Commercials on PPV

[Dagger Dias]

I think that the PPV shows should not have commercials unless they are for upcoming WWE events or an advertisement of a cross promotion that has WWE guys in it such as The Miz appearing on a talk show or something. I am also ok with traditional commercial styled ads if they have wrestler cameos in them. Regular ads are where I draw the line though because if I have to pay to watch the show then I don't want to see any of the same boring annoying commercials that come on regular tv. That's what regular tv show commercial breaks are for.

 

[TWJC: The Beginning]

Your right, why would a PPV's success be judged on how many people Paid to View How is the number of people that paid for the events 'bogus', 'selective' or not 'looking at the whole picture'? The American economy is doing worse than this time last year, hence their credit rating dropping (that makes increased buy rates more remarkable). The amount of streams? Please, tell me were you get this info and (again) how that cheapens increased buys. If your going to accuse me off selectiveness, how about your own assertion of the massive profits they make ($20m a quarter, I believe was your 'well researched' figure); surely that supports that they don't need to resort to advertisements?



Pretty sure I mentioned them bringing in celebrities (something about the RAW Guest Hosts and how that played out). I love many musical artists and attend many concerts, there is not one that would tilt me into paying for a wrestling PPV.

Shareholders and sponsors? How does Cee Lo Brown appeal to either, was it described as the Twix musical interlude? How does copying the SuperBowl template say "we are a modern up to date media conglomerate"? What other conglomerate uses this profile? In the SuperBowl, the half time show is logical because the game isn't on - it's dead time. WWe doesn't have a half time, so casual fans are wondering "What's the link here?" and educated fans are decrying the wasted time that could have been used for the core product.

I thought the Rock's contributions at the past WM were, in general, too overbearing but many lapped it up and (your hated) buy rates indicate this. Why? Because, he actually relates to the product. All the most remembered celebrities (Mr T, LT, Mayweather, Rock) were involved in the product. As far as Kid Rock and Brown are concerned, I don't believe even their biggest fans will look back at their WWe moments fondly.

You said that if the WWE makes a good enough show, people will buy instead of stream. This is bogus. There are 2 markets, those that stream, and those that don't. Those that stream WILL stream everytime because 0<any price the WWE will charge. Those that don't stream are those who likely have mor money, so to them the difference between 40 and 50 isn't much, so why not charge 50? You're right, where DO you find the number of streams? My guess is the WWE has people working on that and that's why it's priced where it is.

You don't get it, the market isn't uniform. Market 1, people with money. Their demand is pretty inelastic. They will pay 30, 40, 50 dollars, doesn't really make much difference to them. Market 2, people with less money who stream, are also extremely inelastic. 30, 20, 10, they won't pay because all those numbers are greater than 0. That's how streaming lessens the amount of buys they have. If WWE puts on a better PPV, and gets more buys, it's because more people in market 1 pay for them. I bet there are ALSO more streams when there are more buys.

What the fuck are you even talking about at the end? I'm sorry, it was actually 14,276,000 dollars last quarter, I threw a number out there, turns out I was pretty close. http://finance.yahoo.com/q/is?s=WWE So how is that "selective" it's off their fucking income statement which is kind of where you look to see how much they're making. Not only that but it does NOT mean that they don't need to advertise. Companies need to consistently have higher quarterly earnings than the year before (Q1 2011 vs Q1 2010, you can't do Q1 2011 vs Q2 2010 because of the business cycle so it's innacurate). They need to do this because that means growth to stockholders. If there isn't growth, then the stock doesn't grow, people sell, and the value goes down. So no, just because they make a shitload doesn't mean they don't need to try to make even more.

Using Cee Lo Green makes them a more legitimate media company. If you don't get that, then you don't have a brain. Without the musical and movie talents they bring in, WWE wouldn't be where it is. Lots of media outlets give them more exposure because they have those guys. Sponsors like it because you're branching out the brand. What is your business background?

I don't hate buyrates, how the fuck do you draw that conclusion? The argument is that people who stream will pretty much always stream (economic principle of excess utility and how people will always seek it). Just because buys go up doesn't mean that was because less people streamed. Try to keep up. This isn't "everyone either streams or doesn't watch" but more like "some stream, some who can stream don't stream or watch, some don't stream and don't watch, some don't stream and do watch".

Like I said, there are 2 different markets. Those who have less income and stream pretty much anything because, as I've tried explaining to you so many times, free<any price. Then the market of those who have enough money that 50 dollars doesn't matter to them. This is ALSO in a way tied to utility. Each additional item you have, you recieve less utility per item. So if you make a ton of money, the difference between 30 and 50 dollars isn't very much. So if you're interested in buying a show, whether it's 30 or 50 dollars, you're likely to buy it. The streamers won't buy regardless most of the time. So why even worry about that market? You price your product to get the most money.

Not only that, but as I said, we don't know what PPV companies charge. If WWE has some statistician run the numbers and he says "we will likely have 500 thousand buys with a variance of 50 thousand, then the WWE looks at the price PPV companies charge, and figures out what they need to even make a profit.

My guess is that the WWE did statistical analysis using various price points and looked at the history of the market. Maybe multiple regression, and looked at the correlation coefficient. They probably found that the difference in buys from 30-50 dollars isn't that much, but that much past that buys drop significantly. They probably can't make much of a profit with a price below 30. Thus, they price it what they do.

Do you understand any of this or is all you're going to get from this is that I don't like buyrates as in indicator (which I never said)?

Bottom line is I'm not saying a better quality build won't lead to more buyrates, because it will. I'm saying the reason they have commercials is because they want to make more money and likely lose thousands of buys to streaming video. People who stream will stream regardless of show quality, if anything, a better show means more streams. It's hard to find the number of streams because it's illegal but I bet the WWE can hire people who have the tools to find out.

Think of it this way. Decent show, 20 thousand people stream (estimate, I have no idea what a realistic number is), and 500 thousand people buy. Great show, 50 thousand people stream, and 700 thousand people buy. Either way you're losing money to streaming. Either way a better quality show means more buys.

 

[Starchild]

I'm gonna agree with Dagger here and say there's a line that shouldn't be crossed. For years they've had enough to fill shows with using commercials and with now being the most interesting WWE has been in quite some time, I think they could find a better use for the time than some commercial that we have to sit through 14 times during Raw and Smackdown.
If this trend continues it'll be like watching videos, movies, etc. online. It used to be a great way to catch up quickly with a show you may have missed, watch some entertaining videos on Youtube or similiar sites, or whatever you liked. Now I find myself getting pissed when for every 5 minutes of watching there has to be 30 second - 1 minute commercial spot. The internet sites have sold out and now it looks like WWE may be starting a new trend where ppv broadcasts do as well. Maybe it was a one time thing and won't happen again or just won't catch on, but if it's not something to promote the product or a future show/ppv then it's not something that needs to be on there.

 

[TWJC: The Beginning]

I'm gonna agree with Dagger here and say there's a line that shouldn't be crossed. For years they've had enough to fill shows with using commercials and with now being the most interesting WWE has been in quite some time, I think they could find a better use for the time than some commercial that we have to sit through 14 times during Raw and Smackdown.
If this trend continues it'll be like watching videos, movies, etc. online. It used to be a great way to catch up quickly with a show you may have missed, watch some entertaining videos on Youtube or similiar sites, or whatever you liked. Now I find myself getting pissed when for every 5 minutes of watching there has to be 30 second - 1 minute commercial spot. The internet sites have sold out and now it looks like WWE may be starting a new trend where ppv broadcasts do as well. Maybe it was a one time thing and won't happen again or just won't catch on, but if it's not something to promote the product or a future show/ppv then it's not something that needs to be on there.

You bring up a good point with the net. Even they have commercials. Everyone tries to make more money. "Sellouts"? That's just a term people who don't understand business and who don't like money like to use when someone else uses their business savvy to make money.

In the European League, teams have advertisers on their jerseys, it turns me off. I'm not going to root for the Manchester United Aon or whatever their sponsor is. In football, there are advertisements on the net they raise when they are going for a field goal. In minor league baseball, the outfield wall is covered in advertisements. At turner field in atlanta, they have a giant coke bottle that shoots out fireworks. It's all ridiculous and you could say "sellout" but they're making money. I'd rather be a "sellout" and make money than not make money and "stay true to the fans" or whatever bullshit.

WWE has a reason for doing this. Maybe it's wrong, maybe after a few PPVs, buys will drop and they'll stop the commercials.

However, here's how it works. WWE gets X amount of money from commercials. Let's say they make Y in buyrates. If the change in Y from people not buying due to the commercials is less than X, then we still have commercials and it makes good business sense.

It actually gets a lot more complex than that. You have to look at the amount, the type, and the timing of the commercials. This is where it gets really tricky for the WWE. Because, if they do the right kinds of commercials (I'm guessing action movies over romantic comedies), just 1 or 2 as opposed to 1 after every match, and at the right time (probably middle of the show piss break), then they'll be more likely to make money.

They're smart though, they have statisticians and researchers with more knowledge and resources than me. WWE never does anything unless they think it will make them money.

 

[FitFinlay4Life]

You said that if the WWE makes a good enough show, people will buy instead of stream. This is bogus. There are 2 markets, those that stream, and those that don't. Those that stream WILL stream everytime because 0<any price the WWE will charge. Those that don't stream are those who likely have mor money, so to them the difference between 40 and 50 isn't much, so why not charge 50? You're right, where DO you find the number of streams? My guess is the WWE has people working on that and that's why it's priced where it is.

Methinks there is a miscommunication here, I said more 'people' will purchase a strong PPV, not more streamers. I never got into the price debate, just simply stated that commercials being featured because PPV buy rates are dropping is not a valid reason. However, I have seen people on this site stating that they purchase the major PPVs and stream the weaker ones, so I do think there is a middle ground between the two.

You don't get it, the market isn't uniform. Market 1, people with money. Their demand is pretty inelastic. They will pay 30, 40, 50 dollars, doesn't really make much difference to them. Market 2, people with less money who stream, are also extremely inelastic. 30, 20, 10, they won't pay because all those numbers are greater than 0. That's how streaming lessens the amount of buys they have. If WWE puts on a better PPV, and gets more buys, it's because more people in market 1 pay for them. I bet there are ALSO more streams when there are more buys.

No doubt, streaming is this millenniums piracy. Once again however, this only makes commercials a necessary evil once it's detrimental effect causes people in Market 1 to start jumping to Market 2. I agree that streams will increase for strong PPVs, however, I would counter that this would have a reasonably inelastic proportionate effect (ie, say 70k stream for 700k buys, then 100k will stream for 1m buys). The WWe business model is showing it can handle the current proportions but were they would suffer is if the proportion of streams to buys increases.

What the fuck are you even talking about at the end? I'm sorry, it was actually 14,276,000 dollars last quarter, I threw a number out there, turns out I was pretty close. http://finance.yahoo.com/q/is?s=WWE So how is that "selective" it's off their fucking income statement which is kind of where you look to see how much they're making. Not only that but it does NOT mean that they don't need to advertise. Companies need to consistently have higher quarterly earnings than the year before (Q1 2011 vs Q1 2010, you can't do Q1 2011 vs Q2 2010 because of the business cycle so it's innacurate). They need to do this because that means growth to stockholders. If there isn't growth, then the stock doesn't grow, people sell, and the value goes down. So no, just because they make a shitload doesn't mean they don't need to try to make even more.

I was quoting your attack on my post. My figures were also from WWe (and completely accurate) but you deemed them 'selective' and that using them made my claim 'bogus'. An increase in PPV buys should lead to increased earnings, correct?

Using Cee Lo Green makes them a more legitimate media company. If you don't get that, then you don't have a brain. Without the musical and movie talents they bring in, WWE wouldn't be where it is. Lots of media outlets give them more exposure because they have those guys. Sponsors like it because you're branching out the brand. What is your business background?

I'm a unit manager for Great Britain's second highest employer and my unit topped the savings league in my region in the last financial year.

Using celebrities is fine and dandy, what I question is the need for a twenty minute set. Would Cee Lo singing the national anthem have produced less main stream exposure?

I don't hate buyrates, how the fuck do you draw that conclusion? The argument is that people who stream will pretty much always stream (economic principle of excess utility and how people will always seek it). Just because buys go up doesn't mean that was because less people streamed. Try to keep up. This isn't "everyone either streams or doesn't watch" but more like "some stream, some who can stream don't stream or watch, some don't stream and don't watch, some don't stream and do watch".

Again, I didn't join the streamer argument. I just pointed out that PPV buys had increased. No need to 'keep up' on an argument I wasn't part off, especially one that, by your own admission, we don't know the extent off.

Like I said, there are 2 different markets. Those who have less income and stream pretty much anything because, as I've tried explaining to you so many times, free<any price. Then the market of those who have enough money that 50 dollars doesn't matter to them. This is ALSO in a way tied to utility. Each additional item you have, you recieve less utility per item. So if you make a ton of money, the difference between 30 and 50 dollars isn't very much. So if you're interested in buying a show, whether it's 30 or 50 dollars, you're likely to buy it. The streamers won't buy regardless most of the time. So why even worry about that market? You price your product to get the most money.

Again, you're arguing something I didn't dispute. When did I mention prices?

However, I will argue for Market 3 - "I will purchase the PPVs I want to see but I'll stream (most likely after the event) the matches that interest me in the generally weaker affairs". If only one or two matches grabs their interest why would they sit through the whole affair and pay big money to do so, when they can stream it after the event and just watch the matches they care about. However, they are happy to reward the WWe with their hard earned cash when they produce a quality show.

Not only that, but as I said, we don't know what PPV companies charge. If WWE has some statistician run the numbers and he says "we will likely have 500 thousand buys with a variance of 50 thousand, then the WWE looks at the price PPV companies charge, and figures out what they need to even make a profit.

I'm lead to believe that WWe operates a similar system in the States as the UK. This would mean that they negotiate a multiyear deal with TV and PPV providers. As such, the charges for each PPV would remain constant over the duration of the contract. Increasing the buy rates strengthens their negotiating power.

My guess is that the WWE did statistical analysis using various price points and looked at the history of the market. Maybe multiple regression, and looked at the correlation coefficient. They probably found that the difference in buys from 30-50 dollars isn't that much, but that much past that buys drop significantly. They probably can't make much of a profit with a price below 30. Thus, they price it what they do.

Do you understand any of this or is all you're going to get from this is that I don't like buyrates as in indicator (which I never said)?

And I never said that I cared about pricing strategy. All I stated was that according to buy rates, commercials were not required to compensate for falling buy rates because they haven't fell.

Oh, and by the way, I've an BA in Accounting & Finance if your really interested.

Bottom line is I'm not saying a better quality build won't lead to more buyrates, because it will. I'm saying the reason they have commercials is because they want to make more money and likely lose thousands of buys to streaming video. People who stream will stream regardless of show quality, if anything, a better show means more streams. It's hard to find the number of streams because it's illegal but I bet the WWE can hire people who have the tools to find out.

Think of it this way. Decent show, 20 thousand people stream (estimate, I have no idea what a realistic number is), and 500 thousand people buy. Great show, 50 thousand people stream, and 700 thousand people buy. Either way you're losing money to streaming. Either way a better quality show means more buys.

What I'm claiming is increased advertising and drawn out musical interludes is counterproductive and reduces show quality. As such, less buy rates and (I'd wager) a greater proportion of streams.

I go now to watch a streamed IW;
1) Because it doesn't air in the UK until next Tuesday night; and...
2) I don't have to sit through any commercials.

 

[TWJC: The Beginning]

Methinks there is a miscommunication here, I said more 'people' will purchase a strong PPV, not more streamers. I never got into the price debate, just simply stated that commercials being featured because PPV buy rates are dropping is not a valid reason. However, I have seen people on this site stating that they purchase the major PPVs and stream the weaker ones, so I do think there is a middle ground between the two.



No doubt, streaming is this millenniums piracy. Once again however, this only makes commercials a necessary evil once it's detrimental effect causes people in Market 1 to start jumping to Market 2. I agree that streams will increase for strong PPVs, however, I would counter that this would have a reasonably inelastic proportionate effect (ie, say 70k stream for 700k buys, then 100k will stream for 1m buys). The WWe business model is showing it can handle the current proportions but were they would suffer is if the proportion of streams to buys increases.



I was quoting your attack on my post. My figures were also from WWe (and completely accurate) but you deemed them 'selective' and that using them made my claim 'bogus'. An increase in PPV buys should lead to increased earnings, correct?



I'm a unit manager for Great Britain's second highest employer and my unit topped the savings league in my region in the last financial year.

Using celebrities is fine and dandy, what I question is the need for a twenty minute set. Would Cee Lo singing the national anthem have produced less main stream exposure?



Again, I didn't join the streamer argument. I just pointed out that PPV buys had increased. No need to 'keep up' on an argument I wasn't part off, especially one that, by your own admission, we don't know the extent off.



Again, you're arguing something I didn't dispute. When did I mention prices?

However, I will argue for Market 3 - "I will purchase the PPVs I want to see but I'll stream (most likely after the event) the matches that interest me in the generally weaker affairs". If only one or two matches grabs their interest why would they sit through the whole affair and pay big money to do so, when they can stream it after the event and just watch the matches they care about. However, they are happy to reward the WWe with their hard earned cash when they produce a quality show.



I'm lead to believe that WWe operates a similar system in the States as the UK. This would mean that they negotiate a multiyear deal with TV and PPV providers. As such, the charges for each PPV would remain constant over the duration of the contract. Increasing the buy rates strengthens their negotiating power.



And I never said that I cared about pricing strategy. All I stated was that according to buy rates, commercials were not required to compensate for falling buy rates because they haven't fell.

Oh, and by the way, I've an BA in Accounting & Finance if your really interested.



What I'm claiming is increased advertising and drawn out musical interludes is counterproductive and reduces show quality. As such, less buy rates and (I'd wager) a greater proportion of streams.

I go now to watch a streamed IW;
1) Because it doesn't air in the UK until next Tuesday night; and...
2) I don't have to sit through any commercials.

Of course there is a middle ground, but the bottom line is that WWE has people who are smarter than you and me and have better tools than you and me wanting to do this. So they obviously have a good reason.

I don't know if it's proportionate in a % manner because there are more poorer people in this country than people who have money, that difference is even greater when you look at wrestling fans (generally more poorer).

I wasn't saying that your numbers were wrong, just that they were selective, because they were. WWE knows there are more potential buys out there that are streaming, they know the product is being watched. I wouldn't be surprised if they showed advertisers this because you'll see the ads on the stream as well. WWE might tell advertisers "we had 600,000 buys and research shows approximately 55,000 streams, so 655,000 views of the product as a whole." So really, higher streaming numbers could mean that they make more money on advertising than otherwise.

There isn't logically much of a "market 3" because of excess utility. Why would people "buy if it's good and stream if it's not"? It's free, so you want it for free. Sure there are probably a handful of people in this market. Or what's more likely is that they can only afford maybe 3 or 4 PPVs a year, so that's how they go about it, but if you can get something for free, then you will.

You weren't arguing about streams or price point, but that's part of the argument. Your accounting background is starting to show and my economic background is starting to show. My economic professors told me to never just look at one section. Start looking at the whole thing and ask why. Sure WWE can say "better show = more buys" but when you look at ECONOMIC profit (as it, what you did vs all alternative choices), which is a better gauge of productivity than the accounting profit, WWE is better off running commercials.

More commercials and a 20 minute musical performance might decrease buys. However, if advertising revenue is greater than the decreased buys, it's worth it. That's what you learn in economics. In accounting you learn to depreciate certain assets a certain amount so it looks like you did better than you really did (or worse if you're on a tax cutoff and don't want to pay as much).


No offense, but I think accounting is weak. In accounting, you basically learn how to manipulate numbers. In economics, you learn how to look at the big picture. Finance is good though. Of course, you're from the UK, maybe it's different there. In the US, accountants are basically there to manipulate numbers, not actualy tell you what happened/is happening. My opinion isn't just bashing to help get my point over or whatever. I'm being serious about the accounting thing. My girlfriend's mom is a pretty high up accountant at a very large company. Me and her dad joke with her all the time about how their job is to manipulate numbers and she agrees. She even said that some of her co-workers wanted to depreciate guard dogs. In Economics, that's not what you do. You look at everything, the whole big picture, then say "this is what it is." It's why I don't about focusing only on buyrates. That's not telling the whole story. If WWE can more than cover the lost buys with ad revenue and make more money, they should. Not running ads creates an opportunity cost. Say 1 million in ad revenue or 500,000 dollars in extra buys?

I don't know the exact numbers and we likely never will. I trust that the WWE has people who are looking at the whole picture and have looked at statistics and have done enough research to make this decision. Maybe it is wrong, maybe they don't make enough in ad revenue. My point is that they wouldn't have done it if they didn't think they could make a profit so it probably isn't "well there's a 55% chance we make more money" it's probably something like "with 95% confidence we can say running ads will increase revenue significantly". Whatever "significant is, I don't know because I'm not Vince.

 

[FitFinlay4Life]

I'm enjoying the debate, amigo, and cases can be made for and against commercials and extended musical celebrity appearances.

But from a personal standpoint, I believe that both are a double edged sword. Commercials bring in more revenue and celebs will always be used for cross over purposes. However, as a counter, both can be argued to detract from the primary product. The general response of most people who have ever purchased something like a major boxing event, is 'What's going on with the adverts?' and 'What's Cee Lo Brown's relevance here?'

We can argue the point back and forward but the proof of the pudding will probably be in the future product and if they continue in this vein. I'd imagine there will be a great deal of info gathering [focus group, quarterly viewing stats and gleaning of independent opinion setters (like the IWC)] going on in Titan Towers. If the paying public is willing to accept these things, then they will continue.

I'm aware of the rep some accountants have but I didn't actually use my third level education to get my job. However, I do have the opportunity to use the degree in ascertaining workrates, workhour capture etc. I operate as a delivery manager for Royal Mail (the British USPS), having started as a summer casual postman on completing my degree, and am responsible for how my unit operates. I have also been known, on occasion, to make wee boys of my superiors once anything with a mathematical or financial background becomes grounds for dispute. I think you might have some fun with them also.

 

[TWJC: The Beginning]

I'm enjoying the debate, amigo, and cases can be made for and against commercials and extended musical celebrity appearances.

But from a personal standpoint, I believe that both are a double edged sword. Commercials bring in more revenue and celebs will always be used for cross over purposes. However, as a counter, both can be argued to detract from the primary product. The general response of most people who have ever purchased something like a major boxing event, is 'What's going on with the adverts?' and 'What's Cee Lo Brown's relevance here?'

We can argue the point back and forward but the proof of the pudding will probably be in the future product and if they continue in this vein. I'd imagine there will be a great deal of info gathering [focus group, quarterly viewing stats and gleaning of independent opinion setters (like the IWC)] going on in Titan Towers. If the paying public is willing to accept these things, then they will continue.

I'm aware of the rep some accountants have but I didn't actually use my third level education to get my job. However, I do have the opportunity to use the degree in ascertaining workrates, workhour capture etc. I operate as a delivery manager for Royal Mail (the British USPS), having started as a summer casual postman on completing my degree, and am responsible for how my unit operates. I have also been known, on occasion, to make wee boys of my superiors once anything with a mathematical or financial background becomes grounds for dispute. I think you might have some fun with them also.

I agree that ultimately we'll have to wait and see if this is smart.

Here's my train of thought. WWE will be selective about when they use commercials and musical guests. If they do it every PPV, then no doubt eventually (like 6 months to a year) buyrates would probably drop because of it and the ad rev may not cover the loss. However, if they can pick and chose and only do the ads on PPVs they see a lower buyrate in to begin with to bump up the rev, and only use musical guests for shows in large markets to garner more media attention, I think they'll be able to have the best of both worlds. Sound about right?