FanPost

The WWE Network Objective

SVOD (Streaming Video/On Demand), has been a central part of my job for over a decade. The WWE model is interesting because it's a hybrid. Like the sports world, the core business is broadcasting live events; the last bastion for advertisers to find a non-DVR audience. But unlike MLB and NFL, WWE is year-round production. The seasonal difference opens MLB and NFL to more adults who are willing to dish out for a six month pass.

This aligns The Network more with Netflix, who continually has to offer new content. Except, Netflix will always license more titles than they could ever originally produce. When House of Cards costs 100 million, selection becomes paramount.

The reality for WWE though is the underlying admittance in having their own channel. The big money for The WWF was its ability to draw "casual" fans, people who didn't give a damn about every storyline but turned in for Hogan and Mr. T, or The Rock and Austin. The "Events" of pro wrestling history.

WM29 and the subsequent PPV buyrates had a harder lesson than most of us understood. Simply, Cena will never be in Rock, Austin or Hogan's league of recognition as that mass audience is no longer to be found. It's not a personal knock on the guy, it's a simple fact the numbers don't lie.

The Network has a subtle message; Wrestling may still be popular, but it's a more specialized market. WWE realizes seven million viewers is now a ceiling, not an average. Streaming is about drilling down, about getting every last person in your demo to chip in and for those who have been around, this is a huge change as Vince has always cast big and wide to find his audience, which is why he never gave a damn what the diehards thought. But now, when WWE states they can generate a million subscribers in one year, that means The Network is coming for every last diehard.

Some think a million members is easy. I don't. First off, The Network is rolling out stateside only, then expanding internationally. If you don't think international streaming is complicated, just look at this Netflix map.

And they're the gold standard for streaming service.

If you want a comparable model, then put your politics aside and consider Glenn Beck's The Blaze, because WWE did, as they're using the same foundational structure and partners as The Blaze. On FNC, Beck did 2-3 million viewers at 5PM everyday for one hour for about 2.5 years. The Blaze, which has done a multitude of original projects and weekly series, have plateaued somewhere over 500 thousand subscribers and with similar price packages as the WWE offer.

Considered the metrics. What does this forecast for WWE, when their main property is still going to be on basic cable? Raw can't leave cable or else it's lights-out for The Network, and that's the big reason Vince is going into negotiations looking to double his current rates; he needs someone to foot the streaming bill. To use Netflix again, they account for roughly 30% of all bandwidth, but refuse to detail how much that costs.This issue was alluded to in the WWE conference call.

If we factor in PPV buyrates as a base for the paying audience, we first need to look at stateside-only purchases:

Royal Rumble (1/27): 579,000 worldwide (364,000 domestic)
Elimination Chamber (2/17): 241,000 worldwide (181,000 domestic)
Wrestlemania 29 (4/1): 1,104,000 worldwide (662,000 domestic)
Extreme Rules (5/19): 245,000 worldwide (137,000 domestic)
Payback (6/16): 198,000 worldwide (108,000 domestic)
Money in the Bank (7/14): 199,000 worldwide (151,000 domestic)
Summerslam (8/18): 296,000 worldwide (185,000 domestic)
Night of Champions (9/15): 175,000 worldwide (92,000 domestic)
Battleground (10/06): 122,000 worldwide, (87,000 domestic)
Hell In A Cell (10/27): 212,000 worldwide (121,000 domestic)
Survivor Series (11/24): 179,000 worldwide (95,000 domestic)

Average domestic - 200,000 buys

When you look at total buys from 2006-2013, we see a steady decline

2006: 5.75 million

2007: 5.2 million

2008: 5 million

2009: 4.5 million

2010: 3.6 million

2011: 3.9 million

2012: 4.0 million

2013: 3.6 million*

So somewhere between averaging 4 million Raw viewers and 200 thousand PPV buys, WWE sees a projected 1-2 million subscribers.

From my perspective, if they hit 500 thousand subscribers by Wrestlemania, they're on track for big success. If it takes until Summerslam, then they can honestly blame the economy and a fractured market. If they're staring at 500K come Survivor Series, they got a problem. I see between 750-850,000 paying subscribers for the year in their current form.

But what The Network provides is content flexibility to find a wider audience. For example, the announcement that Smackdown and NXT will go live feels like a precursor for streaming house shows.

House shows are exclusive content that won't interfere with cable contracts while creating a greater "WWE Universe" feel by turning smaller markets into micro-Raw/Smackdown shows that can, if desired, expand storylines. Take the first appearance of Daniel Wyatt at a house show; in the "Network stream" that becomes a 72 hour weekend buildup to Monday's Raw.

So with all the possibilities, what's the downside? Obviously, the production toll could get worse, which is why a lot of the announced WWE content is filler.

They can add all the libraries they want, but as of now it will only eat more storage than get plays because, quite simply, old wrestling looks old. A unique opportunity would be allowing members to mix historical video with an open DLC game system. For example, you could use a real Freebirds ring intro from their NWA days in a match against The Shield, then either record/choreo the game fight or go live via MMORP, XBOX, PS, etc...

But things like a WWE-Centric Sportscenter will not work if it won't recognize anything outside the WWE Universe. How much recap do we get already on Raw? Raw AM? Smackdown? The syndicated shows? You can only re-appropriate so much before it dilutes the core product. Now, take Jericho and Austin's podcast and use that for a two-hour weekend block and people will watch because WWE cannot control who they talk to or what they say.

WWE has hired so many soap opera writers over the years, why not produce an actual soap opera and run it mid-day? Hell, make it a telenovela with Mysterio, because you know he'll be back on the shelf by summer. And if that sounds absurd, consider they once pitched a sitcom around Santino. The Network now provides a lab to test crazy ideas and see if an audience exists. Otherwise, it's a massive on-demand library and PPV service and that's not going to hold a million subscribers attention once the novelty has worn off.

Overall, I think WWE has the best shot of making a channel work because they have all the other pieces in place, but the reliance on Raw's fees calls for a greater diversity out of their comfort zone.

The FanPosts are solely the subjective opinions of Cageside Seats readers and do not necessarily reflect the views of Cageside Seats editors or staff.