1/14/14: A Dialogue on the WWE Network

We have had some time to ruminate on the WWE Network, so Scott Strandberg and I exchanged a series of emails on the subject. We covered the business model, what the Network will mean for WWE programming, some of the most appealing features, and what we hope to see from WWE Network in the future. We hope you enjoy the discussion, and feel free to chime in with your own comments below.

Andrew Berg- It has been roughly a week since WWE formally announced its plans for the WWE Network. For the uninitiated, the WWE Network will be a sort of hybrid between a traditional cable network with 24-hour shows and a web app full of on-demand content. Think of it like HBO and HBO Go combined into one program that you can access through a smart TV, AppleTV, Roku, Playstation, or XBox. Raw and Smackdown will remain on cable TV (at least for now), but the rest of WWE’s programming will originate on the WWE App, including NXT and Main Event. The content will include new documentaries, reality shows, all of WWE’s PPVs, and loads of old content (including every WWE, WCW, and ECW PPV on demand). For $10 per month, every wrestling fan I have talked to is thrilled about the WWE App and many marginal fans have told me that they will probably subscribe, even if only to watch the old PPVs and Attitude Era content. For me, the most exciting aspect is the old WCW PPV library. If the list of events goes back to the earliest Starcades and Clashes of the Champions, it will be very fun. It is no secret that the quality of wrestling in the latter days of the NWA/early days of WCW was a step ahead of the WWF contemporaries in talent and in style. I can’t wait to see Ric Flair, Ricky Steamboat, Terry Funk, Rick Rude, and the rest in their prime.

Scott, what stands out to you as the most personally exciting feature of the WWE Network, and more broadly, what do you think the Network will mean for WWE’s business model in the future?

Everyone wants to relive Flair-Funk.

Scott Strandberg- This is fascinating to me on so many levels. I’ll start out with the bigger picture and narrow it down from there as we continue our discussion. First off, seeing as I have a background in media studies, my first reaction is that this could be the beginning of a revolution that I thought was still 5-10 years away. I’ve heard some variant of the following complaint countless times over the years: “Why can’t I just pick my channels a la carte? I don’t watch Lifetime!” My response has always been the same; the reason many smaller niche channels exist is because they’re partially subsidized by the large fees you’re paying for channels like ESPN on your cable bill. If you could just pick and choose your channels, many niche channels would die out completely.

However, that argument is based on the traditional cable/satellite TV model that we’ve become accustomed to over the last few decades. With the emergence of devices like the ones you mentioned (Roku, AppleTV, etc.), many people have been dropping cable/satellite in favor of some combination of those devices and an antenna. This has already been a huge thorn in the side of subscription television providers, and it’s about to get much, much worse. WWE, admittedly, offers what is very much a niche product, but one with intensely loyal fan support from its audience. Regardless of price points, specifics on content, etc., this is a fanbase that will follow WWE wherever it goes. Furthermore, there will be plenty of wrestling fans who won’t see the need to spend $100 a month on cable anymore, when they can just wait until 11pm and watch Raw in its entirety, nearly commercial-free.

Let’s say, for argument’s sake, that the WWE Network is an overwhelming success (which I think it will be). What does that mean for the landscape of media consumption on the whole? Well, look at Major League Baseball, the very same company who helped WWE design and program the network. What if they look at WWE’s success in the digital marketplace and follow suit? All they’d have to do is pull the MLB Network off the air, let their current TV deals expire, with the exception of the playoffs and a few national “games of the week” on television, and repackage it all as an online MLB Network. While MLB.tv is arguably not that different from this concept already, the point here is that MLB would now have full control over every aspect of their product and how it is consumed. Add in on-demand content like WWE is doing, say, every televised playoff game ever, and you’ve got thousands upon thousands of baseball fans cutting the cord and ditching cable/satellite.

What if HBO did the same? Much like MLB, HBO already has an app towatch their content, but you have to subscribe to a cable or satellite package to even have access to purchase the channel at an additional cost. THEN, you get the HBO Go app. What’s stopping HBO from pulling the plug on their TV deals and moving everything over to HBO Go? What if Showtime followed suit? I believe we’ve just taken the first major step on a slippery slope that leads to the eventual death of the traditional subscription TV model as we know it. Say what you will about Vince McMahon, but he’s one of the truly revolutionary businessmen of a generation, and this may end up being his biggest impact on society yet.

It’s all about the monay.

AB- You bring up some very interesting points, and I think you are right that WWE Network is one of the first shots in the battle against the traditional cable/satellite model. Obviously, Netflix, Hulu, and other services have already started to chip away at the cable monopoly on programming, but the consistent bugaboo has been the sort of live event that has to be consumed nearly immediately to stay current with the water cooler conversation (not to mention Twitter). This type of programming has become more and more rare as the TV audience has become more segmented. Big sporting events, awards shows, and appointment viewing shows like Breaking Bad were the big ones and wrestling joined niche shows like Top Chef in the realm of spoil-able TV. Like you said, if Raw becomes available as soon as it goes off the air, which makes it much more accessible without the risk of spoilers.

Of course, WWE is not about to abandon cable altogether. WWE Network will be a companion to its live shows on cable for now. Raw and Smackdown are on the verge of lucrative new TV deals precisely because they are the types of shows that are more DVR-proof than the average sitcom. Since Twitter conversation, the WWE App, and the risk of spoilers provide an incentive to watch the show live, it makes it much harder to skip over commercials, which in turn makes the show more attractive to advertisers. If advertisers will pay the network more money to run their commercials during a show when viewers actually have to watch them, the networks will naturally pay WWE more to broadcast their content. WWE has always been a great model for cable TV because it comes up with 52 first-run episodes per year when even the most ambitious cable shows aim for the mid-20s each year. The money from cable TV is not going anywhere, but the WWE Network is a way for the company to corner the market on the rest of its revenue. Instead of selling some documentaries to Netflix, some PPVs to cable providers, some archival footage to video distributors, and some reality shows to other networks, it can cut out the middle man and profit on its own.

The result is that WWE Network appears, on its face, to be a great deal for those of us who will actually use it. At $10 per month (even with a six-month subscription required to start), the yearly cost is equal to the price for two PPVs. Even the cost-conscious among us who find ways to watch some of the PPVs that do not cost full price already spend well over $120 per year to watch PPVs, so the rest of the programming is icing on the cake. I assume that the financial model revolves around subscription volume more than a huge margin on the individual subscriptions. Do you have any more insight on how WWE will make money off of the Network?

Never pay full price again for crappy PPVs.

SS- Oh, absolutely, I didn’t mean to imply that WWE is leaving cable altogether; it’s just that the Network makes it far easier for fans to take the leap to cutting out cable/satellite. Much like if Major League Baseball did something like I outlined previously, they would still have a few games a week on TV, just like WWE will still have Raw and SmackDown live on TV, but few enough that many consumers would be tempted to cut the cord.

To talk more specifically about the Network itself, I think WWE is going to laugh all the way to the bank on this one. Wrestling is perhaps the only business model out there today that thrives despite the fact that it gets exactly zero dollars per year from a large portion of its most hardcore fans. Not to make a broad generalization, but I think we all know that there’s a huge portion of the IWC that streams every PPV, and even Raw and Smackdown, on illegal and overseas sites. Basically, the first thing that comes to mind for me from a financial standpoint is that Vince has somehow figured out a way to get even the smarkiest of smarks to pay him $10 to watch Extreme Rules. You and I are both lucky to have at least a couple friends who like wrestling who are willing to split the cost of PPVs with us, making it reasonably affordable. To be perfectly honest, I am sure as hell not shelling out the $660 per year that I would need to pay to order every PPV if I didn’t have people to split the cost with, especially for C-level PPVs like Battleground. Now, that is a non-factor for all but the very most financially challenged fan.

Continuing from that line of thought, David Shoemaker pointed out in his most recent podcast that WWE has always reached its popularity zenith when accompanied by a leap forward in technology. I believe that will be the case here as well. I could not possibly count the number of people that I didn’t even know liked wrestling at all who have approached me since the Network announcement, talking about how excited they are to re-live the Attitude Era, etc. Here’s the thing: While re-living the Attitude Era, for example, will bring in a bunch of subscriptions from people who don’t watch the current product, you’d better believe that the vast majority of those people will end up watching the current product as well, since they will have full access to every aspect of it.

For all intents and purposes, I think that the most important result from the Network launch will be how many lapsed fans will be returning to a product they haven’t consumed in years. That, combined with the $120 per year the company will be getting from thousands of smarky streamers, is why I think the WWE Network will be a major step forward for the company on the whole. I’d like to hear your thoughts on this, and then why don’t we get into what we’re really excited about content-wise?

“Relive the Attitude Era” is not a bad selling point.

AB- I don’t know if I think a huge percentage of the casual fans who dabble in WWE Network for the first subscription will become big fans of the current product or even renew their subscriptions, but even a small number of converts has to be a huge benefit for the business. As a year-round enterprise with constantly evolving stories, it takes some effort to jump into wrestling, and it’s not particularly easy to follow it without semi-regular attention.

The launch of the Network provides a built-in reason to come back to wrestling, and it happens to coincide with a boom in the product, as well. It seems like wrestling has a fairly steady stream of young fans with a relatively stable rate of those who remain fans as adults, so the ability to convert adults into fans is icing on the cake. I am the first to admit that WWE had some lean years in the late 00s with stars who passed away too early (Chris Benoit, Eddie Guerrero), left wrestling (Brock Lesnar, The Rock, Steve Austin), or left WWE (Kurt Angle, Jeff Hardy). WWE has rebounded in a big way and features a great blend of charismatic stars on the main event level and upcoming stars to join them in exciting programs. It might be unrealistic to think that the execution will be as effective as it was during the Attitude Era, but the combination of technological innovation and outstanding talent is certainly in place.

Far and away, my most desired content on the Network will be the old PPVs that are archived and available on-demand. I already have every Wrestlemania, Royal Rumble, and SummerSlam archived on my computer and I frequently rewatch them in rough chronological order to relive the storylines (I just rewatched SummerSlam 1992 over the last couple of weeks and relived the great Bret Hart-British Bulldog main event). To have the full catalogue at my fingertips is a dream come true. When I watch old wrestling, I find that it enhances my experience of the modern product, as well, because it puts it in a broader context and reminds me of how all of these stories have been told before and we are really watching to experience the variations in execution. Starcade started before I was born and I caught on to ECW very late in the game, so my first step will be to revisit some of those eras. Do you know where you will start with the on-demand content, or are you more excited for the streaming shows that WWE will produce?

An easier way to catch up on ECW PPVs.

SS- I’ll tell you exactly where I’m likely to start with the on-demand content, and that’s staring slack-jawed at the menu screen for six solid hours as my indecision brings my brain to the point of pure chaos. It takes me a good thirty minutes sometimes to even decide what I want to watch on Netflix, so in that manner the WWE Network will be my own personal hell. That said, I’ll probably start where I left off. I stopped watching wrestling almost entirely from the mid-2000s until about a year ago, when you randomly talked me into watching Raw one night and I became more hooked than I ever was to start with. So I’ll probably watch all of those PPVs to get myself re-familiarized with what happened while I was away from the product.

After that, I think it’s totally ECW time for me too. Like you, I caught on to ECW quite late, and that’s something I really want to watch without having to search through torrents or YouTube videos with crap quality. Then, I need to get better-acquainted with WCW. At the time, I was a WWF guy all the way; I barely ever watched WCW in my youth because of my allegiance to WWE. I’d also like to familiarize myself with what happened in wrestling before I started watching. Tear through all the late-70s, early-80s material they have. There’s just so much I want to watch, it’s absolutely staggering. I haven’t even mentioned re-watching anything I’ve seen before!

As for the live-streaming content, I love the fact that there will be heightened exposure for NXT. I think a lot of people will latch onto NXT when they realize what an incredibly fun hour of television it is, and how much wonderful talent WWE has waiting in the wings. I look forward to NXT almost as much as I look forward to Raw every week, and it’s absolutely surpassed Smackdown for me. As for the other new shows, the only one I can claim to be excited for is “Legends House.” Sure, it’s cheesy as hell, but who doesn’t love the idea of a bunch of retired wrestlers bumming around a house together?

I think the Raw and Smackdown pre- and post-shows have some promise, but only if used in the right way. Take the Raw and Smackdown reactions videos from WWE.com, expand on them in a studio-show format; yeah, that could be cool. Also a good way to actually utilize the incredible amount of announcing talent WWE has at its disposal. I expect to see Tom Phillips and Renee Young play a big part in these shows, and that cannot be a bad thing.

One last tidbit from me on this is a bit of Network fantasy-booking. A feature I’d really like to see included is a Superstar-specific search function. Let’s say I want to watch some Edge matches; I search for Edge and I get a list of all his matches available on the Network, preferably in chronological order. How freaking cool would that be? Finally, it is so awesome that we’re getting every single PPV, live in HD, for $120 a year. I’m sold on that alone; all the rest of this is just gravy for me, and it is a whole lot of gravy, my friend.

I think we all hope Legends House includes Iron Sheik reading his own Twitter timeline.

AB- I completely agree with your assessment that the product is worth $120 to see every PPV live and in HD. Of course, because I am a cynic and a pessimist, I can find fault with just about anything if I look hard enough. With WWE Network, I have to wonder about availability and server space. Sure, all of the old PPVs will be available on 2/24/14, but will they continue to be available for all time after that? If they cycle through the available PPVs, that will significantly take away from the on-demand joy and our collective slack-jawedness.

Similarly, I heard rumors before the official WWE announcement that the Network would include every episode of Raw that has ever been broadcast, but that turned out to be just a rumor. Are we going to get the old Raws once they have been able to reformat them for streaming online, or is that dream off the table? I devoured the “Best of Raw Seasons 1 and 2” DVDs when they came out because it gave me such a fun look into a previous era. If we had every episode of Raw and all of the Nitros to go with it, I would be even more excited. Every wrestling fan would want to relive those old Nitro first hours in which Tony Schiavone ignored some of the best cruiserweight wrestling of all time in the ring.

I really like your idea of a wrestler-specific search function. I would take it a step beyond- we should be able to rate individual matches so when I search for Edge, I can sort the results by the matches with the highest user review ratings. Of course, we would always be suspicious of WWE juicing the ratings to favor old matches against currently pushed wrestlers and devalue those against wrestlers who abandoned WWE on bad terms. Even so, if there was some moderately reliable match rating system, it would be a great way to sort out old matches. We are getting down to some pretty specific nits to pick here, so I will wrap up our discussion and leave it to any readers who have additional comments or questions on the WWE Network.

Follow Scott and I on Twitter: @scottstrandberg and @aberg7