WWE Looks To PPV For Network ROI
You’re a diehard WWE fan and allegedly an adult. But you walk out of the house with a replica title belt and collect action figures after your kids have outgrown them. And you pay something like $660 a year for pay-per-view (PPV) events because all the wrestling on USA, Syfy and Ion isn’t enough.
What's the cure? Who knows?
But the WWE is prepping a deal for you – a chance to save more than 70% off your PPV investment. On one level, the wrestle-tainer is looking to meld its PPV business with its coming network.
Plans call for the 24/7 channel to be offered on a premium basis, costing between $12.99 and $14.99 a month -- up to $180 a year.
But, the network will carry all the WWE’s yearly PPV events (except “WrestleMania”). Cost for those 11 would be between $495 and $605.
So, consider that it will cost less to get the network than buy just four PPV events each year (on the high end). The WWE is counting on the PPV content to help drive network subscriptions.
“It’s really reimagining what the pay-per-view business is and we how to monetize that asset,” said WWE CFO George Barrios.
The WWE anticipates the network will attract somewhere between 1 million and 4 million subscribers. (Despite some talk, it opted against pursuing traditional cable distribution.)
The challenge, though, will be attracting an audience beyond fans who walk out of the shower bellowing a Ric Flair “Wooooooooo!” each morning. To get to 4 million, it will have to move beyond the devotees and into the more casual pool.
“That’s what will make the network,” Barrios said.
The WWE figures it has a base of at least 27 million homes to draw from. Of 92 million homes, it estimates 9% have at least one “hardcore” fan and another 20% a casual one. Homes with lapsed fans increase the potential base considerably.
The WWE offers up potential incremental revenue estimates of between $125 million and $250 million per year and incremental EBITDA between $50 million and $150 million. Between 3 and 4 million subscribers could bring “transformative growth” to the company.
The financials depend on factors such as the price point; how many operators agree to offer the network available; the revenue split with them; and the number of free or discounted subscriptions handed out to attract new customers or bring back old ones.
The WWE hasn’t released a launch date, but already has three shows in development, one a reality series. It plans to offer pre- and post-shows for “Raw,” which airs Mondays on USA. And the PPV events offer a chance for all kinds of shoulder (hype) programming in the days – probably weeks -- before. (As a premium network, there won’t be any advertising.)
The WWE has never had trouble producing more content. If all else fails, it has a library of 100,000 hours to fill the time between the PPV events.
Grapple with that. Enough for 11 years with no repeats.