One of the big questions going into WrestleMania 30 was just how much WWE Network launching in the United States would impact traditional pay-per-view business.
Obviously, there would be a drop, but just how much? The cannibalization of the existing PPV revenue stream is a big part of why the break-even point on the Network is somewhat high at about 1 million subscribers.
Last week, the morning after WrestleMania, WWE announced that they had 667,287 subscribers, not much more than the 662,000 fans in the U.S. and Canada who ordered WrestleMania 29 last year. Since the WWE Network number doesn't include Canada, it's not a direct comparison, but it led to some questions about whether or not it was its ceiling.
Those questions were at least partially answered yesterday when WWE issued a press release announcing that "nearly 400,000 domestic pay-per-view buying homes" purchased WrestleMania 30. With how the U.S./Canada figures are often classified as "domestic," I followed up with WWE for a clarification, and this figure is indeed just for U.S. homes so far, with the number of Canadian purchases not released yet.
Canada is also skewed by the availability of WWE shows in movie theaters across the country—tickets aren't counted as PPV buys. So again, it's not a 100 percent perfect apples-to-apples comparison yet, but it gives us a good idea of where we stand.
WrestleMania is an outlier, so it's not as much of an accurate predictor of how the rank-and-file shows would do as Extreme Rules will be. Still, it shows that more American fans were willing to pay for WrestleMania than there have ever been before, and it's very promising news for WWE.
The biggest questions are:
- How many of the nearly 400,000 PPV buyers can be converted into WWE Network subscribers?
- Is the overlap between fans willing to buy the traditional PPV shows and fans willing to buy WWE Network much smaller than we all thought?
- Why didn't more fans buy WWE Network?
The first question is tricky and leads into the second, which itself leads into the third question.
In January, WWE told the Associated Press that about 800,000 to 1 million homes buy two to three WWE PPV shows annually. The big takeaway was that, depending on how WrestleMania is factored in and if the PPV was ordered in HD, there were about a million homes willing to spend $135 to $180 annually on WWE.
WWE Network is $9.99/month with a six-month commitment. In theory, barring the occasional fan in a rural area without broadband internet access, there was no obvious barrier in place to getting those fans to spend about $120 annually on WWE Network and get a much better value.
In practice, it's not that easy. Between comments here, tweets, and a number of anecdotes, it's clear that a lot more WWE fans than you'd think don't understand how the service works. Some think it's a cable/satellite channel that their provider isn't carrying. Others, not realizing it can be watched on their TVs via a number of devices, think it's designed for laptops and mobile devices and thus didn't want to have to watch WrestleMania on their iPads.
If a significant number of fans (since we don't have U.S.-only numbers for past WrestleManias, let's just say two-thirds for now), were willing to buy WrestleMania last year and this year but not the Network, WWE may have more time for the Network to breathe. Even before the subscription numbers came in, I was expecting WrestleMania to come in at about 200,000 buys for the U.S. and Canada, and it looks like WWE more than doubled that.
This all leads me to believe that the idea that the Network subscriptions revealed the number of fans willing to buy WrestleMania was static regardless of price wasn't sound. On the contrary, a lot more bought it than last year.
The new questions this brings up, which can only be answered by WWE doing new market research, are where did the extra 400,000-plus (Canada being the "plus") fans come from? Are they weekly Raw and/or SmackDown viewers (the shows have less overlap than you'd expect)? Were they lapsed fans? Were they the semi-lapsed fans who only come back for WrestleMania season? Are they lapsed fans brought back into the fold by the archival content?
On top of that, if a similar percentage buys the traditional PPVs relative to last year on the rank-and-file shows like Extreme Rules, than the concerns about cannibalization of PPV revenue aren't nearly as serious as anticipated. WWE would have time that it didn't seem like it had before to convert fans over to the Network.
When we get the number of PPV buys for Extreme Rules and Payback, it's going to be VERY interesting.