World Wrestling Entertainment Inc. (WWE) has decided to launch its own web channel. It will be the WWE Network, a by subscription only, online video channel which will air 24 hours a day. The wrestling fixture has been on traditional and cable TV for many years, but that is about to change with this new move to the Internet.
Beginning on Feb. 24, the WWE Network will start showing both new matches and also programs. It will be a service which will be offered only as on-demand and will cost $9.99 per month. For that, besides the above mentioned shows, there will also be 60 years of wrestling history that will be shown from wrestling vaults. The channel will also play major events which were only formerly available on pay-per-view television, like Survivor Series and the granddaddy of all PPV’s, WrestleMania.
WWE’s decided to go at this alone with a direct to the consumer channel, does come with controversy within the TV industry over how to please the specific consumers who have disconnected their paying-for-TV subscription, and also toward younger individuals who have never paid for television. With the explosion of online video subscriptions, such as those from Netflix, people that are actually deciding to sign up for subscription-TV has basically stopped growing all together.
Paying-for-TV operators have attempted to try to make it seem to programmers that it is not good to do direct-to-consumer submissions, because these channels end up weakening operator deal rights. While the majority of giant television networks have digital channels, they have usually only offered them through the networks’ paying-for–TV associates, like cable companies. However a few companies have begun dropping hints that they just might start offering stand-alone Web selections. If this is a marketing ploy or truth, it is unknown.
But WWE CEO and Chairman Vince McMahon stated they are not constrained by anyone telling them what they can and cannot do. But he added that he did not want anyone to get him wrong. They do not want to cut any previous ties they have made. That would not be to their advantage.
The WWE had no plans to leave behind traditional TV. The company anticipates that its live mainstay TV shows Raw and Smackdown will stay on pay TV. Each hit show is carried on cable channels which are owned by NBCUniversal. But the agreements between the companies are expiring this year. WWE has begun exclusive negotiations with the Comcast Corp. just this month and will open up the bidding to other interested networks in February if a new deal with NBCU is not reached.
Mr. McMahon declared that he expects the online WWE Network would be marginal to the discussions and that he would drive a hard bargain to improve the WWE’s terms. The company is pulling in at least in $140 million a year from all of its global deals and he deserves to have the best deal he can make.
NBCU needs to keep WWE programs. Raw, which is shown on the company’s USA Network on Monday nights, is a constant weekly hit, and had an average audience of at least 4 million viewers every episode last year. This was according to the Nielsen ratings. Raw helped make the USA Network to the No. 1 position among all cable networks.
Mr. McMahon explained that the new WWE Network would help in promoting the cable shows.
From the WWE’s standpoint, by going direct to consumers will be more costly for the company than other business representations but its upside will be not having to share any revenue with partners will make it worth it in the long run.
The WWE Network’s combination of programming will bear a resemblance to traditional cable channels. It will contain four to five hours of new programs a week. It will also have 10 to 15 hours of various other types of wrestling content which is new to the network. That programming may be replayed over and over as much as eight times in one day. The other hours will be filled with shows that come from the WWE’s libraries.
The WWE channel will break even when it has gotten one million subscribers. That is expected by the end of 2014. It is realistic to expect that the network will entice between two million and four million subscribers.
However this does not include plans for expansion. The WWE Network will quickly spread to different countries, added Mr. McMahon.
World Wrestling Entertainment Inc. (WWE) has decided to launch its own channel, and it should do really well.
By Kimberly Ruble