SBD/January 9, 2014/Media

WWE To Launch Over-The-Top Digital Net, Subscription Service Supported By MLBAM

WWE Network will cost $9.95 per month with a minimum six-month commitment
World Wrestling Entertainment last night at the Int'l Consumer Electronics Show in Las Vegas announced the creation of WWE Network, a full-time, over-the-top digital network combining live and on-demand content. The digital video will be supported by MLB Advanced Media, marking the second big outside contract announcement in as many days for baseball's digital arm. WWE Network content will include all of the property's pay-per-view specials, including WrestleMania, and carry a cost of $9.99 per month with a minimum six-month commitment. The direct-to-consumer subscription cost represents a massive discount from linear TV PPV costs from all its combined events, but WWE execs intend to make up the revenue shortfall and then some through increased scale, with project profitability at around 1 million subscribers. The net will launch Feb. 24, and be available through a large array of connected devices, including online, mobile, video game consoles, and Roku streaming boxes. WWE's existing cable programming, including Monday Night Raw and Friday Night Smackdown, will be maintained and supported with pre- and post-shows on WWE Network (Eric Fisher, Staff Writer). VARIETY's Marc Graser reported WWE execs "chose the February launch date because it follows the 'Elimination Chamber' PPV and kicks off the six-week ramp up to 'WrestleMania 30,' treated by the company as its Super Bowl." WWE Chief Revenue & Marketing Officer Michelle Wilson said, "We looked at when the best time of year was to launch this, and felt 'WrestleMania 30' was a great hook." Content on the new net "won’t be exclusively PG the way its current line up of TV shows are," as programming will feature "a range of series, with content rated TV-14 or TV-MA preceded by advisory messages." Parental controls "are also available" (VARIETY.com, 1/8).

NEW APPROACH: In L.A., Joe Flint cites regulatory filings as showing the WWE "first started talking about the network about five years [ago] and has spent" more than $40M on development. WWE initially "planned on a commercial cable network," then it "toyed with a pay channel model similar to HBO." WWE Chair Vince McMahon said that while a more traditional channel "could ensure a certain level of distribution," the terms pay-TV distributors "wanted in return for carrying a WWE channel were 'too restrictive.'" He added that the promotion had deals "ready to go with major distributors for a network that would have generated fees of 20 cents per month, per subscriber." The WWE instead "looked at how Netflix was able to create an OTT service and became convinced that its own rabid fan base would embrace a similar approach." The decision to go with an OTT service "may dampen the WWE's relationship with the cable and satellite operators that currently distribute their pay-per-view specials." The WWE said that it will "still offer its specials to cable and satellite operators." The net will be "mostly commercial-free but there will be sponsorship opportunities for advertisers" (L.A. TIMES, 1/9). MULTICHANNEL NEWS' R. Thomas Umstead noted the net will "launch with several new, original series such as The Monday Night War, a series exploring the mid-90s rivalry between WWE and WCW; WrestleMania Rewind, a comprehensive look back at the biggest moments of the WWE’s franchise PPV event; WWE Countdown, an interactive countdown series; and WWE NXT, featuring up-and coming Superstars and Divas" (MULTICHANNEL.com, 1/8).

BANG FOR THE BUCK? The WALL STREET JOURNAL's Merissa Marr notes the per month price point "pitches the network above direct-to-consumer services such as Netflix Inc. but below sports offerings like Major League Baseball's MLB.tv, which cost $7.99 and $25 a month, respectively." WWE said that it "didn't want to breach the psychological barrier of $10" (WALL STREET JOURNAL, 1/9). In Philadelphia, Vaughn Johnson writes the net offers "tremendous value for the amount of content that will be at the tips of people’s fingers." The price point, granted, comes "with a six-month commitment, but that’s still only $60.00 for six pay-per-views, which costs nearly $60.00 per month." Something to "keep an eye on is how good the streaming quality will be." There were numerous reports of the WrestleMania XXIX stream on WWE’s website "failing multiple times last year," which "explains the reason for the company working with" MLBAM (PHILLY.com, 1/9).

ROLLING THE DICE: AD WEEK's Sam Thielman wrote the net is an "undeniably gutsy move for the entertainment company and one likely to raise its profile, but it's also a costly one." WWE Exec VP/Digital Media Perkins Miller said that the net would "include bells and whistles like push notifications for the networks' mobile app, which will also stream the shows on your smartphone when you're not at home and provide second-screen content when you are." The promotion has "one of the few back catalogs that hasn't yet been monetized by a streaming service; this new experiment will demonstrate exactly how well a single fandom can support a single stream of content" (ADWEEK.com, 1/8).
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