Thursday, January 09, 2014

Dear Forbes... what?!


So, does the writer believe that by launching the WWE Network, somehow McMahon will force the hands of NBCU and Viacom to do.......... what?  Move Raw & Smackdonw on to his WWE Network?  Hilarious.  Vince would be threatening to walk away from $106M in domestic TV Rights Fees so he could try to somehow recoup that money on the Network.  That's beyond laughable.  

WWE needs the new TV Rights fees money to subsidize the projects like WWE Network so it has time to get legs and grow.  WWE is now primarily a television company.  Consider that 75% of US Adults have Cable/Satellite service. Meanwhile, the next biggest over-the-top competitor, Netflix, is subscribed by 29% of US Adults. (source)  (That's for an established OTT service, not something new like WWE Network.)  WWE couldn't survive if they weren't on weekly television.

In fact, if you really understood the business, Forbes would have been talking about how WWE just basically endangered $60M in domestic PPV money that MVOD (cable/satellite providers) get from WWE PPVs (through their PPV split).  He put that money on the chopping block by launching this Network, especially by including Wrestlemania.  In fact, the whole narrative that WWE spread at the conference (beside their ludicrous household affinity numbers) was "death of pay-per-view" which was a thumb to the eye of the companies that'll be bidding on his shows. This is right before WWE is trying to nail down new TV Rights fees by April 2014.  I never thought they'd go ahead and launch before they had the bidding sewn up, but they did.

I love the WWE Network. I think it's a great project. But I will be astonished if they don't lose money on it (should you factor in the drops in other core business) by end of 2014. It doesn't matter a lot because they're poised to get some huge TV Rights Increases... from the Networks! I guess the WWE Network puts WWE in the news, but it certainly isn't what this writer thought it was. Especially when the narrative should have been something about how all these "quaking in their boot" MVODs actually turned WWE down several times when they tried to launch their network as a channel (basic or subscription-based)!


No comments: