The WWE Network is set to launch on April 1st of next year. The Sports Business Journal reports that its in talks with In Demand and other cable operators to carry the network.
The WWE expects to reach 40 million homes with its network which would have the same reach as Fuel TV and the Fox Soccer Channel. However, it must reach carriage agreements with satellite and cable operators including Cox, Comcast and Time Warner.
Its expected that the WWE will follow the same model as other sports networks by having live events on its network. Notably, some of the WWE’s current PPVs will move over to the network.
The SBJ article notes that the WWE is considering programming beyond wrestling and there’s a possibility it would include some team sports.
In addition to the WWE Network on satellite and cable, it will also have a channel on YouTube.
Payout Perspective:
As the WWE network takes shape, it will be interesting to see how many PPVs will migrate to the network. As Cageside Seats suggests, the converted PPVs could be a value add to attract viewers to the network. By subtracting PPVs and leaving only its big draw PPVs (i.e., Wrestlemania, Survivor Series, Summerslam and Royal Rumble) it could help bolster PPV buys.
Its interesting to note that the UFC’s model differs from the WWE as the UFC relies on its PPVs whereas it appears that the WWE will focus on building its network through moving its PPVs to the WWE network. This is a good idea considering the content of some of the WWE PPVs were not PPV quality. As such, it has been reflective in its PPV buys.
As the WWE Network is taking shape, the biggest hurdle seems to be striking a deal with the satellite and cable operators to come to a deal that will land it on a tier that would be attractive to the casual viewer. Comcast has taken the lead in negotiating a deal on behalf of the WWE. This is likely due to the popular WWE Raw being on the USA Network, a Comcast property.
non wrestling on the WWE channel? eh I guess… Hey, it works for MTV and Cartoon Network.
A cable channel can be a great business model. You get nice recurring revenue. You even get revenue from people who don’t watch your channel, but it got bundled into the package they signed up for. Every channel on your cable line-up gets a small piece of your monthly cable bill.
One big problem is cable bills seem to be hitting a ceiling on consumer’s ability and willingness to pay. But cable channels keep upping their fees to the carriers. Especially the popular channels like ESPN. ESPN keeps eating a larger % of the monthly bill.
This is why the rate of new channels being formed has slowed. In the 90s it was a license to print money. Make a channel, throw in some programming. And start collecting 25 cents a month from ever cable home in America. $.25 per month is about $5 per year. And there’s about 100 million households in the US.
But the popular channels, like ESPN, keep raising their fees, squeezing out the revenue stream of the niche channels.
@Juan – great insight!
I think you hit on a concern for all cable operators of “cord-cutters” and the younger generation that watch content online.
Is WWE Network going to be a channel like Stars and HBO where you pay extra and then turn to a digital cable channel called WWE Network or is WWE Network a channel on On Demand where you pay extra and then change the channel to On Demand and click on WWE Network? Either way, if WWE Network is not too expensive, I will be ready to order the channel.
Joshua:
It is supposed to a pay channel like Stars and HBO, probably around $12-15. The problem is whether your carrier will offer the channel. I believe Comcast may be one of the first if not the only ones for a bit.