WWE has officially gone ahead with the much-talked about WWE Network and will finally launch the network February 24th, just in time for Wrestlemania season. The network is no longer a mystery, a series of grainy ads on Raw with no release date given, but it's coming, and WWE is hoping that it is going to be huge.
My understanding is that the network is going to be less of a network and more of a live streaming service. Essentially, it is Netflix, but minus the mail-order discs and exclusive to wrestling. This is a truly savvy move by WWE. They will have all their desired programming and original shows, but will not have to deal with any of the headaches that come with running an actual television network full-time. It is tremendously user-friendly and will allow subscribers to watch what they want, whenever they want.
The network is going to be priced similar to Netflix, at $9.99 per month, with a six month commitment. The big selling point will be that for that subscription fee, fans will be getting all 12 WWE PPVs, including Wrestlemania. If you are a big WWE fan and you purchase every WWE PPV for $60, you are now getting the opportunity to pay 1/6th of that price each month, in addition to getting a crapload of additional programming including all the past PPVs from not only WWE, but ECW and WCW as well. For the fan, that is an insane deal, and every WWE fan should be jumping for joy right now.
The big question mark is that they are now offering their PPVs for basically $9.99 each, plus a ton of other shows and on-demand content. As a fan that sounds like a great deal, but from a business perspective, I don't know how they are going to make money off of this. They will need SO many people to sign-up for this. Let's do some quick math:
Wrestlemania alone costs $60. If a million people purchased WM, they would make $60 million. Now some of that money will go to In-Demand or whatever, but they are still making a ton of cash. To make that money back, they would need 6 million people, about 4 million more than watch Raw, to have a subscription for April. They might get a larger audience then that 4 million because of overseas markets, (the network will not launch outside of the US until late 2014) but WWE is basically banking on every single person that watches WWE frequently to buy this thing, and I don't think that could possibly happen.
The big catch is the six month commitment. This ensures that fans can't just purchase Wrestlemania and then cancel their subscription. No, WWE will get all those freeloaders by making them pay for 5 additional PPVs, which will eventually equate to them paying $60 for Wrestlemania.
The subscription is going to kill WWE when it comes to their B-PPVs. There is a core group of WWE fans, most likely groups of friends who all chip in, who buy every single one of WWE's PPVs. Then you take a show like Battleground, a miserable show with little build-up and not a lot of marquee matches. The people who buy every single WWE PPV are basically the only people who buy shows like Battleground, and since they will now all have the WWE Network, no one will be left to buy the PPV for $60, and now WWE would need to have six times as many people who bought Battleground to have the subscription for WWE Network, again, a difficult mark that I find difficult to reach.
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