WWE Business Class Day 2: Creating a New PPV Pricing Model

Welcome, students, to day two of WWE Business Class. My name is Dr. Chris Mueller and I will be your instructor. I am not really a doctor, but I play one in my head.

In this five-day course, I will take you through five lessons which can help to improve WWE in several different ways.

On day one we discussed how to properly schedule the WWE PPVs as well as why eliminating one from the lineup is a good idea.

Today's lesson will be on how to create a new pricing model for the WWE PPV schedule using the revised 12-event timeline I created in yesterday's lesson.

For those of you who missed yesterday's class, here is the PPV schedule I discussed:

• Royal Rumble - January 22
• Elimination Chamber - February 19
• WrestleMania - March 25
• Extreme Rules - April 22
• Over the Limit - May 20
• No Way Out - June 17
• Money in the Bank - July 15
• SummerSlam - August 19
• Night of Champions - September 16
• Bragging Rights - October 21
• Survivor Series - November 25
• TLC - December 30

Now, I will propose four pricing models which could allow WWE fans to purchase more PPVs, as well as make it so WWE gets more buys per show.

Even though the prices may vary depending on the event, country it is being viewed in and HD and SD pricing differences, we will say for the sake of this article that each PPV averages a $50 cost with the big four (Rumble, 'Mania, SummerSlam and Survivor Series) being $60.

If we use these prices, then we get a total of around $640 for a year's worth of PPV events.

Many fans spend less than that for their gym membership, electric bill, phone, television or Internet each year, so the cost is a little high for three hours of entertainment each month.

Here are three pricing models I feel would give fans the chance to see more events for a lower cost and WWE the ability to bring in more buys per show.

Price Structure 1 (The Mobile Phone Model)

The first pricing structure would be for the fan who wishes to purchase all 12 PPVs at once.

This would allow for the greatest saving for the viewer as well as make sure WWE has guaranteed buys for PPVs that are as far away as 12 months.

What WWE could do is price an entire year of PPVs at one flat rate of $450 for an up-front payment and $475 if the payments are made once a month for 12 months.

This would make it so each event had an average cost of $37.50 with the one-time payment option and $39.59/month for the people who take the payment plan option.

This would almost be like the contracts people sign for the mobile phones, with a prorated termination fee being applied if the customer chooses to cancel the service early.

For the sake of fairness, let's say that the cancellation cost would be $10 for each event that is left on the agreement. So if you cancel with five PPVs left then you have to pay a $50 termination fee.

This way WWE could ensure that they get some additional revenue to make up for the discounted price the customer had been receiving up until the point of cancellation.

Price Structure 2 (The Quarterly Model)

The second pricing structure would involve the year being split up into quarters, making it so customers purchase three events at a time.

Since some events are a bigger spectacle than others, we would have to price each quarter differently.

The first quarter would include Royal Rumble, Elimination Chamber and WrestleMania for the price of $150. This gives each event an average cost of $50.

Even though this is close to the average cost of an event already, it is a good deal because WrestleMania and Royal Rumble are two of the biggest events of the year and are traditionally more expensive that the other events.

The second quarter would include Extreme Rules, Over the Limit and No Way Out for the price of $120. This would give each event an average price of $40.

These are three of WWE's non-tent pole PPVs so they should be a little less expensive.

The third quarter would be Money in the Bank, SummerSlam and Night of Champions for the price of $140. This would give each event and average cost of $46.67.

Because SummerSlam is one of WWE's bigger events it would offset the cost of the other two.

The fourth and final quarter would be Bragging Rights, Survivor Series and TLC for the price of $140. This would give each event the average cost of $46.67.

Survivor Series is one of the big four events and would make the price the same as the third quarter because of that fact.

If someone were to buy all four quarters separately it would be a total cost of $550, making it a $90 savings over buying all 12 events separately, but still $100 more than the year-contract option.

Price Structure 3 (The Big 4 Model)

This pricing structure would allow fans to buy WWE's four tent pole shows each year at once for a discount.

By grouping together the big four events (Rumble, 'Mania, SummerSlam and Survivor Series), WWE can capitalize on a few events early in the year without making people sign the year-long deal.

Since the prices of these four events are typically over $50 a piece the price for all four could be set at $190. This would give each event an average cost of $47.50.

This allows WWE to give these four events at a better per-event price than they offer the smaller PPVs at.

By having fans pay for the four biggest events in one fell swoop, WWE could also see an increase in purchases for the smaller PPVs. Allow me to explain.

If someone knows they are not going to be shelling out over $50 in August for SummerSlam because it was paid for in January then they may be more likely to spend $50 on an event in July.

If someone were to buy all eight single events at $50 and the big-four package for $190 then that would still give them a savings of $50 over the cost of all 12 events separately.

Conclusion

These ideas have probably been brought up a million times in the past, but with the way technology has evolved in the past couple of decades we are more likely to see something like this in the future.

With the announcement that Microsoft is going to offer a discounted Xbox with a Gold Membership for a monthly fee, we are likely to start seeing a change in the way people pay for certain services.

Cable and satellite providers would obviously have to be involved for a plan like the one I proposed to work, but it very easily could be close to how things are in the near future.

By offering things in groups for a discount, WWE is giving viewers more options, which will in turn make them feel like they have more power.

Thanks for reading and please feel free to share your thoughts on this subject below. Check back for tomorrow's lesson: How to properly manage a big roster.