This week kicks off the first round of WWE’s Mixed Match Challenge on Facebook’s Watch tab. The event is a mixed tag team tournament featuring wrestlers from both Raw and Smackdown brands. While some of the biggest names in the company (Braun Strowman, Sasha Banks, Charlotte Flair, and The Miz) will be competing in the inaugural tournament, WWE’s interest most certainly lies far outside who will win.
The tournament is about bargaining power and future decisions around WWE programming. Up until this point, WWE’s content has been available to fans and casual observers in one of two distribution methods: linear TV and the WWE Network. The Network has amassed about a million loyal subscribers domestically but has struggled to surge past it as its massive library of historical content and sporadic series appeals to only the hardcore fan.
Because of the Network’s loyal, but somewhat limited draw, the company has always treated its television program as the top of the funnel for potential subscribers. It’s clear in their programming: Push big top stars, have jaw-dropping moments (Braun tipping over an ambulance), and hope that you can draw enough interest to convert the casual channel-flipper into a monthly subscriber. While this strategy has served the company well up to this point, the future is coming fast and WWE has to adapt to a shifting digital and linear landscape.
First, WWE has their massive NBC Universal contract ending in 2019 so negotiations for that new deal, with NBC or elsewhere, start in earnest this month. WWE has already announced they want to make clear their programming deal well before the current contract expires. This means it’s time for the WWE to explore all options.
It’s been reported that FOX is interested in talking with WWE, and there’s nothing that drives up the price of a deal better than a bidding war. Doing an event like MMC allows the WWE to show that they can produce these one-off events across digital platforms. It allows another lever in the negotiation which could give their linear partner access to these events that could run on apps like Hulu or the forthcoming Disney app.
Digital applications of content is going to be more and more important for TV partners as the landscape of how TV is changing makes the future of linear television murky. The more adaptable a partner can be to creating quality content on all platforms, the more attractive they are going to be to the network. This will be a front row seat for FOX and NBC to see how WWE is able to leverage their TV audience to push people to Facebook to watch the challenge.
Second, don’t be surprised if this MMC is about WWE testing the waters of putting a program on a third party platform like Facebook. Vince McMahon prides himself on being a forward-thinking CEO and he knows that the younger demo (a constant key demo for WWE) is less interested in TV and spends more time on Facebook, Netflix, Amazon, Snapchat, and other platforms that are engaged in an arms race for our attention. Committing to a long term deal on TV still might seem like a good idea in 2017, but what will it look like in 2021?
The biggest online content companies are spending more money on content and are increasingly interested in live content. WWE currently owns two live programs that are market-tested, have loyal audiences, and virtually have no expiration date.
TV shows run their course, but WWE could run for another 20 years.
While I, and most, think it’s highly unlikely that the next WWE TV deal will shift to Apple, Facebook, or Amazon, don’t be surprised if WWE uses this test to negotiate a deal to produce 205 Live, NXT, or some other iteration (could you imagine a Women’s Division show?) down the road.
And for Facebook, this is meaningful for them. While the Facebook Watch efforts have begun with publishers like Refinery29 and Inverse, there’s no question that Facebook has to be considering longer forms of content that could bring in TV revenue dollars; that’s the one huge piece of the advertising pie that Facebook has yet to take a slice from.
The Mixed Match Challenge gives Facebook a live series with a built-in TV advertisement and a loyal audience to test on their platform. The mid-roll ads you’ll see will be a great proving ground to the larger ad world that audiences are willing to sit through ads for the right programming and that live events can work on the platform. Don’t be surprised if Mixed Match Challenge is successful by Facebook’s metric that in a few years you could see a few of WWE’s marquee PPVs on Facebook exclusively.
The tournament itself should be fun, but the distribution could be groundbreaking for how fans watch WWE programming in years to come.
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