The WWE is a company. Its goal is to make money, preferably more money than what they spend. They make money by producing content. That content is sold to consumers, either via live audience, television, Internet, or pay-per-view (PPV). The WWE hopes this content is enjoyable to the widest possible audience, and that enjoyment turns into income. It uses said income to cover its expenses, and if it's successful it will have a profit.
Anyone who has taken an economics class understands this concept. But why do so many professional wrestling fans reject a basic capitalistic principal?
I hate the smarkiness and the cries of doom that follows a post about ratings and buyrates. I never want to get to the point in my fandom where I cry doom at the slightest decrease in numbers presented without any sort of context. Those who spend all their time analyzing the data will absolutely drive themselves crazy and lose sight of what professional wrestling should be all about.
That being said, it is impossible to ignore the business side of things. It's the law of cause and effect. You cannot analyze the story without fully understanding why it is occurring. Ratings and buyrates affect the product. To not understand that is to not understand pro wrestling.
The WWE needs high buyrates and higher ratings to keep surviving. This isn't a doomsday scenario. It is simple fact. The WWE got over 70% of their revenue from "Live and Televised Entertainment" in 2011. That is made up of three major parts: PPV buys (16.2%), Live Events (21.6%), and Television Rights Fees (27.2%), with most of the remaining money coming from venue merchandise.
If Raw ever drops significantly in the ratings, it could lose a fifth of its income. If PPV buys continue to slide downward, that's about a sixth of total cash flow that is at stake. Know what that means? The WWE will need to lean more heavily on live events that it already does. Ticket prices go up, the roster is forced to work more shows, and the product on the whole suffers because of it. There is no artistic value for the roster to be working 310-330 days a year. It hurts the show, and more importantly it hurts the wrestlers. If the ratings and buyrates ever drop significantly, the WWE will suffer for it.
You can sit there and say that PPV is dying, and that there are other streams of income.
You can say that, but you would be wrong.
Brock Lesnar vs. John Cena should have been huge. It wasn't. In no way is that a good thing for the WWE. You can blame booking, either of Lesnar's entire return or how everyone knew that the same ol' Cena would show up. You can blame timing, how Extreme Rules was less than a month after WrestleMania 28 and there simply wasn't enough time to build it properly. Or you can say a B-Show is just doomed to do disappointing numbers, no matter the card.
The point is that match should have done much better than it did.
The idea that 2012's Extreme Rules gained 35K from the year prior is a great thing for business is insane. You cannot assume the WWE is taking all the money from that. Cable companies take over half of PPV sales. The gain is a drop in the bucket for the WWE, when it should have been cascade. And it is our right as fans of the product to wonder how this will affect the show down the road.
Did you enjoy the Avengers movie? Do you think that would have even been possible to make if Iron Man didn't make $585 million at the box office? Do you want to see an Avengers sequel? Well they are sure to make one, since it made a billion at the box office. And you know what? Marvel will continue to pump out movies way past the point of oversaturation. I can almost guarantee that Avengers 12 will suck, but by god they will keep making them as long as the put up those numbers.
If that doesn't convince you, how about another example. Does anyone think that a 3-hour Raw is a good idea? The closest thing I have heard is that it may be decent as long as it is not like every other 3-hour episode of Raw. So why is the WWE expanding its product? Do you think there is any artistic value in producing an extra hour of television?
Nope. We are getting an extra hour of Raw for one reason and one reason only. Because it is the highest rated show on cable television not named Monday Night Football, and because the USA Network is willing to shell out a lot of cash for that hour.
Think about this; you will be forced to consume an extra 52 hours of WWE a year (based on the assumption they don't bail on the format). That is 2+ days of your life you are willing to sacrifice. And that is on top of the 104+ hours of Raw (give or take a few hours due to overrun), 104 hours of SmackDown, and the 36 hours of PPV's. That is just shy of 300 hours of your life on the WWE alone, and that is not even counting NXT, Superstars, or the assorted YouTube series.
How much of that is actually good? 100 hours? 50? Don't tell me that we have 12 ½ days of content to consume because the WWE believes it needs that much time to tell a good story. There is no legitimate reason for that much product to exist
No legitimate reason, of course, except for the fact that they can make a boatload of cash via rights fees.
You know what WWE's biggest worry is right now? It is not how boring John Cena has become, or how to elevate the younger talent. It is how to get NXT and Superstars back on the air. Because that is where the money comes in to keep the lights on. That is how business works.
I am a bad writer. Not because my prose is poor, or I tend to go off on tangents, or because I don't know how to create a deadline for myself. While all are partly true, the thing is that I am a bad writer because I give away my work for free. I am taking time out of my life that I could be spending with my family, my friends, my schoolwork or furthering my career. But I choose to waste my time writing things that I receive no compensation for. Yes, it makes me feel good and I enjoy the response I usually receive.
But it is completely irrational for me to do it.
Everyone loves to call Vince insane. I'm sure he is in some ways. But he is creating a product to make money, and he's had a very successful run doing so.
Perhaps he's the sanest one of us all?