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TV Connect 2015 Day 2 highlights: WWE Network starting to pay off

Ted Hall

Ted Hall

Ovum analysts relate their day-by-day highlights at this year’s TV Connect

Ted Hall, Senior Analyst, TV, Ovum: D2C trailblazer WWE today provided an insightful update on the rollout of its WWE Network product, an OTT-video service that offers the bulk of the sports entertainment organization’s content to fans on a stand-alone basis in 177 countries for a monthly fee ranging from $9.99 in the US to £9.99 ($15.40) in the UK.

Most importantly for the market leader in professional wrestling is that the radical shift in its business model is starting to pay off. Although it took a little longer than expected, WWE Network has now reached 1.3 million subscribers, having launched in February 2014. This puts it in the breakeven range that will compensate WWE for revenue lost from traditional-TV-distributed monthly PPVs, access to which cumulatively costs around $675 when purchased via US pay-TV platforms.

Evaluating the Network’s success, Ed Wells, SVP & MD of International for WWE, declared that the company was reaching the “light at the end of the long dark hallway.” He shared some key lessons that will provide food for thought for other content providers moving towards a more millennials-focused digital distribution strategy.

Notably, Wells explained that WWE Network-driven digital engagement has helped drive a 2–3% global ratings increase for its flagship, advertising-supported Raw and Smackdown shows, both of which continue to air on a first-run basis only via broadcast TV. The finding supported his claim that OTT viewing on other platforms and devices is additive and is serving to boost the overall audience for WWE’s programming. It will also provide encouragement for other broadcasters and content owners seeking to maintain their linear TV ratings at the same time as building a digital following.

Simplicity was another key message from Wells. Some initial tinkering with the pricing – including a minimum six-month commitment and an additional monthly premium for allowing users to cancel at any time – ultimately gave way to a no-nonsense £9.99, no-commitment model. Educating fans young and old – with many more mature fans that had lost touch with the product drawn back into the fold by the nostalgia of WWE’s archive content – was crucial, Wells said.

Although these are lessons that all content owners can learn from, whether or not they can achieve the same level of appeal with their own D2C services remains to be seen. WWE Network’s value proposition means that it appeals to cord-cutters and pay-TV subscribers alike – a saving of around $555 on PPVs when received via the OTT service instead of traditional TV is difficult for even a casual fan to resist. D2C offerings from the likes of HBO, CBS, and Nickelodeon cannot have quite the same allure, catering more to a generation of TV viewers whose faith in traditional pay TV may be waning, rather than the large number of households that remain loyal to it.

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