WWE jumps into Internet streaming
Published 12:00 am Sunday, April 6, 2014
- WWE via New York Times News ServiceJohn Cena, left, and the Rock take part in WrestleMania 29 last year in New York. World Wrestling Entertainment hosts its 30th WrestleMania event today in New Orleans, and shares of the WWE have more than tripled in the past year amid the introduction of an Internet subscription network and takeover rumors.
On any list of visionary media moguls in the digital age, Vince McMahon, the professional wrestling impresario, might not immediately come to mind as a likely name.
Yet McMahon and his company, World Wrestling Entertainment, have positioned themselves on the cutting edge of Internet television with the WWE Network, a new subscription-only streaming video service. Introduced in February, the network broadcasts the pro wrestling extravaganzas that were once available only on cable and satellite television.
And today, when the WWE hosts its 30th WrestleMania event at the Superdome in New Orleans — featuring the “Andre the Giant Memorial Battle Royal” — the entertainment industry and Wall Street will be watching as closely as wrestling fans.
Shares of the WWE, a publicly traded company based in Stamford, Conn., have more than tripled in the last year amid the introduction of the subscription network and takeover rumors.
McMahon, 68, controls the company, and his ambitious WWE Network could be his final act in charge, industry watchers say.
“If he changed how pro wrestling and sports entertainment were broadcast forever, I don’t think there’s a better way to go out,” said Brandon Stroud, a wrestling commentator and editor at the sports site With Leather.
With viewers eschewing pricey cable packages in favor of free television on YouTube or monthly subscription services like Netflix, McMahon decided to move where his customers are increasingly going.
His company has poured tens of millions of dollars into the WWE Network, which offers round-the-clock streaming of its programming for $10 a month. That package includes access to the WWE’s pay-per-view showcase events, which can cost up to $70.
“Owning and controlling your own platform is a sea change for us,” said George Barrios, chief strategy and financial officer at the WWE.
It was also a big change for some of the WWE’s longtime partners, who were not as excited about the new venture. Dish Network, which had sold WWE’s pay-per-view specials, decided not to offer the wrestling company’s “Elimination Chamber” event in February. On its Facebook page, Dish criticized WWE, complaining that it was not willing to adjust its costs for satellite and cable companies, “which is unfair to their customers.”
In part to placate its traditional distributors, WWE will show WrestleMania 30 through cable, satellite and telecom providers like Comcast and Dish. But the vast majority of the wrestling company’s advertising for WrestleMania 30 heavily promotes the option of watching the event through its network.
“Realistically, the company needed to untether themselves from the pay-per-view business,” said Bradley Safalow, founder of PAA Research, an independent research firm.
Pro wrestling’s influence on broadcasting dates to the 1950s, when DuMont, the pioneering television network, began airing matches to raise viewership, said David Shoemaker, author of “The Squared Circle: Life, Death, and Professional Wrestling.”
In the 1980s, McMahon formed relationships with cable networks, helping a nascent MTV gain popularity through its wrestling programming. Last year, USA Network was the most-watched prime-time cable network thanks to WWE’s live “Raw” program on Monday nights.
“I think any good entertainment product has to change with the times,” McMahon said. “You have to have your fingers on the pulse of the marketplace.”
The $10 monthly fee — higher than Netflix’s $8 monthly rate — should appeal to the WWE’s core fans, who now gain access to expensive pay-per-view events like WrestleMania. Die-hard fans can watch classic matchups, like 1985’s main event from WrestleMania I, a tag-team battle featuring Hulk Hogan and Mr. T against Roddy Piper and Paul Orndorff.
Michelle Wilson, chief revenue and marketing officer at the WWE, said that in addition to those key selling points, the network plans to add programming like talk shows or animated features to entice nonwrestling audiences.
Fans will eventually also get to view matches never broadcast to a national audience. Since the 1990s, the WWE has been acquiring the libraries of wrestling events from smaller, regional companies, with designs on someday having its own network, said Jim Ross, a former senior adviser to the WWE.
Whether such exclusive content has enticed customers will become clearer on April 7, the day after WrestleMania 30, when the WWE will announce its first subscription numbers for its “over the top” streaming service. The company’s goal is to have 1 million subscribers within the next year, though McMahon said he expected to exceed that number. During that time, the network also plans to expand to 11 countries.
Wade Keller, the editor of Pro Wrestling Torch, who has covered the sport for nearly three decades, said the first number of total subscribers could be anywhere from 80,000 to 800,000. An initial number below 100,000 would be “a disaster,” Keller said.
Early returns show that fan interest has been high. Peter Rosenberg, who co-hosts a pro wrestling podcast with Shoemaker on the ESPN website Grantland, said he watches the network for approximately 15 hours a week.
“You start thinking about what other things in your life you would be willing to do that for,” he said.
While the WWE Network has shown early promise, McMahon has a mixed history with entrepreneurial ventures. The XFL, a professional football league marketed as an alternative to the NFL, was a notable failure. In 2012, the company invested $5 million in Tout, a social media platform that was once heavily promoted on the WWE’s shows, but has faded.
With the network, the WWE has a partner in Major League Baseball’s Advanced Media, an innovator in streaming services that built the streaming infrastructure for the WWE Network. The network servers for that infrastructure crashed on the first day of operation because of unexpected demand.
The WWE will be further put to the test next weekend with WrestleMania 30, which is expected to draw record traffic to its Internet channel. The company’s executives said they were confident the network would hold up to the high demand.
“I don’t think it’s ever been our intention to say, ‘Hey, we’re going to be the first and we want to be the trailblazers and we are the future of television,’” Wilson said. “Our goal has always been about our fans.”