October 20, 2014
Former WWE color commentator Jim Ross had some interesting comments about the future of UFC Fight Pass as he seemed rather bullish on the future of the over the top model. The comments come at a time when online services seem to be on the rise…or maybe on the decline depending on what you read.
In an interview with Bloody Elbow, Ross was quoted that the shift for companies such as the UFC and WWE to digital networks is a thing of the future. Despite the rocky starts for each, he believes that it is a “genius-like maneuver.”
With last week’s announcements that HBO and CBS were offering online services and ESPN providing a streaming-only service for NBA content the week before, it’s apparent that over the top (OTT) network offerings are the growing trend. But, is there enough of a market for them? Although the model seems to be geared toward cord cutters, it would seem that the addition of so many subscription services would negate any savings from cancelling a traditional cable package? Would it impact ad revenue?
The WWE will make its quarterly earnings call on October 30th and we will see how much of a dent it has made in its goal of 1 million subscribers to its OTT WWE Network. You may recall it made a meager increase in its goal last quarter. The last report this summer indicated that it had added just 33,000 subscribers for approximately 700,000 total subscribers. Even with the addition of an international market, it is unlikely that the 1 million goal could be met. This should be something that other OTT subscription services should take notice.
On the other hand, all reports suggest that the UFC Fight Pass is doing well (although no numbers have been revealed). But, unlike the WWE, it keeps its PPVs separate from the network. Fight Pass is geared for the hardcore fan and it would be hard to argue that it takes away from the UFC’s PPV buy rate. While Fight Pass offers an extensive fight library and live fights from overseas, most of the marquee names and match-ups remain on PPV.
So, will digital networks like the WWE Network and UFC Fight Pass thrive in the future? Perhaps for the young, cost-conscious consumer that is savvy enough to deal with the online world but do not want to be tied down with a traditional cable package. But, it’s unlikely to take over.
August 10, 2014
The Sports Business Journal (subscription required) reported on the WWE’s launch of its network as part of its feature last week on Over The Top (OTT) networks. The article compliments another within the same issue which talks about the new platform in general.
The article on the WWE reports on the tumultuous time it has had with the launch of the network. Upon the announcement in January, there was much anticipation. But, after the initial numbers came out coupled with the general disappointment the rights fees deal caused the stock to drop and momentum to stop.
The WWE did receive some interesting information from the first few months from subscribers. Despite being off on its projections, the subscribers that have the network are very satisfied with the network. Many utilize the network at least once a week. Also, Xbox and Playstation are the two platforms used by most subscribers. This last part of information would suggest that a younger demo has purchased the network and maybe not as many older viewers (those that one would presume would subscribe for the older content) have the network.
The overarching theme about OTT is the direct competition it has with traditional platforms. At this point, OTT does not offer live sports with the exception of the WWE Network. No big revelation in the article about the WWE. Although the number of subscribers did not hit its target, the users that have it like it. What may be lacking is the older demo that the WWE thought would have been brought in by the vast WWE library.
April 14, 2014
MMA Fighting reports that Titan FC has moved its April 25th event to May 16th. The reason for the change appears to be due to injuries of some of its fighters.
“I refused to put out a subpar fight card when just this weekend three more fighters got hit with the injury bug,” Titan FC president and CEO Jeffrey Aronson said. Raphael Davis is still scheduled to face Jason Brilz in the main event.
In addition to moving the date, it is moving its location from Kansas City, Missouri to Newkirk, Oklahoma.
Another change will be its live streaming of prelims on CBSSports.com instead of CBSSportsNetwork.com.
It’s rare that you see a company move an event so close to the intended date. But if it’s due to injuries and the second time it gets a chance to appear on CBS Sports Network, it wants to put its best foot forward. I am not sure how big the move from CBSSports.com to CBSSportsNetwork.com is in terms of actual viewers, but it appears that there is a possibility of reaching a much broader audience according to Aronson. We have seen WSOF live stream on NBC Sports Network online and Bellator stream prelims on SpikeTV.com. And, of course the UFC has now moved its prelims to its Fight Pass platform. The move to online viewing is another way for fight organizations to grab viewers.
April 7, 2014
WWE announced in a press release this morning that it has 667,287 subscribers to its network which launched this past February and “is well on its way to reaching its goal of 1 million subscribers by the end of 2014.”
UPDATED 9:05am PT – 4/7/14: It looks like that investors are not impressed with the 667K numbers according to Deadline.com and the sell off is more than just investors capitalizing on the stock price. Deadline states that at least one analyst predicted the sub number to be between 500K-800K on Friday. The original expectation was that it was to be at 1M after Sunday’s big event.
The press release comes just one day after Wrestlemania 30 aired without major tech issues on its network. The news appears positive for the company long term although short term WWE stock is taking a hit. In morning trading Monday, the stock is down almost $4 as it appears that many investors are selling off the stock.
The WWE also announced that it broke the record for the Superdome (Mercedez-Benz or Silverdome if you are Hulk Hogan) as its highest grossing entertainment event for the venue. The announced attendance was 75,167 for a gate of $10.9 million.
UPDATE: It looks like Wall Street is not impressed with the 667K announcement as it expected a higher number of subscribers. The stock is taking a big hit as shares have gone done at least 20% today. We will see how this number is spun as the WWE is set to announce a new rights fee agreement in the coming weeks.
The network announcement for its subscribers should be seen as a success as there were many concerned about tech issues that would scare many away. However, there were few reported glitches on any platform for yesterday’s big event despite the fact it was likely the most watched day for the network as most WWE subscribers and many curious non-wrestling fans tuned in to see it. Looking at this strategically, the timing of the announcement makes sense since one would think many signed up close to Wrestlemania to take advantage of the streaming as opposed to paying $70 on PPV.
The real test will be how (and if) the WWE can retain these subscribers. Wrestlemania was the big carrot for the network this year and realistically a one-time thing. How will the WWE continue to grow its subscribers to reach 1 million?
Based on this information, can we assume that UFC Fight Pass is having similar success? While the UFC will not release any information, the speculation is that it is doing well with its digital network and since it is now available for international fans, it probably continues to grow its subscriber base.
February 26, 2014
On Monday the WWE launched its much heralded Network which it advertised to be available on almost every platform imaginable. The good news is that number of those signing up exceeded expectations. The bad news is that it is experiencing technical difficulties across most platforms.
The WWE’s technological partner in the venture, MLB Advanced Media, indicated that it had not expected the demand it has received from people signing up. The WWE released a statement Monday regarding the issues upon signing up and the subsequent technical issues subscribers found once they were able to attain access.
MLBAM, WWE’s tech partner, was overwhelmed and its systems have been unable to process most orders since 9 am due to demand for WWE Network.
— WWE Network (@WWENetwork) February 24, 2014
The WWE also stated that MLBAM was aggressively working to resolve the matter on Monday morning. Although not directly, the WWE inferred that the fault lay with MLBAM for the tech issues. At least, that’s how it is being interpreted in the press. One would think that a part of this has to do with the one week free trial. Even as of Wednesday, there are still problems with logging in.
We are working to fix log-in issues on the @WWENetwork application that are effecting viewers with accounts created in the last 24 hours.
— WWE Network (@WWENetwork) February 26, 2014
In my own experience, I was able to sign up at 6:01 a.m. on Monday via PC, one minute after the promoted launch, but was only able to watch last year’s Wrestlemania in the first hour. I was not able to go through the library until mid-morning. Later that day, the stream was fine for me on the PC but I experienced issues on my iPad. Notably, I have experienced more buffering issues on the PC on Tuesday night and today.
Certainly, these issues are being worked on but the technical issues are a concern for the WWE going forward since its heavy investment in the product. The WWE and MLB Advanced Media must make the fixes soon. If the free trial ends with the problems persisting, its likely that the WWE will lose a lot of potential customers.
Tech issues were a given as to challenges facing this network. The question is how fast can the WWE and ML BAM fix them. If we are to spin this in a positive light, the overwhelming demand for the Network reflects the fact that its promotion of its product created a swell of interest. But, the tech issues could make folks concerned and they may decide not to subscribe if they feel that these issues will be an inherent part of being a subscriber.
July 12, 2013
Live streaming of events is a relatively new technology that smaller MMA/boxing and pro wrestling promotions have taken to as a way to expose its brand to a broader audience. But setting a bigger footprint comes with growing pains as production costs must be weighed with exposing your brand to bigger audiences.
The biggest example of the problem with live streaming occurred this year when Invicta FC’s event in January had streaming issues running through Ustream. The problem dealt with Ustream’s paywall which prevented access to the event. “The issue was an overload of requests to purchase the event in a very short amount of time,” Ustream spokesperson Victoria Levy told MMAPayout. Eventually, the paywall allowing viewers to pay for the event was taken down. Ustream acknowledged an issue with a public apology. Since that issue, Invicta ran another event on the Ustream platform without any substantial issues as Ustream addressed the issues. “The stability of the existing system was improved and basically the whole process was rebuilt to avoid this in the future,” explained Levy of the process to address the Ustream issues
Wrestling promotions Ring of Honor and New Japan among others have had multiple issues with live streaming online. ROH indicated it would not offer live internet PPVs again after several issues with the streaming. Its last iPPV experienced streaming issues during the main event. This was not the first time its events were marred by streaming issues. It has decided to tape delay its events to avoid further issues.
What is Internet PPV?
As you can gather from the name, Internet pay per view, or iPPV, is a platform in which viewers can pay to watch a live show which is streamed online. A company can have the iPPV on its own web site or have a third party, like Go Fight Live, host the event.
Who uses it?
Anyone. From small to big, regional to national, MMA, boxing, pro wrestling and other combat sports utilize iPPV in order to promote its product. The promotion usually fronts the costs for the technology and production costs in order to run the event.
Most promotions seek to establish a bigger footprint outside of its region and perhaps garner an internet following.
What are the obstacles to iPPV?
There are several barriers to entry when it comes to live streaming an event. The first is the cost.
The costs of an iPPV vary. But, according to Roy Englebrecht, promotions should focus on the look of the iPPV. Production costs are very important in how the PPV will look to the viewer. Englebrecht runs Fight Club OC in Southern California. He has attempted iPPV twice but decided to forego online streaming to focus on the people in attendance. “Nobody wants to buy a small club show on the internet because there are not many quality fights and the production is not that good,” explained Englebrecht.
The second issue which ties in with the first is the production value. Englebrecht brought up the issue that the promotion’s brand is out there for the public and anything less than a top notch looking product hurts the brand.
Englebrecht runs an instructional course on fight promotion and does not talk about iPPV or PPV because it makes no sense.
“There are many hard costs before making a dollar,” explained Englebrecht. If a promoter wanted to run an iPPV Englebrecht estimated that at a minimum a promoter would have to spend $2,000-$5,000 on lighting alone. A decoder, a technological piece that is needed for the PPV to work would cost at least $500. These are only a couple of the big ticket costs for an iPPV.
“The key for any promoter is to put on the best show for ticket buyers that are there,” Englebrecht added that if a promoter were to put on a PPV, they would be worried about the PPV broadcast rather the show. “He’s hurting his bread and butter [the fans in attendance].”
Go Fight Live
One of the reasons why small companies use iPPV is to promote its brand and expand its footprint. It offers a chance for those that cannot attend a local event to see it. For fans of the organization that cannot make it, its a chance to watch it at home.
Go Fight Live (“GFL”) is a web site which airs iPPVs for MMA promotions, boxing, muay thai, professional wrestling and other types of combat sports. It started in 2008 and has had over 2000 shows according to GFL’s president David Klarman.
“We’ve sold and had viewership in 199 countries,” stated Klarman. “Our biggest buckets are the U.S., Canada and the UK.”
GFL offers a revenue share of 50/50 for an organization to use GFL to stream an event. It also includes GFL marketing, promotion, customer and tech support for the event. GFL charges the organization if it needs production (e.g., cameras, lighting, etc.)
GFL indicated that a 3 camera shoot with replay technology, audio technology and a commentator area would be at least $1,800 plus travel expenses. A single camera shot would be only $300. However, a one camera shoot may not look and feel as professional as having different camera angles.
GFL’s demographics is 70% male in the 18-45 age range. Klarman indicated that 70% of GFL uses Apple TV, iPTV, iPads, tablets and mobile devices.
GFL has an internal process to ensure that live streaming occurs without any flaws. Klarman stated that GFL has internal diagnostics to figure out issues. GFL has staff to investigate the issue and determine if its a bandwidth issue or something else.
“Its far more complex than that cable that goes in the wall,” said Klarman. GFL has customer service to address streaming issues and can let customers know if its experiencing issues. In the alternative, if a customer could not access a stream they paid for, GFL would refund money.
Although iPPV and online streaming is still a new technology to most, there are signs of where it will be going.
Klarman sees a shift over the next generation that cable TV will change how it interfaces with the consumer. Based on the viewership, more people may be turning to mobile devices.
“Live video streaming will absolutely expand to other platforms,” said Levy. “ We’ve already seen a significant increase in mobile viewing over the past 6 months and we predict that mobile viewing will be as high as 60-65% by the end of the year. Live video streaming will continue to become available to everyone through multiple devices such as smart TV’s, mobile devices, and tablets.”
May 16, 2013
The Sports Business Journal reports on Georges St. Pierre’s health and fitness app as the latest in his portfolio of sponsorships. In addition to his recently released book, “The Way of the Fight,” GSP has been tabbed to do voiceover work for the animated film, “Monsters University.”
GSP remains busy despite successfully defending his title last month against Nick Diaz. The app comes due to the collaboration between GSP’s agents at CAA and developer Zolmo. The app, named “Touchfit” is $6.99 and GSP has an equity stake in the venture although specifics were not mentioned.
GSP’s agent at CAA, Nez Balelo, detailed the difficulty he had at first in finding sponsors for GSP as he had to educate them on who he is and what he did. The article notes that Gatorade and Under Armour were the two big deals that separated GSP from other MMA fighters in terms of sponsorship.
In addition, TheStar.com (of Toronto) reports that he will voice a character in the Quebec French language version of the prequel to Monsters, Inc.
The GSP brand continues to roll. The app coincides with the release of his book, “The Way of the Fight.” GSP’s voicework on the Quebecois/French Canadian version of “Monsters University” is his second film this year as he was tabbed to play a villain in “Captain America: The Winter Soldier” slated for release next year. GSP has carved out a solid portfolio of work that will eventually carry him to his post-UFC career.
May 10, 2013
MMA Junkie reports that the UFC has launched a fee-based subscription service with YouTube. The UFC is one of several channels that is part of a YouTube Pilot Program that subscribers can pay a fee to watch its programming.
“UFC Select” offers a 2 week free trial but will be $5.99 per month. Eight fights will be introduced into the channels’ rotation each week. Old episodes of The Ultimate Fighter will also be shown on the channel.
The launch of fee-based subscription services is a step toward a la carte programming.
This is a solid business move, even if advertising will almost certainly remain YouTube’s main source of income. It helps YouTube promote itself as a complete video delivery platform by giving producers yet another way to earn money there.
The article suggests that the subscription model will do well with sports channels such as the UFC.
It will be interesting to see how well the UFC channel does. What does it mean for the UFC programming on Fox Sports 1? Why watch something you will have to pay for if you can get it through cable. Certainly, the pay channel will have some fights not available on television, but will it be worth it to the casual viewer? Notably, the WWE declined having a paid channel and moved to Yahoo! But, TNA Wrestling has a YouTube channel which will have its content.
May 2, 2013
UltimatePoker.com launched this week as the first legally operated online gambling web site in Nevada. The site, owned by the Fertittas passed a bill granting legal online gambling a couple months ago.
Ultimate Poker has been advertising with the UFC since last year in anticipation of this launch. As many recall, US legislation banned online gambling sites. Delaware and New Jersey have passed legislation for online gaming but have no sites in those states have launched.
Via MMA Junkie (via USA Today)
Games will be as small as 25-cent bet tournaments and $300 limit table. The company believes the games will be a complement to casino gambling and not a competitor. The goal is to allow players who may be intimidated in a casino or otherwise more comfortable in an online setting.
This investment could prove to be a boon for the Fertittas. Online poker was one of the driving forces behind The World Series of Poker phenomenon which had ESPN airing hours upon hours and multiple-versions of the poker tournament. With legislation passed in Nevada, Delaware and New Jersey, we can see more poker sites going up which may mean, in an indirect way, more sponsorship opportunities in MMA (pinpointing on the young male demo).
April 17, 2013
The Sports Business Journal recently ran an in depth section focusing on the importance of content. One of its features included Top Rank Boxing and its strategy of producing its own feed for PPVs with the future hope that fans will turn to its web site as opposed to cable and satellite providers.
When subscribers pay $60 for a PPV, half of it goes to cable and satellite companies. Top Rank is attempting to cut into that pie by offering its own broadcast on its web site. Top Rank has teamed with MLB Advanced Media in developing content for its web site and offering its own production of its events. This includes its own feed of the PPV with its own camera angles and broadcast team.
Top Rank states that 3,000 people paid the same amount charged by satellite and cable providers for Pacquiao-Marquez IV. The belief is that with the growing amount of cord-cutters, the number of those ordering PPV online in the future will increase.
In addition to airing PPVs, the Top Rank site includes weigh-ins, interviews and behind the scenes content.
The UFC has looked into partnering with XBox in hopes of finding alternatives than the traditional PPV measures. The one issue pointed out in the SBJ piece is that a move to online PPV eliminates the promotional assets of the satellite and cable companies. This is something that boxing and the UFC rely on in promoting its upcoming events. The other issue is the reliance of live streaming. Several organizations including Invicta and the WWE have experienced technical difficulties during its live events. This can be a big issue if the platform becomes unreliable. But, turning to its own self-production of its product can mean bigger profits for the company.