When we last visited the topic of the upcoming WWE Network, nobody had a clear answer as to what the Network would be all about in 2014. Thanks to a recent interview with Bryan Alvarez, we have a better idea of what Stamford has in store for their fans.
And I think the news is more positive than negative.
Initially, the concept of WWE Network was to be a traditional cable subscription channel (like HBO or Showtime) that would be carried by all the major television distributors in the States. It would be a gamble given that cable networks make their money on carriage fees rather than subscriptions, but it would still be a business risk based on a cable channel model that’s a well-known idea.
According to Mr. Alvarez, the WWE Network will not be a traditional cable channel carried on all satellite & cable platforms. It will be an Internet television property.
“If they had their way, they would be attempting a traditional cable television channel. The reason that they are making this move is because they couldn’t get that. They couldn’t get anybody to agree to pick up the network. This is not so much forward-thinking as ‘our original [idea] isn’t going to work, what will work?’ And now they will try to spin it as forward-thinking. Believe me, if they could get a Golf Channel-type deal, they would do that.”
How will the new WWE Network change their PPV business model?
So, now we know that they will focus their energy on pushing all their archives & B-level PPVs online for a monthly subscription fee. But what about the major WWE wrestling PPVs? Supposedly, they will remain on traditional PPV. If the tradeoff for a new WWE online network is to ditch the B-level PPVs but maintain four big PPV events a year, that sounds like a winner.
There will still be pressure on Stamford to get 1 million subscribers for the new WWE online network, but the costs of going online will be substantially cheaper.
“My feeling is that it is going to continue to grow. WWE is making the right move by trying to avoid doing a legitimate NFL Network-style cable deal because I don’t think that there’s any way they can get the numbers to support that. But if they can keep costs low by going the Internet subscription route and if they can get a strong infrastructure so the thing doesn’t crash … this is the way things seem to be going in the future. I think they are taking a significantly smaller risk doing it this way and I think they’re coming across like a forward-thinking company as opposed to a backwards-thinking company.”
The proposed WWE Network would heavily focus on the 60,000+ hours of classic programming they have of old Mid-South, NWA, ECW, and WCW footage. Mr. Alvarez noted that Classics on Demand drew 80,000 subscribers but was considered a failure because there were only 20 hours of new content produced each month and WWE chose which programs to air. With an Internet property, WWE could allow fans significantly more shows to select from in terms of viewing enjoyment. That is an enormous strength.
The proposed WWE online network would be relying on a much younger demographic that was born and raised in the DVR era. For veteran wrestling fans, watching live wrestling programming still matters. For the younger fans, it’s not as important to sit down at a scheduled time in order to watch an event. The UFC is able to command significant cash from Fox Sports because their live programming is considered “DVR proof” and thus more people are willing to go out of their way to push everything else aside to sit down and watch the show like they would watch a football game. With WWE, the feeling is that more of their viewers will DVR shows and watch programming for consumption at a later date. Despite WWE’s audience skewing young (their App attracts a bunch of pre-teens), only 10% of RAW’s audience watches the show view DVR. With Hulu and Netflix conditioning television viewers through the “zero TV” philosophy of on-demand content, WWE Network’s gamble as an online property may prove to be wildly successful with the demographics they appeal to the most.
Part of the strategy in obtaining a million subscribers for the new WWE Network is to try to grab old wrestling fans who faded away after WCW died by offering an insane amount of old-school wrestling footage for $15 a month. When WWE bought out the assets of WCW, the WCW loyalists disappeared. If you combined the peak ratings numbers of both WWE & WCW during the Monday Night Wars and compare that number to the number of viewers WWE attracts today with RAW, over 75% of the fan base that watched wrestling on Monday nights is gone. Can the new WWE Network be able to bring some old-school wrestling fans back in the fold and entice them to pay for today’s current WWE product? It’s one of many fascinating questions that we’re going to find out in 2014.
Onwards and upwards for World Wrestling Entertainment.