Back in January, I had a conversation with my good friend Tom Campbell about the WWE building their business around the Network, and immediately brought up my feelings that this project was doomed to fail. Campbell, to my surprise, said I was the first person he'd heard be negative on it.
I'm sure I wasn't, but looking at how things are playing out, I'm more baffled that people didn't see this coming. Looking at the basic principles and mathematics, it's an awful premise. Let's evaluate:
The biggest audience WWE gets is 4 million viewers, give or take, for Raw (in the US). For their Pay-Per-Views, they would average about 200,000 buys, with the exception of Rumble and Mania. This would be converting about 5% of free viewers into buyers.
Their plan was to cannabilize Pay-Per-View. As a result, the WWE Network, as it was laid out from almost the beginning, needed 1.5 million subscribers in the US alone to break even. TO FUCKING BREAK EVEN.
That's 37.5% of its Raw viewers. They were hoping to go from 5% to 37.5%, on the premise that putting Pay-Per-Views and archived content on at a lower price would create a significantly higher viewers-to-buyers conversion rate. On paper, it sounds difficult, but possible. But to believe this was going to work ignores a fundamental aspect of why Pay-Per-Views weren't doing better in the first place.
The vast majority of those free viewers are not conditioned, and haven't been for some time, to spend money on wrestling. They'll tune in for free, granted, but most of them don't separate from their cash to see more of it on their television. They get 3 hours of Raw every single week, and seldom is there a show where, at some point, it isn't dragging a bit. 3 hours is more than enough for the casual fan, and even if it wasn't, and were looking for an extra dose of wrestling, they also get a bonus two hours of Smackdown for free as well. Why would that fan, Mr. John Q. Walmart if you will, possibly want to pay for more? To see the Pay-Per-Views? Value doesn't work that way, and that's been historically proven.
WWF's In Your House series was supposed to be a cheaper alternative for major Pay-Per-Views, and it failed, because while the idea of attracting people that didn't buy before is nice, none of them did, because they weren't conditioned to. Meanwhile, the consistent buyers purchased the show in lower numbers, because they saw them as missable. Cheaper. Less important. Less value = fewer buys. When the In Your House shows were raised from 20 dollars to 30 dollars in September 1997, in line with the major shows, they didn't do any less buys, and they made 50% more money.
People will buy WrestleMania whether it's ten dollars or fifty dollars, because the buying audience that's there sees its value. And value does not come in dollar figures, it comes in your personal sense of gain, which stems from passion you have for the medium, and the importance you place on the item (in this case PPV/Network) in context to it.
WWE has NEVER convinced 1.5 millions fans in the US to purchase WrestleMania, the most valuable thing they sell. 1.5 million subscribers was a fantasy, a number they didn't have a prayer of reaching, at least at first. WWE announced 667,000 subscribers in their first conference call discussing figures. Consider again that a chunk of the more passionate overseas fans figured out how to get it as soon as, and it makes you question what the true American number is.
On July 31st, WWE is announcing the updated number of subscribers. Anything less than 850,000 should be considered horrifying, but I will be very, very surprised if it's that high. There is potential for growth when it gets launched internationally, don't get me wrong. The British market is thriving for wrestling, they're the ones who dominate WrestleMania and Raw, flying across the world to be part of the product and express themselves, the latest breed of "ECW fan". They are willing to spend the most money on the product out of anyone in the world right now.
In addition, Japan is an interesting nut to crack, especially if KENTA gets some traction in the WWE. But as the Network expands, so do the costs, and the necessary number of subscribers to make it all fly.
The Network is not the XFL, a "nice-to-have". They have changed the face of how they operate their core business. As a result, I'm surprised they aren't pushing the Network harder. The last two weeks they've done a fairly serious sell for it, but given how much constant verbal fellatio we had to put up with about Tout and Twitter a couple of years ago, which made nobody any money at all, it's baffling to me why there isn't a new video package every week on Raw detailing a historic moment, match or television show, giving people a taste of something distinctly different every time, saying they can only see it in full on the Network.
Pay-Per-Views should be more important than ever in terms of promotion, but they'd rather spent valuable TV time on the Fandango/Layla/Summer Rae fiasco than focus more seriously on reasons to separate fans from cash for the monthly megashows. The television needs more focus. Things have been a bit better lately, but they need to tighten up what we're seeing. When you have so much time to fill, it's harder than ever to create a perfect product, but there is very little in the WWE that seems important of late.
We have some rising stars, but outside the key 6 or 7 guys and the World Title, everything else is filler - guys treading water, fighting for unimportant belts they've all held before that didn't get them anywhere the first time. This needs to change. And it can. Whenever people think back to the time they loved wrestling the most, they almost always talk about how much things meant back then. How important something was portrayed as being. In those moments, people attached great personal value to the product. That doesn't exist to many people today. They follow it, but the high stakes that the product thrived on in years past is gone. A lot of it is due to the same talent being in the same positions for so long. Results matter far less when the consequences are negligible.
While Vince McMahon is pulled in a million different directions, has countless masters to serve, and is hellbound, till the day he dies, to do it all his way, he surely hasn't lost sight of the fact that separating fans from cash is, was, and will always be what the wrestling business is really about. And he'd better figure out how this Network is going to go about doing that real soon, because it's going to take a lot more than Jerry Lawler's begging like a homeless man to recondition a million people.
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