While many programmers grapple with how new technologies such as video-on-demand will affect their business, World Wrestling Entertainment is climbing into the ring with a new subscription VOD service.
This move to VOD, and to be part of subscription VOD in the future, may well be the precursors to a digital cable channel 18 months down the road.
“We think that content is king,” said WWE Chairman Vince McMahon, adding that WWE has found that the wrestling audience “is happy to pay if you give them the right product.”
WWE CEO Linda McMahon said her company has a number of unique and valuable assets in its corner. That will be important as the company bids to expand its business in the face of an increasingly fragmented entertainment landscape.
WWE weighs in with a library of 75,000 hours of programming, much of which has not been seen more than once. It also has a core of rabid fans who have an insatiable appetite for sweat and spandex. What’s more, it has a heavyweight promotional platform.
That means that while other networks and producers worry that VOD will cut into their ratings and ad revenues, WWE believes that making the new service, dubbed WWE 24/7, available to customers will generate new revenue and help promote its broadcast, cable and pay-per-view offerings.
Mr. McMahon said episodes from this year’s “Raw” and “SmackDown!” won’t be available on SVOD. Nor will current editions of pay-per-view events such as “Wrestlemania.” But he said that “classic” matches featuring old-time favorites will be attractive enough to help cable operators drive acceptance of their new digital platforms. “We want to do for VOD what we did for pay-per-view,” he said.
Ms. McMahon added that “hard-core fans won’t want to miss a match” on PPV, broadcast or cable, no matter how much they enjoy the archival footage.
WWE 24/7 will be available to cable operators and satellite providers as of April 1. No distribution deals have been struck yet, and company executives declined to predict how many homes will be on board by the end of the year.
WWE has set up a new unit, WWE Enterprises, to distribute and market its new digital offering and has hired Tom Barreca as senior VP of the unit. Mr. Barreca was most recently senior VP of AMC Digital Ventures.
Mr. Barreca said he joined WWE because of the opportunities presented by the size and quality of its library and by the volume of new material it produces, including 10 hours of new programming per week, 52 weeks a year. “There’s no off-season,” he said.
“It’s pretty amazing in today’s TV business to find content to repurpose that has only aired once,” Mr. Barreca said.
He said other networks, including ESPN Classic, wanted to buy some of that footage, but WWE retained it until now.
WWE 24/7 will make about 20 hours of video available to subscribers each month and will refresh about 25 percent of that content weekly.
Fees in Play
The company has tested prices of $6 to $10 a month, and will set fees in conjunction with participating cable operators. The company will have to negotiate how to split that revenue with operators, but Mr. Barreca said he expects WWE to garner the majority of the purse. To spur trial, it will offer some VOD content free and will also provide broadband content for distributors promoting the SVOD offering.
WWE hasn’t decided whether to have advertising on the service. “We’ve looked at it,” Mr. Barreca said. “We expect down the line there will be opportunities to do some things with our current sponsors.”
The move into digital video comes as some of WWE’s primary businesses may be recovering. After Turner Broadcasting pulled out of the professional wrestling business in 2001, WWE decided to split its wrestlers into two groups. That resulted in some loss of viewership, Mr. McMahon said.
So far this season, “WWE SmackDown!” on UPN is down 9 percent among adults 18 to 49 and down 15 percent among adults 18 to 34.
But “WWE Monday Night Raw” on Spike TV drew its highest ratings in almost two years on March 22. The previous week, it delivered more adults 18 to 49 than any other show on cable.
Ms. McMahon said the recent “Wrestlemania XX” exceeded all of the company’s budget numbers.
WWE is adding two more PPV events this year, for a total of 14. “Buy rates are good. Satisfaction levels are high,” Mr. McMahon added. “We give our fans more than they bargained for.”