WWE Network - Is this the true endgame?

[Dave]

Over the last few weeks we have seen the ratings and overall number of people watching Raw fall to a low not seen since the Attitude Era. A lot has been said about why this might be the case but the fact of the matter is that the figures speak for themselves. I'm not interested in getting into a war of words about the merits of each of those arguments. The fact remains that Raw isn't being viewed the same way as it used to be. A lot has to be said about the way people consume their TV shows now and that brings me onto the whole point of this thread.

Is the WWE gearing towards having their TV shows exclusively on the WWE Network?

I remember before the WWE Network went live in the UK, the WWE were seemingly "locked in negotiations" with Sky Sports over the future of WWE on British TV. I recall, at the time, the WWE were also looking to grab a whole channel for the WWE on the Sky Sports network that easy eventually nixed. Since then, the WWE Network has gone live and the UK fans still get Raw and Smackdown every week on Sky Sports. That said, it strikes me as odd that the WWE would make such a request to Sky Sports. A request, that I feel, shows the hand of the WWE going forward.

Lets face it, the number of people watching Raw and Smackdown live has been dwindling and only ever really goes up during WrestleMania season. The WWE are no fools and, I would assume, realise that their negotiating position is going to be more challenging given that more people are tuning out. So with that in mind, would it make sense for the WWE to wholly transition to the WWE Network to show all of their original content? I agree that they make a lot of money from international broadcast rights. But should they keep all of their programming on the Network, could the WWE stand to be better of by increasing prices and being able to produce the show the way they want to? I don't really want to talk about how it could deliver an edgier product but it is a possibility, I suppose.

I just wonder, is this a fail safe that the WWE are or would consider in the face of falling TV ratings?

 

[therockiswwf]

I've explained why this is a bad idea a few times but I'll do it again. Short answer, no. WWE will go out of business if they put Raw and SD on the Network.

NBC (and other contracts) pay WWE $200 million per year for Raw and SD. NBC makes money off advertisers who advertise during Raw and SD. That $200 million is why WWE cannot survive by going on their Network.

Lets say they do go on the Network. Assuming the price stays at $9.99. WWE would need to get over 20 million subscribers to replace the $200 million they would lose. However, WWE needs 1 million to break-even. So they would need 21 million subscribers. To make the same amount they are now, they would need another million (about the current subscriber count over the break-even point). That would bring the total needed to 22 million. WWE would not be able to attract enough advertisers to replace the $200 million.

WWE made a record revenue last year of $658 million (they have set a new record a few years in a row). Despite that, they only made $24 million in profit. So losing that $200 million would kill them.

Lets say they get the amount of subscribers they need, there is still one remaining huge issue. Attracting new fans. It would be near impossible. People would have to find the Network and decide to pay for something they don't even know if they like. Then they would have to be convinced to stay.

Trying to make their own channel (with Raw and SD NOT being on it) was their original plan. Like a MLB Network type channel. Basically the live stream WWE does on the Network but on a premium TV channel.

 

[MoRtAnDaD]

The only way this could work for both (WWE and NBC) is if WWE Network broadcast the show exactly as USA Network does, including commercials (which at the end of the day, its where the money is for any channel).

NBC can allow WWE to broadcast raw and smackdown, with the condition that the stream must reflect the exact same product as shown on USA.

 

[Garak]

Is the WWE gearing towards having their TV shows exclusively on the WWE Network?

My view has always been that WWE is expecting network TV to fail eventually. They see this as the wave of the future, and got in, basically, at the ground level.

The real problem is that we have network TV dying, and network TV is wearing blinders. I know of no young people under 25 that have a satellite or cable TV subscription. That, in a nutshell, is what is killing network TV Raw and Smackdown, not to mention everything else.

Of course, this is no perfect fix, as has already been pointed out in the thread. Young people are very used to seeing something for "free." They don't want to be paying $9.99 either, let alone a monthly cable bill. On the other hand, even we Generation X people are getting let down by cable and satellite. What I consider good channels are being dropped every few months, yet my bill goes up.

So, it gets to the point, do I really pare back my subscription so I can watch only the bare essentials? Or, should I get rid of network TV altogether, get an antenna for local stuff, and stream the other content I want? TV is changing, and I do think WWE is on the right side of the curve.

 

[Psykohurricane55]

The thing is, fans seem to take the ratings for raw and smackdown to seriously. The fact is that while the ratings have been down for both show, they don't included people that record the show and watch it later on like I tend to do with the third hour of raw. Plus less not forget that wwe did sign a multi year deal with usa network and are making alot of money even if the ratings are down.

the only thing that have change between the attitude era and today is that ratings don't matters anymore. Vince only cares about money and while the ratings are down, they are still making money with both
show plus the deal with hulu which is making them money would probably prevent them to pit raw and smackdown live on the network.

 

[George Steele's Barber]

It's probably a back up plan at this time. It gives them minimal leverage in negotiations with tv stations. It can be used as a stopgap if they are without a contract for a period of time.

But as of now it would be a huge loss. Not many people are not going to sign up for the Network for Raw and SD. WWE could sell commercials but that would only bring in so much business. USA not only values the commercial revenue but also values exposure they can use to promote their other shows. The Network has no value that way.

Maybe they can will get there but they better hope the tv revenue pays enough for a good amount of time until the Network can get to the point where they need it.

 

[Nate DaMac]

The Network was developed to circumvent the need for PPV, not television. The number one source of revenue for the WWE is the television rights fees.

 

[Bischoff's Knob Slobberer]

The ratings will continue to tank as long as the booking is shitty. All the current bookers should be fired because both RAW and Smackdown has the shittiest booking in the wrestling industry. Both TNA and ROH put out a much more entertaining product with more interesting characters week in and week out. Part of the problem with WWE is Vince and Hunter want to push their NXT darlings down everyone's throats. It's not realistic for NXT wrestlers to be put on the main roster and handily defeat established talent. I'm glad Rybach, Sandow, and Rhodes "had a set" and went on to bigger and better things.

 

[rmp0012002]

NASCAR looked into running their races on their own network years back but issues arose and the WWE would have the same. If you only put your content only on your pay network a certain amount people will stop watching because they won't pay for it and you won't attract new viewers that might come across it on TV. You end up constricting your audience. The biggest is giving up all the TV money your getting and trying to replace it, sponsors with big money want their product shown to the biggest amount of people they can.

 

[Garak]

The number one source of revenue for the WWE is the television rights fees.

That's certainly true, but that won't remain forever. Every sport or "sport" out there worldwide right now is having the exact same problems with getting their content out to the masses who no longer simply subscribe to cable by default. F1 in the UK has a problem with declining viewership with fewer "free" options to watch. The same has happened in Canada with the NHL. WWF programming migrated to primarily pay networks many, many years ago, but at least then, overall TV viewership was good.

 

[Dave]

I guess this comes down to who needs who more. Does the WWE need the TV channel and the sponsors. Or do the TV channels and the sponsors need the WWE. For me, Tue WWE has proved to be a hot commodity on TV for the last 10-15 years and I don't think that we give them enough credit for that. Sure, ratings are dropping but that doesn't necessarily mean that less people are watching. It just means less people are watching live. We are moving into an age where people watch on demand more than anything g else. AMD wrestling doesn't have the luxury of being totally unmissable like live NFL does. Realistically, you can watch WWE any time within the week and not miss out on much.

I think the future lies in making the most of on demand programming and that is across the industry, not just the WWE. Soon enough, TV channels aren't going to be paying the same way as they have been. There are only a few commodities left on TV that people will still pay to see and I don't think that the WWE is one of them. With that being said, perhaps the WWE should withdraw their shows onto the network and just see how valuable the TV channels think that theyvare when they're gone. I think TV money keeps people from going out on there own due to total fear of failure. The Network has proven to be successful and I could see it being doubly as successful if it were the only place to get WWE shows. I honestly think that sponsors would still fall over themselves to get a piece of the action.

 

[FromGlasgow]

They will get less new fans watching, How could they continue to appeal to new or casual fans? In a few years it would be less kids buying WWE toys or merchandise, attending live events and only end up a few over 30 year olds subscribing to the network.
I still believe TV ratings is the most important thing, The more people who watch the more successful WWE would be overall as theres more people to advertise to.
I don't know if its just because I was younger but back in the day the wrestlers felt almost like superheroes and felt like I wouldn't last 5 seconds with those guys in a real fight but the guys today like Finn Balor I'm not knocking him particuarly but a lot of the NXT guys it feels like most males I know would have a good chance at taking them in a real fight, They don't look or act the part anymore, I know its always been staged but its just doesn't feel believable anymore.

 

[therockiswwf]

I guess this comes down to who needs who more. Does the WWE need the TV channel and the sponsors. Or do the TV channels and the sponsors need the WWE. For me, Tue WWE has proved to be a hot commodity on TV for the last 10-15 years and I don't think that we give them enough credit for that. Sure, ratings are dropping but that doesn't necessarily mean that less people are watching. It just means less people are watching live. We are moving into an age where people watch on demand more than anything g else. AMD wrestling doesn't have the luxury of being totally unmissable like live NFL does. Realistically, you can watch WWE any time within the week and not miss out on much.

I think the future lies in making the most of on demand programming and that is across the industry, not just the WWE. Soon enough, TV channels aren't going to be paying the same way as they have been. There are only a few commodities left on TV that people will still pay to see and I don't think that the WWE is one of them. With that being said, perhaps the WWE should withdraw their shows onto the network and just see how valuable the TV channels think that theyvare when they're gone. I think TV money keeps people from going out on there own due to total fear of failure. The Network has proven to be successful and I could see it being doubly as successful if it were the only place to get WWE shows. I honestly think that sponsors would still fall over themselves to get a piece of the action.

As I said in previous post, it would take 22 million subscribers for WWE to not lose any money. WWE needs the TV channels more. They need a free product to sell the Network.

WWE is NOT coveted by advertisers due to the fan base. WWE viewers make way less than comparable programming like boxing and UFC viewers. This is the biggest reasons WWE doesn't get real sport type TV contracts.

Again, $200 million in TV contracts. They didn't make $200 million last year. They made $24 million. They cannot survive losing their TV contracts.

 

[George Steele's Barber]

As I said in previous post, it would take 22 million subscribers for WWE to not lose any money. WWE needs the TV channels more. They need a free product to sell the Network.

The number is no where near that high. 22m x $10 x 12 months is $2.6b. For simplicity sake WWE needs an additional domestic audience of about 1.7m subscribers per month to make up lost revenue. Incredibly unrealistic but no where near your number. They could also make up some lost revenue by selling their own advertising.

I agree with you sentiment but your math is way off.

WWE is NOT coveted by advertisers due to the fan base. WWE viewers make way less than comparable programming like boxing and UFC viewers. This is the biggest reasons WWE doesn't get real sport type TV contracts

Again, $200 million in TV contracts. They didn't make $200 million last year. They made $24 million. They cannot survive losing their TV contracts.

It's not that dire but it is pretty bad. They can't lose their contracts next year or in the near future but there may be a point where they can survive without it.

 

[therockiswwf]

The number is no where near that high. 22m x $10 x 12 months is $2.6b. For simplicity sake WWE needs an additional domestic audience of about 1.7m subscribers per month to make up lost revenue. Incredibly unrealistic but no where near your number. They could also make up some lost revenue by selling their own advertising.

I agree with you sentiment but your math is way off.



It's not that dire but it is pretty bad. They can't lose their contracts next year or in the near future but there may be a point where they can survive without it.

22 million per year not month.

As of right now, they need TV to survive. It can change in the future but not in the foreseeable one.

 

[ztwhite]

Young people are very used to seeing something for "free." They don't want to be paying $9.99 either, let alone a monthly cable bill.

Not too sure about this one, at least here in the states. Netflix and Hulu and doing pretty damn well for themselves and both are less than $10 per month. HBO, Showtime, CBS, etc... also offer stand alone streaming services for under $15 per month.

It's more about crafting content to your individual liking. It's just one reason why SlingTV is thriving. It gives people an option to watch all the ESPN channels, along with some other solid quality networks for $20 per month.

Personally, I dumped DirectTV back in January. At the time, I was paying $250 per month for TV and internet combined... and that included everything on DirectTV (premium channels, Sunday Ticket, Extra Innings, etc...). If there's anything I can't access, I use an app called Frostwire on my Mac to download it, convert it to an MP4, toss it into iTunes and use Airplay to stream it to my 70-inch TV (this is how I watch RAW every week).

Now, I pay less than $70 for internet, Netflix, Hulu and WWE Network. In full disclosure, I do use my parents' login info to access channels like ESPN using my AppleTV. But my parents are kind of old and technology is not their thing. They won't cut the cord because it's just easier to pay a bill and flip on the TV.

 

[stingray11214]

First of all, there is currently NO WWE programming on "free" TV. You ARE paying for it, via your Cable bill. It is not on the CW, MyNetwork, This, Antenna TV, Grit, or on any other terrestrial network. When Syndication was king, you could have watched wrestling every night of the week for free. I even remember watching a young AJ Styles wrestling for NWA Wildside on Channel 68, which at the time was the "Urban America" Network. You could just see how great he was going to be.

To put all of WWE content on the Network would be an admission that the "National" era is dying. Indy companies are popping up all over the place, and wrestlers are making a good living in the Indies. To put everything on the Network, you are forcing the fans to pay top dollar for it. The blueprint is laid down by those indies like Minnesota's AWF and Pat Buck's old PWS (Now WrestlePro): Buy the airtime, sell the ads yourself. Local advertisers could care less where their commercials are, as long as they get live bodies walking through that door. PWS had DJ services, dance clubs, comic book stores and even a funeral home. AWF had hunting equipment, winterization, a car dealer and "Your neighborhood Pizza Pub" (Memorable for my Father, rest his soul, would be spinning in his grave if he saw their idea of pizza).

What I am trying to say is that the Network IS the endgame because there will be a point in time when ComcastNBC pulls the plug, and not give Stamford $200 million. ESPECIALLY if they can develop series that will be easier on the wallet. You also have to remember that one of the reasons WWE is on the NBC Networks is because of the long-standing relationship with NBC honcho, Dick Ebersol. Ebersol, though no longer in the NBC top brass, still has some pull over at 30 Rock. Once Ebersol is gone, WWE's days on USA will be numbered. The ratings are going to have to justify the payouts.

 

[Garak]

WWE needs the TV channels more. They need a free product to sell the Network.

The problem is, though, that the channels aren't free. Raw and Smackdown in Canada are televised on pay TV, as in cable or satellite, and I'm sure it's the same way in the States. In the early 1980s, WWF programming was at least on one of the free, over the air networks (which was still cable up here, but our market is rather trivial in comparison).

When people cut the cord, they are no longer part of WWE's TV audience. In the end, WWE has to be able to deliver its content to new, young fans, and cable TV subscriptions are, unfortunately, growing less and less effective at this.

 

[Garak]

Not too sure about this one, at least here in the states. Netflix and Hulu and doing pretty damn well for themselves and both are less than $10 per month. HBO, Showtime, CBS, etc... also offer stand alone streaming services for under $15 per month.

I actually agree with you. WWE Network is just a bit more of a niche product than Netflix and the competition. I wholeheartedly agree that Netflix is a far better value than any satellite or cable TV package I've ever seen. WWE Network would be, for me, a value, because of my interest in the product.

My point was, and I didn't get it across very effectively, is that WWE Network may not be ideal for the casual fan, or a great way to lure fans. There was something to be said for the old concept of channel surfing. I don't know. Maybe WWE needs to make even more content available on Youtube for people to stumble across, with some unobtrusive marketing of the WWE Network.

Singray's point also brings up some other interesting aspects. While I would suggest there are a lot of indy wrestlers not making much money at all, from a fan perspective, it is fairly easy to see some local independent shows for some very, very low dollars.

 

[SharpShootingCrossface]

the fact of the matter is this; we get ppvs for a tenner where it used to cost 40 quid a time. Can't knock that, and the product ìs the best it's been in a decade.AJ as world champ, beat cena clean, beat Ambrose, wrestling is as good as it ever was in the attitude era.

 

[TWJC: The Beginning]

Cable is dying but WWE is still a top 3 show on Cable. Fuck the number, look at the ranking. Over saturation and the fact that people under 40 (their target demo) are leaving cable are the primary reason ratings are dropping.

WWE's market cap is 1.63 Billion. Their stock is higher than it's been in March of 2014. Before that, it never got above 20 (currently at 21.30). Record revenues last year, EBITA was way up.

The Network stabilizes them. Cable needs them more than they need cable. It's a live show. Live shows are the only reason to have cable (or Sling TV). If there were an alternative streaming service for live sports and another (WWE Network) that played all wrestling, cable would be fucked.

You guys doing math of "well they'd need X amount of people to subscribe to make up for the loss of TV revenue", you're not factoring price. WWE could charge more for the Network or add commercials to show Raw and Smackdown live on the Network. Maybe it's $9.99 for what we currently have, and $14.99 for Network + live Raw and SD. Then you don't even need to add that many new viewers. Add commercials to that live Raw and SD and really quantify how many viewers you have (on top of that, you have a captive audience) and you can fill that gap pretty easily.

Increased revenue streams of the brand expansion (2 rosters, more house shows) plus NXT. WWE is in a good place. Only the IWC could look at a company that's top 3 in ratings, record revenue the previous year, highest stock price in 30 months and a price higher than any of the previous to early 2014 and think the company is in trouble.

 

[BestSportsEntertainer]

WWE makes most of their money off the TV contracts and advertising.

If those contracts are cancelled, millions of more people are going to have to subscribe to the Network in order for WWE to get back the money they lost.

Simply put, that isn't going to happen, and WWE would lose a ton of money and eventually go out of business.

Besides WWE is doing pretty good financially. Those contracts aren't going to get cancelled, and WWE is still making a lot of money.

And to everyone saying they could simply raise the price of the Network. Netflix is $10 and offers a lot more variety of content than WWE. Are people really going to pay $15 or $20 or more for a lot less range of content? No, they're not even paying $10 now. Obviously this shouldn't happen.

 

[BestSportsEntertainer]

You guys doing math of "well they'd need X amount of people to subscribe to make up for the loss of TV revenue", you're not factoring price. WWE could charge more for the Network or add commercials to show Raw and Smackdown live on the Network. Maybe it's $9.99 for what we currently have, and $14.99 for Network + live Raw and SD. Then you don't even need to add that many new viewers.

WWE makes $200 million with their current TV contracts.

If those contracts are cancelled, WWE would need 20 million new subscribers (at the Network's current price of $10) to get their money back.

Let's say they raise the price to $15. WWE would need 13 million new subscriber to get their money back.

Neither of those are going to happen.

WWE is in good shape financially, but putting Raw and Smackdown on the Network is not an option.

 

[American Male]

What about advertisements on the Network?

Surely WWE could cover some cost by advertising sponsors on the Network?

Cable TV is pretty much trash now when you have on demand services like Netflix and others. That are much cheaper and give you control over what you watch.

Most people only have cable TV to watch sports. Without sports cable TV would be fucked.

If WWE successfully pulls it off that would be making 100% of the profits.
Potentially more money than ever.

I think it's a risk worth taking they have enough money to cover themselves.

The fact is cable TV is a dying a breed and will die soon so WWE will have to change there model some time in the future.

Most people have Netflix these days so working out a deal with Netflix to air Raw and Smackdown a few days later could reach out to any potentially new fans.

 

[therockiswwf]

What about advertisements on the Network?

Surely WWE could cover some cost by advertising sponsors on the Network?

Cable TV is pretty much trash now when you have on demand services like Netflix and others. That are much cheaper and give you control over what you watch.

Most people only have cable TV to watch sports. Without sports cable TV would be fucked.

If WWE successfully pulls it off that would be making 100% of the profits.
Potentially more money than ever.

I think it's a risk worth taking they have enough money to cover themselves.

The fact is cable TV is a dying a breed and will die soon so WWE will have to change there model some time in the future.

Why would advertisers pay WWE the same amount for their Network when TV reaches vastly more people? How would WWE attract new viewers? NBC pays WWE $200 million a year. That is not a small cost to cover.