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Internet Ploy by USA ‘Raw’ Snubs Ads

Oct 24, 2005  •  Post A Comment

In an unusual maneuver that one media agency executive described as a dangerous precedent for advertisers, World Wrestling Entertainment has started pushing viewers to its Web site during commercial breaks in “Monday Night Raw” on USA Network.

Rather than halting the event when USA cuts to commercial, WWE shifts its live wrestling coverage to its Web site. Several times throughout each “Raw” telecast, viewers are prompted by graphics and comments from on-air talent to use the commercial breaks to go to WWE’s Web site and view “WWE Unlimited,” where they’ll find an exclusive online feed of continuing “Raw” coverage.

“It devalues the position of the existing advertisers in the program, particularly since wrestling sells itself as having engaged fans,” said Tim Spengler, director of national broadcast for Initiative. “Now you’re talking about telling the most rabid of fans to switch to another platform when advertisers are wanting to talk to them. It sets a dangerous precedent.”

WWE and USA told TelevisionWeek the effort was designed to create a more interactive experience for wrestling fans and keep them engaged in the brand.

“This experience has changed the way we think about our product,” said Chris Chambers, senior VP for interactive media at WWE. “It’s a 24/7 product now.”

After a ratings slide in recent years, WWE has several interactive initiatives under way that may help boost the brand. What’s unclear is how good these initiatives are for advertisers.

“On the positive side, it’s a way of engaging a consumer in a multimedia environment that would be good for program ratings and program retention,” said Lyle Schwartz, managing partner at Mediaedge:cia. “The concern is you’re pushing people away from the program to the Internet. [USA is] being paid for their ability to the deliver the audience to the commercial. And if the computer is not in the same room, do they leave the room to go to the computer? Does a viewer really want to interact that way?”

The network has received no complaints from advertisers so far, said Chris McCumber, senior VP marketing and brand strategy for USA.

WWE and USA’s executives say research proves that “Unlimited” could actually boost exposure to “Raw” by keeping viewers who have a computer and TV in the same room within earshot of ads rather than leaving to grab a snack or take a bathroom break.

“It’s a live program and action is always happening, so it seems like a no-brainer to keep people involved in the story lines,” Mr. McCumber said. “Anecdotally, we know [the audience is] multitaskers, and also communal viewers, chatting online or on the phone. So it’s a win-win for everybody.”

The one possible exception, of course, is for advertisers already frustrated by the erosion of commercial viewership due to digital video recorder use and sharing viewer attention spans with the Internet.

But the ads in the program are of little concern to WWE, which has no stake in commercials that run on “Raw” per the agreement with USA. Unlike WWE’s arrangement with Viacom-owned Spike TV, which aired “Raw” for the past five years, the deal to bring the show back to USA is a straight cash arrangement.

USA sells all of the ad inventory in “Raw” and retains all ad revenue, according to a WWE spokesman, citing the company’s 8-K filing issued in April. The WWE’s ad revenue from “Raw” on Spike for the fiscal year ended April 30 was about $37 million, according to the filing.

World Wrestling Entertainment pockets about $30 million a year from the three-year deal it struck with USA-owner NBC Universal to air “Raw” on USA.

WWE had been collecting about $13 million a year on Spike as net profit from the advertising revenues it gained by selling about two-thirds of the advertising in “Raw” and in a couple of non-prime-time weekend shows, according to an 8-K filing with the SEC.

“The reason WWE is doing this is because when they were on Spike, and USA way back when, they owned most of their ad inventory,” one cable industry source said. “Now USA owns most of the inventory.”

USA executives downplayed “Unlimited’s” distraction from advertisements and argued that the online content set-up is not entirely unprecedented.

“When we go to commercial, there’s no prompt to go online,” said Mr. McCumber. “If you look at other live events, like ESPN, they do something similar. There are statistics and race updates available online.”

Mr. Chambers said a WWE research study showed that 60 percent of viewers simultaneously watching “Raw” on television and WWE Unlimited live on their computers are not switching channels to another network during the commercial breaks.

“Most of these people have wireless networks in their homes, their TV is where their computer is,” he said. “If they weren’t online, they’d probably go get a snack or go the bathroom. This way they’re probably still in the same room and can hear the ads.”

The “Unlimited” concept was inspired by “Taboo Tuesday,” a pay-per-view event the WWE has held the past two years. For “Taboo,” viewers can go online and vote on which wrestlers will compete in the show, the nature of the contest and the consequences for the loser. When USA picked up “Monday Night Raw” from Spike, Mr. Chambers’ team brainstormed about how they could make that kind of interactive experience a weekly event for USA.

So far, fans have responded to both WWE’s return to USA and “Unlimited.” Total viewers have averaged 5.2 million for the first three “Raw” episodes, about 34 percent higher than the last four episodes that aired on Spike TV.

For the exclusive Web content, the number of streams downloaded by fans has increased each week, peaking at 350,000 unique visitors for the most recent broadcast.

“Honest to God, we’re surprised,” Mr. Chambers said. “It’s been growing each week.”