The WWE Network Launch Was Handled Well
A recent piece written by fellow Rant Sports contributor Jeffrey Harris brought up some very good points about the shortcomings of the WWE Network. Within, he referenced TV providers dropping WWE’s pay-per-view events from their services, subscription numbers being lower than expected and the layoffs of numerous WWE employees, including some individuals with decades of time served for the company.
While these are all true statements and the assessment of WWE’s situation is a valid one, I have a rebuttal to the comments made in Harris’ piece. As it pertains to PPV events being dropped by DISH and DirecTV, the money that would have been shared by WWE and those companies now goes 100 percent into Vince McMahon’s pockets (so to speak). Granted the earning is $9.99 per month instead of approximately $40 (or less) after PPV providers take their cut, but WWE’s initial launch required a six-month commitment; this means that WWE made money from people who would have purchased WrestleMania and waited until at least SummerSlam to buy another show. Instead of getting a portion of $60 for a one-time purchase, the company received the total $59.94 shelled out by those individuals.
WWE estimated/hoped to have one million subscribers by the end of 2014. With their recent financial report giving us a total of approximately 700,000, a total with seven digits is certainly not out of the company’s grasp, especially with the Aug. 12 launch of the Network in 170 countries worldwide. They are sure to make up the 300,000 needed to make it to a million. On top of that, WWE will soon be offering a one-month subscription at the rate of $19.99. There are many people who did not subscribe to the WWE Network due to their unwillingness to commit to paying $9.99 per month, so the option to buy PPV events for $35 to $45 less than usual is going to be appealing. Some of those consumers will end up buying at least two shows per year, probably more than that due to the lower price, which will end up eventually making up for the loss of traditional PPV revenue.
On the subject of the significant layoffs, Jeffrey is completely correct. The Network’s costs have led to WWE making the decision to cut back on staff in an effort to save money while their baby grows up. This, of course, was not a necessity. WWE is a business, and like many big businesses, their main goal is to make as much money is possible. That is obviously not a bad thing, but the short-term savings thanks to layoffs would have easily been made up for when WWE’s venture into a new world of programming gained proper footing. Being a publicly traded company, I assume they wanted to be able to report as low of a monetary loss as possible. I don’t know how the stock market works (other than on the random whims of knee-jerk reactionaries), but one would have to assume that it would cast a negative shadow on a company that can only report smaller losses due to large budget cuts at the expense of hard-working men and women.