From The Boardroom – In depth analysis on the business end of wrestling: The WWE Network
This November, Vince McMahon announced from the boardroom that the WWE Network would be available for free for a limited time
In what looked like a desperate attempt to win new customers WWE has left current subscribers confused as it isn’t clear if it is just for new subscribers or whether everybody gets it free for a month.
The network, which was launched last January, is a goldmine for hardcore WWE fans, it offers hours upon hours of great historic content at the equivalent price of six months worth of PPV. From a business point of view the idea is great; get a million subscribers, lock them into a long term contract and generate consistent annual revenue (approx $120,000,000) which makes projected earnings more accurate and bigger and in turn drives the share price up and less volatile. Everybody wins. Fans get great content, WWE shares look safer & more attractive and the McMahons live happily ever after. But this isn’t the case.
The problem started back when WWE renewed its TV contract, and although the income from this was higher than the previous contract, it was less than what the directors of WWE had promised investors. This sent WWE shares plummeting and as a result led to the McMahon’s making a number of decisions, which affected the product itself and led to the low subscription rate.
The first decision that went wrong was trying to have Batista and Orton headline Wrestle Mania 30. Daniel Bryan at that time was the biggest thing since Austin and trying to bury him left fans isolated and uninterested in subscribing to a Network that didn’t cater to them. The crowd influence was so big that the fans eventually got what they wanted and left the fans happy and led to an increase in subscriptions. Happy fans = more subscriptions. This spike didn’t last long.
The second issue is that the product is so overly exposed already so WWE fans are finding it hard to justify the value of the network. The decision to have so much of WWE shoved down their throats has left them a little tired of paying for more of the same. Raw is now 3 hours long, add that with Smackdown, NXT, Total Divas not to mention the WWE app, constant Twitter updates and YouTube content, all which is included in TV packages, Internet and mobile phone bills that fans already pay, now WWE expect to pay more on top of that for more of the same. The value of the network is cheaper than 1 years worth of PPV but the shear amount of hours invested in WWE starts to become overwhelming even for hardcore fans.
WWE has had to make a number of budget cuts due to growing fears of making a loss, which resulted in some of the roster having to be released. This again feeds into the problem that the actual show is becoming more similar and more predictable each week and therefore more boring, which drives fans away from then network.
The final problem is the marketing strategy behind the Network. When the share price went down after the TV deal was announced their immediate action was to sell the Network. Now this is actually a great idea but the way the board went about this was wrong. The focus is too much on the price rather than the content that is actually available on the network. All fans ever hear is that WWE Network is available for $9.99, which has turned into a joke. Most casual fans wouldn’t be able to tell you much about the content available on the network but they sure as hell are able to tell you the price ($9.99, just in case you didn’t know). It feels cringe worthy when Triple H or Hulk Hogan come out to try and flog us the network as all they ever focus on is the price. They should focus on the great historic matches that they have on offer or how we can see new stars rise from WWE development shows.
To conclude, WWE Network will not be able to gain many new subscribers unless it starts to focus on its main product. WWE creative have to step their game up and give fans what they want which is fresh new matches and unpredictable storylines. The fan base is there but instead of exploiting them WWE should cater to them. If this happens then automatically the number of subscribers would increase, the share price will rise and the McMahons will live happily ever after as billionaires once again.