 1080, but the streams are reliable and in HD. I wouldn’t be surprised if we saw 1080 coming down the line when higher speed internet becomes more ubiquitous. Remember, tons of baseball fans using that service live in places where high speed internets aren’t a thing….

Anonymous Coward says:

Re: Re:

When your primary strategy of beating the internet fails miserably (and because of the stupid grassroot aspect you cannot control in the extremely dirty world of policymaking!), you move on to plan B: Join them!

When the lobbyists are claiming how the world will go under unless such and such is made into law, it is a business strategy. Don’t think for a second they are unable to transition. It is just much easier to fight changes if they seem economically uncertain or unattractive.

OldGeezer (profile) says:

This will work. I have never been a fan of wrestling but I have known a lot of guys that are. Back in the 80’s I had a 10 foot dish and the local cable company did not offer any pay per view. 5 or 6 guys I worked with would pool their money for me order events and come over to my place to watch events. The cost was usually about $50 so this shows that wrestling fans are willing to pay. Figuring in inflation that would probably be like $100 today.

Corwin says:

Vince McMahon IS a business genius.

He’s the guy who took a statewide comapny to DEVOURING its competition, making it a national promotion, then updating its product to compete with the new threat made of money that popped up (WCW), winning the ratings war to the point he bought his opponent for an humiliating price, and now launching a futuristic distribution model that actually sells a flat access to approximately the whole of a century of existence of a entire medium.

Rikuo (profile) says:

Re: Vince McMahon IS a business genius.

I’d hesitate to call this a “futuristic business model” because then that would imply that his company was the first to start streaming. Netflix anyone? (Or was there someone before even Netflix?) Especially since the content as reported by other commentators here isn’t even going to be in 1080p, what with 4K just round the corner.

Anonymous Coward says:

Re: Re:

I think the price is in line with what other streaming services provide. ESPECIALLY if you have any interest in the future live pay per views. Each one of those monthly shows run in the $55 to $65 range. Basically if you would order just one ppv in a six month period, the streaming network ends up being a better value.

WWE also has a huge tape library they have bought up over the years. Over 100,000 hours of footage from many promotions, plus their ongoing shows. And you would THINK that since they own all of this footage and produce it themselves that it would be immune to the disappearing act other licensed streaming content is subject to. Hopefully once a program is uploaded to the network, it is there for ever.

S. T. Stone says:

Re: Re:

For a wrestling fan, ten dollars a month (per a six-month obligation) provides excellent value for what WWE has to offer with The Network.

The average monthly PPV from WWE costs around sixty dollars in HD, and the annual WrestleMania event costs at least ten dollars more. Buying the PPV gives you…well, the opportunity to watch the PPV and nothing else. A dedicated WWE fan could spend upwards of 800$ USD per year just to watch every PPV the company puts out, and that dosh gives them little ROI other than the opportunity to watch the PPV live on TV/streaming devices instead of a crappy illegal stream.

With The Network, WWE not only cuts out the PPV middleman (which ensures higher profits from Network subscriptions), but gives fans an excellent ROI for the cost of a single monthly PPV: six months’ worth of Network service, which includes the live twenty-four-hour linear “network” and the on-demand “Vault” ? both in 720p HD. The linear network includes every monthly PPV (aired live, no less!) as a doesn’t-cost-extra part of the package ? and WWE made sure to launch this close to WrestleMania 30, because it’ll air that PPV (its biggest of the year) on The Network in addition to regular PPV outlets. The “Vault” will include (according to WWE’s presser) every PPV from WWE as well as defunct companies World Championship Wrestling and Extreme Championship Wrestling (a promise that would provide around one thousand hours’ worth of content on its own), on-demand replays of WWE’s weekly shows, on-demand replays of Network-exclusive content, and anything else WWE can find within the hundreds of thousands of hours of wrestling footage it owns as part of its massive pro wrestling video library (which stretches across several decades and includes numerous now-defunct organizations on top of its own in-house footage).

800$ USD a year to watch thirty-seven hours’ worth of PPVs as they air vs. 120$ USD a year to watch several thousand hours’ worth of pro wrestling programming pretty much whenever and wherever you want ? try and figure out which side wins that ROI Steel Cage Match.

Just Sayin' says:

Nice article, but...

I read the article here, and then went to read the source article. I was a little surprised (not really) to find out that the quotes in your article here aren’t from the WWE, rather they are only the personal opinion of Stephen Totilo, a blogger.

His take on their strategy is nice, but only an opinion. The WWE has not said that PPV is a fool’s option going forward. That is Stephen’s opinion, not a quote of anything WWE said.

Further, it looks more like a way to “extend and profit” mostly from their massive back catalog, and to build a bigger fanbase for the PPV events. They aren’t replacing PPVs with streaming, it would seem more like they are trying to reach a bigger audience – I can picture those who don’t control the household PPV buying as being a great target, high schoolers who would love to see the PPV events but their parents won’t buy it on cable.

So it’s an interesting story, but an opinion on an opinion piece and leaving the quotes out there as if the WWE said them is pretty poor writing.

Anonymous Coward says:

I am VERY excited about the network and think it is a fantastic step forward and provides the consumer tremendous value. Funny that I would be much colder on this if it was a traditional cable channel or premium channel like WWE originally tried to sell it to MSOs as. WWE wanted to be paid by the cable companies to carry it, but they couldn’t get a single provide to bite. Then they tried to pitch it as a premium channel, and still no providers wanted to carry it.

I am also very curious how it will impact their bottom line. WWE makes the bulk of their income now from TV rights fees, which will remain in place, assuming their new TV deal goes according to plan in the next year or so. What I see this making a huge dent in is their traditional PPV business (duh) as well as their home video division (which currently brings in roughly $30 million a year).

If they upload all of their new home video releases, who outside of hardcore collectors or people without decent Internet would actually buy the discs? Or do they go with some sort of time window to protect physical releases before adding them to streaming? Cut out the bonus features and extra matches like they did with their Netflix releases?

DirectTV has already issued a statement threatening to drop WWE’s PPVs from their service. I wouldn’t be surprised if other providers make similar noise, or even follow through.

I’m curious to see what their actual offering ends up looking like. If it takes off and is at least moderately successful, it will protect WWE in the chance that they ever lose their TV deals.

out_of_the_blue says:

HOLY COW. $10 a month for wrestling, and Timmy thinks the fans are smart!

I read this with growing horror and laughter. My bet is WWE found that most fans are simply too stupid to do illegal downloads. Wrestling is surely at the bottom of the mindless crap pile, or so I hope. Therefore any “competing with free” (like how you worked that silliness in, Timmy) exploitation of mental defectives can’t augur any new business models.

Congratulations, Timmy for yet another low. Your ability to be pompously silly and apparently take your childish notions seriously keeps the yuks coming.

Ya say ya can’t compete with free, Binky? — It’s easy! Just forget about “sunk (or fixed) costs”!!!


S. T. Stone says:

Re: HOLY COW. $10 a month for wrestling, and Timmy thinks the fans are smart!

WWE found that most fans are simply too stupid to do illegal downloads.

On the contrary: WWE pay-per-view events get pirated/illegally streamed at rather alarming rates. WWE took The Network to the Internet partially to counter all the illegal streaming. Offering a higher-quality alternative to a once-per-month illegal livestream at low cost ? and one that includes thousands of hours of other WWE-owned content for the same cost ? makes The Network look like an awfully good deal in comparison.

Wrestling is surely at the bottom of the mindless crap pile, or so I hope.

Eh, don?t sell wrestling fans short. I?ve seen plenty of excellent writers expound upon the artistic merits of pro wrestling and its unique storytelling methodology. (I recommend K. Sawyer Paul, David Shoemaker, and T. Holzerman.)

Therefore any “competing with free” [?] exploitation of mental defectives can’t augur any new business models.

I hope you didn?t mean to call pro wrestling fans ?mentally defective? just for liking that specific form of entertainment. The vast majority of fans know of its staged nature, but don?t believe that takes away from the work every man and woman who steps into the ring does to entertain millions of fans around the world.

And yes, WWE has competed with ?free? for years. Ever since the rise of streaming video content and Bittorrent, WWE has seen PPV revenues (and TV ratings) drop in part because of illegal livestreams and filesharing. The Network gives WWE a chance to lay the smack down on the illegal ?free? content by offering a high-quality service with tons of content for an affordable price.

Now, I know a Raw feed of WWE programming may not appeal to you or the NXT person, but a Main Event-caliber idea such as the WWE Network deserves a bit of Thunder behind it ? a little Nitro, if you will. WWE needed to take Extreme measures to ensure the future of the company and its Superstars. This announcement has lots of Velocity behind it, so don?t try to cool the Heat off of it too quick. Give it until Saturday Night, at least.

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