Projecting How WWE Network Will Impact Company's TV and PPV Future

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Projecting How WWE Network Will Impact Company's TV and PPV Future
Credit: WWE.com
WWE Network announcement.

As I write this, we're a few days short of the one month anniversary of the launch of WWE Network.  So far, the feedback is mostly positive: Everyone loves the archival footage, most of the new shows have gotten good reviews, and the technical aspects mostly stabilized the weekend after the launch.  Issues with the Xbox 360 app were finally resolved a few days ago and the experience is now, more or less, a universal one.

Still, there are some concerns.  The first live event, NXT Arrival, did have issues with the stream for most users.  The weekly live Main Event streams have gone off without a hitch, but the first impression wasn't the best.  WrestleMania 30, the first major live event (I can't bring myself to say "pay-per-view" in this context) on the network, is obviously going to have the most simultaneous viewers of anything they show in the next year—so it has people wondering—but WWE is putting up a strong front.  They issued this statement when asked about the topic by Daniel Kline of Motley Fool:

Notwithstanding the overwhelmingly positive response to WWE Network, we want to ensure subscribers have the highest-quality experience watching WrestleMania 30 and all our programming, and thus have put in place significant quality assurances.  These steps include increased capacity to handle high volumes of transactions, logins, and concurrent live streams, daily 'stress' testing of all systems over an extended period, and the addition of technology experts to review our plan and procedures. We're confident that we'll be ready on Sunday, April 6.

Meanwhile, WWE is no longer offering free trials after Saturday, March 22nd.  At this point, it's not clear if this is for good or just so it's obvious that you can't get WrestleMania as part of a free trial.

WrestleMania will still, almost inexplicably, be available from most cable and satellite TV providers.  Dish Network dropped all WWE pay-per-view events starting with Elimination Chamber, as they resent WWE undercutting them so much.  Well, it's not like the other providers aren't resentful too, but so far, Dish is the only one to cut off its nose to spite its face by refusing what is essentially free money.  During WWE's last investors' call, they indicated that, after WrestleMania, all of the other providers will only be carrying the shows on a month-to-month basis, so it's possible that the PPVs could disappear from other systems.

Realistically, the only people who are really affected right now are those who live in a remote area, can't get broadband internet and whose only pay TV option is satellite.  If they have Dish Network, they can't watch WrestleMania.  With DirecTV being the only other provider to speak out about being upset with WWE, this could theoretically extend to all satellite-only TV viewers after WrestleMania.  It's a minority, but it's a minority that won't be able to watch the shows even if they want to pay $55 for them.

If you haven't subscribed to WWE Network yet, why not?

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One thing is almost certain: WWE Network's subscriber numbers will peak for the year with WrestleMania 30.  Some skeptics who wanted to see how the stream turned out might sign up afterwards, but getting WrestleMania for $10 (or buying WrestleMania for $60 and getting six months of WWE Network free, depending on how you look at it) is the biggest possible selling point they have.

How many subscribers will they get?  They need 1 million to break even, but we have no good way of predicting, since these are uncharted waters—past WrestleMania buys were at a much less appealing price point.  WWE has stated that about 800,000 to 1 million homes buy two to three PPVs in a given year, so that's certainly within the realm of possibility.  The question is if enough of those homes (and WWE fans in general) have a supported device hooked up to their TVs or are willing to spend at least $50 to get something like a Roku box.  Whatever the number is, WWE is announcing it the day after WrestleMania.

That's not even factoring in that international customers don't have access yet and won't officially get it for about six months to a year.  Some fans outside of the U.S. have found that entering an American address on WWE.com while using PayPal as their payment method will get them signed up, only for the service itself not to work because it's geoblocked.  A WWE representative assured us that if you're outside the U.S. and successfully signed up only to realize the service itself won't work for you, you can get a full refund by contacting customer service.  In the meantime, those fans, who are likely very significant in number in the United Kingdom, Ireland, and Canada, are all locked out.

Even if WWE Network is losing money initially, WWE will be able to afford it if they get the type of bids they're hoping to get for their TV package.  If they hit their goal and double the $139.5 million they made last year, it takes the company into a new stratosphere of profitability and the network could grow slowly if it needs to.  If the network is a big hit AND they double their rights fees, then WWE will have completely changed their business model for the foreseeable future. 

House shows, formerly the lifeblood of the wrestling business, wouldn't even be necessary.  If WWE gets what they want, they could decide to cease running non-televised shows to make the schedule easier.  I doubt it would happen, but they would absolutely be able to do it.

There could also be a huge domino effect outside of wrestling.  If WWE Network is a smash hit, UFC, Showtime, and HBO (the latter two being by far the biggest producers of boxing PPVs) would be able to undertake similar projects.  Even if it just led to price drops for online streams instead of a bigger service like WWE Network, pay-per-view television as we know it would be dead.

This is a very interesting time to be a WWE fan.

David Bixenspan is also lead writer of Figure Four Weekly. Some of his work can be seen in Fighting Spirit Magazine.

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