Will the WWE network be a subscription channel?

It has been almost two months since we last heard any news about the WWE network, which is a bad sign for its future and meeting the latest goal of a launch date before the end of 2012, after missing their initial WrestleMania 28 target. Vince McMahon promised an announcement to be made on distribution partners for the network within three months in early May, but the fact that no movement on such deals has been reported suggests that recent negotiations haven't been any more fruitful for WWE.

If they can't find carriers on an existing cable package, then the only options are to make it a subscription service or to give up on the whole idea. The latter is not an option as they've already invested millions of dollars into making their dream of a WWE network into a reality.

So it should come as no surprise that WWE are now heavily considering making the network a revamped version of their WWE Classics on Demand channel, as Mike Johnson of PWInsider.com reports:

In recent weeks, WWE has been looking at a model for their proposed network that would see them roll it out as a paid premium channel where subscribers pay "x" a month to their cable or satellite provider to have access to the channel, as you would for HBO.

The feeling is that it would be easier to roll the channel out in that fashion because it would guarantee money for the providers as opposed to expecting them to pay WWE for the content, at least initially.

Dave Meltzer in today's Wrestling Observer Newsletter confirmed that this is a strategy WWE has in mind if their plan A of getting cable systems to pay for their network falls through, but notes that this is a much riskier business model.

This is very true, as WWE currently earns only $1 million per quarter from Classics on Demand, down 45% from a peak of $1.8 million and about 150,000 subscribers at the end of 2007. Even at the peak, that revenue was far from enough to fund the cost of a full time network with new programming on a daily basis. With the worldwide economy still in rough shape and having not shown their current pay channel the attention it deserves, getting enough subscribers to make the WWE network a profitable venture off the bat will be nigh on impossible.

Really, WWE is getting into the crowded marketplace of network TV too late in the game, when their popularity is close to an all time low. The bad timing suggest that this has the potential to be the latest in a long line of big money losers for the McMahon family outside the comfort zone of their traditional wrestling business.

Indeed, McMahon has had a reverse midas touch with every other entertainment venture he's attempted, all of them ending in embarrassing failure, whether it be the Sugar Ray Leonard vs. Donny Lalonde boxing pay-per-view in 1988, the World Bodybuilding Federation in 1992, the XFL in 2001, their Times Square restaurant WWE New York / The World in 2003 or WWE Films, which is still surviving by a thread after heavy money losses last year. With them already investing eight figures into the WWE Network, it's hard to see how this project won't follow suit.