Even for a property that subsists on story lines constructed for maximum drama, the World Wrestling Entertainment’s initial experience with its OTT WWE Network has been tumultuous.
WWE announced the initiative to grand spectacle in January at the International Consumer Electronics Show in Las Vegas. Backed by the video streaming infrastructure of MLB Advanced Media and priced at $9.99 per month with a minimum six-month commitment, the WWE Network debuted Feb. 24 with a 24-hour-per-day feed of live and on-demand wrestling programming to online, mobile and connected TV devices. Programming included all of its series of pay-per-view specials that typically cost $60 each.
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WWE Network has grown to 700,000 subscribers.
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The WWE set an initial goal of 1 million subscribers to the WWE Network by the end of the year. Between the January announcement and early March, the company’s stock on the New York Stock Exchange nearly doubled to more than $31 a share. But after announcing more than 667,000 subscribers just six weeks into the service’s existence, WWE stock has been in an extended slump. As of last week it was hovering around $13 share — lower than it was before the WWE Network was publicly announced.
The main factor in Wall Street’s reaction was the negative impact the digitally focused WWE Network had on its traditional TV business. Soon after the debut of the online service, WWE announced a new TV deal with NBC Universal that delivered only a 50 percent increase in its prior rights package, far less than investors anticipated.
Second-quarter earnings announced last week did not do much to reverse Wall Street opinion. WWE disclosed that the WWE Network has grown to 700,000 subscribers, representing minimal net growth since early April and also a sharply increasing amount of user churn. WWE is still pressing forward with its broad redefinition of its media model. Among the coming moves are an aggressive international expansion that will bring the service to more than 170 countries and territories and a new pricing plan that will offer a $19.99 per month option with no minimum commitment.
“This is a really big deal for us. We’re essentially talking about the transformation of the company and how our fans consume our content,” said Michelle Wilson, WWE chief revenue and marketing officer, of the WWE Network. “There’s not really a direct comparable out there. To have a paid, 24/7 OTT channel out there with both live and on-demand programming, and available across so many different platforms, that’s not really been done.”
Because WWE was the first out of the box in offering a full-service, 24-hour OTT sports network, it also has some of the first glimpses into its actual consumption patterns. More than 90 percent of WWE Network subscribers have logged into the service at least once a week, more than initial company projections that suggested a higher percentage of consumers would use it simply as a cheaper means to watch pay-per-view specials.
The Xbox and PlayStation gaming consoles have been the most popular platforms to access the service.
In addition, WWE internal research has found wrestling fans consume five times the amount of digital content as an average consumer and are twice as likely to subscribe to Netflix or Hulu Plus. And customer polling has found 90 percent of subscribers either somewhat satisfied or extremely satisfied.
