KELLER: Is the end of WWE events on pay-per-view near? Is it a gamble worth taking?
The key lines from today's story at the Sports Business Daily is this:
"The planned channel’s marquee programming would come from most of, if not all of, WWE’s current pay-per-view events. The company generally produces 13 PPV events per year. Most will migrate to the channel. It’s not known how many would remain PPV."
This is further indication that WWE sees the PPV model as dying. The hefty 45-55 dollar price tag has driven away customers by the hundreds of thousands, accelerated by the ability to see pirate feeds on the Internet. The frequency of PPVs, once two per month during the brand-exclusive experiment a few years ago, also made it a budget-buster for many people, watering down the line-ups and breaking viewers' habits. Also, the drive to maximize TV ratings on USA and SyFy has led to more and more big matches on their basic cable shows, again diminishing the sense that PPV events were worth the price.
Rather than continue to watch domestic buyrates drop below 100,000 for many of their non-marquee PPVs or trying to fight what may be an inevitable continued decline, they are taking a bold approach of trying to switch most or all PPVs to an exclusive WWE Network, which would in all likelihood lead to a massive increase in viewership of these special monthly events (since people with the WWE Network wouldn't have to pay for each event).
If that's the plan, it's a dramatic change in WWE's business-model and a dramatic change in how WWE produces and paces major feuds and TV shows. Would the priority for big matches shift from the PPV line-ups to even more on USA and SyFy shows? Or would WWE refocus energy on making top "PPV event" matches more exclusive in order to drive up viewership for the start-up WWE Network?
Would WWE still try to make WrestleMania as special if it were thrown in as part of the WWE Network rather than an event sold to fans for 55-65 dollars? Would it lead to a decline in the WrestleMania event being a showcase that features the biggest matches of the year, or would the increased viewership on the WWE Network give WWE every incentive to keep it as special and exclusive as it usually feels as a PPV?
WWE would love to get away with keeping WrestleMania on PPV and not give up that revenue, but perhaps shift all or most of the other PPV titles to the WWE Network. But WWE moving WrestleMania to the WWE Network would create a greater demand by consumers to have access to the WWE Network on their cable or satellite system, perhaps a key to making the WWE Network a success. Once WWE offers WrestleMania for "free" on its WWE Network, they would have trouble going back to the PPV model, so it'd be a big gamble. However, it's also big gamble holding course because PPV appears to be a dying model for WWE, at least as it's currently structured and promoted.
UFC is also serving two masters with the new deal with Fox and FX, with more need to put fights on free broadcast TV (Fox) or basic cable (FX, Fuel) in addition to PPV. The Fox deal could expand brand awareness for UFC and massively increase the fanbase of MMA, but it could at the same time dilute the fight card quality for PPVs and condition MMA fans - like NFL, NBA, and MLB fans - to expect to see marquee live fights for free.
The future of PPV, which took shape in the late 1980s and has been a major revenue source for WWE the last 25 years, has never been more in question.
WWE is putting a tremendous amount on the line by potenially throwing in the towel on the monthly PPV formula, although with diminished buyrates they're risking less than at any time in the last 20 years.
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