Another week, another crisis in wrestling. Last week was TNA’s turn in the spotlight, thanks to reports that Spike TV are not renewing their contract when it expires in October. This week it’s time for WWE to take a very public ass kicking.
The source of WWE’s woes was their recent investor conference call. The announcement that the current number of subscribers to the WWE Network is hovering at around the 700,000 mark, had the brown stuff hitting the spinning blades.
While WWE and others have tried to put a positive spin on that number, the fact remains that the current number of US based subscribers to the WWE Network is a huge disappointment.
The likelihood of WWE’s own projection of one million subscribers in the US being reached by the end of the year is looking increasingly unlikely. They’d have to add tens of thousands of new subscribers, every month, between now and 31st December. Unless they have some major surprises up their sleeve, it doesn’t appear they’re going to come close to hitting that number.
I always felt WWE were taking a risk with the number of subscribers they projected pre-Network launch. It felt like WWE were working the numbers; like an old carny overinflating the gate. As a wrestling promoter, you can tell everyone that 93,173 fans were at WrestleMania 3 (the real number is closer to 78,000) without any real consequence. But overinflating business related projections, when you’re a publically traded company and answerable to shareholders, is a very dangerous game to play.
On the face of it, the reasoning behind the projected numbers seemed sound. A subscriber can get all the former PPV events, plus all the other historic and original content for just $9.99 per month. Given that WWE RAW draws over four million viewers each week in the US, converting a quarter of those viewers to Network subscribers should have been easy.
That was all well and good until you consider that, out of those four million viewers, WWE have only been able to convince somewhere between 90,000 and 200,000 (depending on the strength of the card) of them to purchase the monthly ‘B Level’ PPVs – which make up 8 out of the 12 PPVs of the year and are the main selling point of the WWE Network.
NASDAQ.com recently had a great article on this very subject, which was devoid of the WWE spin that reporting on this subject is usually buried under. As they report, the numbers do not lie:
“In April, just 42 days after launching, the WWE Network had 667,287 subscribers. In reality, however, the total was disappointing — the period covered included the largest PPV event of the year, Wrestlemania.
Ordering Wrestlemania alone on traditional PPV costs roughly the same as a six-month subscription to WWE Network. The pricing should have made the hundreds of thousands of casual fans who buy only Wrestlemania sign up for the network. Instead, nearly 400,000 customers ordered Wrestlemania through their cable providers. That would be OK for WWE if those customers kept buying PPVs in the old way, but that has not been the case.
The company last week did not break down PPV sales between the U.S., where the network is available, and the rest of the world, where it isn’t. But it did provide worldwide totals. Globally, WrestleMania did 690,000 buys, Extreme Rules did 108,000, Payback did 67,000, and Money in the Bank did 122,000. Those are huge drops from 2013, when WrestleMania did 1.1 million buys, Extreme Rules did 245,000, Payback did 198,000, and Money in the Bank did 223,000.
Those drops would be fine if the network was making up the difference, but it’s not. During the same July 31 call, the company said it had 700,000 subscribers at the end of June. That’s an increase of only 33,000 subscribers since April. While the original 667,000 subscribers more than made up for the revenue drop due to losing 410,000 Mania buys, the added 33,000 customers does not begin to cover the revenue drop from losing roughly 370,000 buys on the next three PPVs.
Network subscriptions are supposed to be for a six-month minimum. That was enacted to stop people from singing up for a month to watch a certain PPV, then canceling. But people have found a way around that. Between April 7 and June 30, the network added 161,000 subscribers, but had 128,000 cancellations.
That should theoretically have been impossible, but customers found creative ways to skirt the rules, like stopping PayPal payments or canceling their credit cards. If people are willing to go to that length to get out of their commitment, what will happen in September when it comes time for people to renew?
With no major drawing card like Wrestlemania to keep casual fans interested, cancellations could lead to lower subscriber numbers come Jan. 1. That would be extremely bad news, as WWE has admitted there is no going back. During the call, the company said it expects the PPV business go to away in 2015. That means the network has to either make up the roughly $90 million the company made on PPV, or WWE has to make major changes to its operating model.”
As soon as these numbers were released WWE went into ‘slash the workforce/budget’ mode. When you look at the figures released and compare them to what WWE projected, it’s safe to say the launch of the WWE Network has been anything but a success, especially financially.
So, the questions are: what can WWE do to improve the WWE Network? How can they secure more subscribers? And most importantly, how do they keep hold of those subscribers who are dropping off at an alarming rate?
Thankfully I’m here with some blatantly obvious suggestions and ill-informed opinion to answer those questions. You’re welcome Vince:
- Refocus your marketing and advertising campaigns.
A lot of WWE fans still think the WWE Network is a TV channel that can be added to their current cable subscription. Considering it was launched in February and we’re now in August, this is something WWE need to address as a matter of urgency.
Smart ass slogans such as, “like Netflix for WWE, only better” are a start but WWE need to worry less about having a pop at Netflix (who are the market leader in this field and who WWE should be learning from) and worry more about getting their own house in order. They need to do everything in their power to explain to people – in easy to understand language – exactly what the WWE Network is and how viewers can access it.
Also, the phrase, ‘over the top platform’ means nothing to anyone, apart from a small handful of nerds in the TV/internet industries. Stop using it, it only confuses potential subscribers.
The days of hard-selling the Network during RAW, using the likes of Michael Cole, JBL and Jerry Lawler need to end. Viewers know that Cole, JBL and Lawler have no idea what they’re talking about, especially Lawler. Every time he uses the WWE app or the Network on Raw, I expect him to accidently sign up for UFC Fight Pass or launch a nuclear strike on China.
Having three old men muddle their way through using the Network every week on live TV is frankly embarrassing and probably does more harm than good. They should recruit the people who work on commercials for Apple products, or other memorable technologies based advertising campaigns, and get them working on explaining the WWE Network to the wider world in a cool and modern way.
Get young people, who look like they know what they’re doing, to explain and advertise the Network. Stop making it seem like something that confuses men in their 60s. Instead, make it seem like something cool, that all 16 years olds must have.
WWE are usually fantastic at marketing and branding (look at all the money they make from merch), but when it comes to the advertising and marketing the WWE Network, they seem to be working off an advertising model from the late 1980s.
The non-stop infomercial, ‘let’s smash ‘em repeatedly over the head’ style of selling just doesn’t click anymore. You need to be smarter, more subversive and more entertaining. The WWE Network is all about modern technology and new viewing habits, so get some viral advertising that focuses on that.
- Upload new content, more regularly.
What WWE said the Network content would be pre-launch, and what it is today, are two very different things. I don’t know what’s happened to WWE’s strategy of uploading new content on a regular basis, but they’ve seem to have completely forgotten it.
Content wise it’s not bad. There’s plenty to watch. All the PPVs from WWE, WCW and ECW are on there; although it took them a month to get that content onto Xbox Live (the search function on Xbox Live STILL doesn’t work).
They’ve got all the Clash of the Champions shows, a good number of the Saturday Night’s Main Event shows, ECW TV shows, WCCW TV shows and some classic WWE shows from Madison Square Garden and other big house shows from days gone past. Which is all well and good and there’s some great stuff to watch on there.
The problem is, they’ve got thousands of hours of footage, from all the major promotions in wrestling history, yet hardly any of it is on there yet. When it does get uploaded it can be weeks, or months until a new episode goes up. ECW TV is the perfect example of this. The show with Eddie Guerrero vs. Dean Malenko in a classic TV Title match is great, but it was on there for more than two months without a new show being added.
Their idea of holding off on adding all the RAW and Nitro episodes to coincide with the launch of the Monday Night Wars show was totally misguided. Those shows are EXACTLY what hardcore fans and the lapsed WCW fans would want to watch. Holding them off for months on end makes no sense.
It’s not about drawing viewers to certain shows on the Network, there’s no need to hold off on those shows being uploaded. If fans subscribed to watch Nitro and then found out they couldn’t get it for another six months, they may have cancelled their subscription. That’s crazy. It doesn’t matter what they sign up to watch, just as long as they sign up.
Again, it’s like WWE are working from a programming model that’s built for drawing TV ratings and not getting the most subscribers, as quickly as they can.
The lack of new content going up regularly is definitely why some subscribers cancelled. I’ve watched most of the content on there now and I’m crying out for them to start adding more shows from their vast library.
- Link gaming and Social Media to the Network.
This was an idea suggested on MFX99 by Andrew Carson. He’s the creator of the forthcoming British based wrestling movie, RhumbleRama. You can hear our interview with Andrew over at www.mfxpodcast.com and it is well worth a listen, if I do say so myself.
Andrew’s point was a simple one: link the online play of WWE2K15 etc to the WWE Network. It’s a pretty straightforward concept. You buy the game and you get one month free access to the Network which allows you to play online. Subscribe to the Network and you get the game at a discount, with some other bonuses included. If the game is good enough and the extra content is worthwhile, you could justify the six month subscription.
Once you’re signed up to the Network and are playing the game, you can unlock content, share your high scores, achievements and videos with other players and WWE Network subscribers. Maybe you could run tournaments in the game, with prizes on offer. I don’t know enough about online gaming to say if this would work or not, but on the surface it seems like something worth at least looking into.
Away from gaming, where’s all the social media links on the WWE Network? Maybe you get them on your PC, but on Xbox there’s nothing. Surely liking videos on Facebook, sharing them via Twitter, commenting on content on the Network, rating matches etc, is the perfect way to get others to subscribe? WWE like to be at the forefront of social media but they don’t appear to have carried that over into the WWE Network and using social media to drive subscribers to it.
- Change the model of special events (formerly PPVs).
If WWE do phase PPV out completely in 2015, then they’re going to have to look at altering their business model when it comes to major events. The days of being able to put on a throwaway show 8 out of the 12 months of the year are over.
The same is true of running with the same talent in top positions. If you’re looking to attract new subscribers and keep old ones, you need to offer them matches they haven’t already seen time and time again.
WWE don’t need to run a special event every month, especially if those events are anything but special. Sure you can get a half assed show, plus all the Network content for $9.99 per month, but who actually wants to watch a half assed show? When the whole point of the monthly show is to attract people who AREN’T subscribers, you need to offer them more than just an episode of RAW without the commercials – which is exactly what Battleground was.
They may have to change tact and run a big event every quarter, or whenever the subscription renewals come around. That would mean a change to the long established tradition of ‘The Big Four’ which is actually now ‘The Big Three’ as Survivor Series doesn’t draw anywhere near the numbers of the Royal Rumble, Summerslam and Wrestlemania.
One thing the launch of the WWE Network has guaranteed is that everything WWE have done up until this point has to change. The PPV business is gone. The TV show is no longer about driving house show business or PPV business, it’s now about getting Network subscriptions.
With that in mind, you need to attract people to sign up and the only way you do that is by offering events that people who aren’t hardcore fans, are willing to pay for. Right now WWE have got most of the hardcore fans to subscribe, but the casual ones (like those 400,000 who bought WrestleMania 30 on traditional PPV) need something to convince them they HAVE to subscribe to the Network and keep that subscription going.
- More Original Content.
As everyone in wrestling knows (apart from Dixie Carter), you can only draw from nostalgia acts for so long. In wrestling, just like every other form of entertainment, business is driven by youth. That’s true from both the consumer and the performer side.
These days, young people have incredible power to make or break a brand or product. If something isn’t delivering and a better, alternative product comes along, young people will ditch the old and go with the new. They’ll do it quickly and they won’t come back. Just ask My Space if you don’t believe me.
From the performer point of view it’s just as true. People are looking for new stars and new names to support. Sure, there’s room for nostalgia, but if you’re going to draw a new generation of fans, you need new stars and you need fresh ways to get that star over to the new audience.
The WWE Network sucks when it comes to original content. It really does. So far, in terms of never before seen content, we’ve had Legend’s House (filmed 2 years ago and a nostalgia show) and two documentaries – one about Daniel Bryan’s road to WrestleMania 30 and the other about The Ultimate Warrior. Both of which were excellent and just the kind of profiles WWE should do on their current and future stars.
Sure, the WWE Countdown and Wrestlemania Rewind shows could be classed as original content – but in reality they’re just talking head shows, going back over things from the past. These shows are the cheapest form of ‘original content’ there is and the number one go to format for lazy programme makers.
If the WWE Network is going to attract new fans and subscribers, they need to get as much original content on there as they can and quickly. They could do so much more, especially when it comes to putting other promotions on the WWE Network (something UFC have already done with the INVICTA promotion on their Fight Pass Network).
Imagine how great it would be if WWE partnered with NJPW and put their shows on the Network with English commentary (or not). They could attract the NJPW audience in the US (which admittedly is small) to the Network. Who cares if they only watch NJPW? As long as they pay $9.99 a month for it, WWE should be happy.
The same could be true of indy promotions without TV deals. They could pay a fee to have their shows broadcast on the Network and perhaps indy fans would stump up $9.99 per month if they knew they’d get PWG or DGUSA shows included. WWE could even go further and put on promotions in each region the Network is available. UK fans could get access to shows from UK promotions and so on.
It just defies belief that WWE would launch a Network with such little original programming on it. There’s nothing new, cutting edge or must see about any of the original content on the Network and that needs to change if WWE want to start attracting new subscribers.
I think it’s over stretching reality to say WWE are in serious trouble because of the WWE Network. It’s not been smooth sailing since the launch. They certainly face a lot of challenges in the next year or two, but in terms of the imminent financial meltdown of the company, we’re decades away from that at the moment. However that doesn’t mean these subscriber numbers are something WWE should ignore, to try to put a positive spin on. They’ve got a lot of work to do.
The launch of the WWE Network has been extremely haphazard and disappointing. It feels like WWE jumped the gun completely and didn’t have the infrastructure, business models or content in place for such a big project. Given how long they’ve been working on this, these failures are serious and no doubt heads have rolled as a result.
While there’s a lot of good on the WWE Network for the hardcore fans, for the casual or lapsed fan (who are the critical subscribers WWE need) there’s not a lot to interest them or keep them signed up. The next few years are going to be critical to the success of the WWE Network, the company and wrestling the United States as a whole.
That’ll do for this week’s crisis in wrestling. Let’s hope there are a few more positive things to talk about next week. Remember, you can follow me on Twitter @MFXDuckman or you can enjoy a Duckman audio experience on the MFX Podcast where I’m joined by the one and only Sir Ian Trumps.
Come and join the rest of the MFX Galaxy as we rip WWE and TNA a new one, in a highly satirical and amusing fashion (or so we think). You can find the show on the MFX page here, or over at www.mfxpodcast.com and this week we’re celebrating MFX100 – so you better listen!
As always, thanks for reading and keep supporting all the people here at SLTD that make this site so great.
Until next time…
Peace
Duckman
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