On January 8 2014, WWE personalities announced the launch of the WWE Network at the Consumer Electronics Show in Las Vegas. The announced launch date was February 24, and in the weeks leading to the launch date, the hype was, at times, overbearing. The commentary team’s every link to camera somehow turned into an infomercial for the upcoming Network launch. It was as nerve-grinding as the constant tutorials in downloading the WWE App (ten million downloads, don’t you know).
But there was a reason behind the constant reminders about the event on February 28. Having invested around $75 million just to launch the Network, a break-even figure of one million subscribers by year end seemed necessary to the executives of WWE.
In April, WWE announced that there were 667,287 subscribers within 42 days. This seemed a fantastic number, when you take into account the WWE has padded its Pay-Per-View numbers with International buys for years. However, those who know not a lot about wrestling fans thought differently.
Analysts suggested that as WWE hadn’t made one million subscribers before WrestleMania, then the Network was be a failure. This analysis led to the WWE stock to tumble by 63.1% over a number of weeks from a high of $31.98 to its current $11.74, which wiped $1.4 BILLION from WWE’s value. What the analysts didn’t mention was that the Network is only available in the United States for the time being, unless you are an international wrestling fan who knows the way round the block.
Considering that there are over 100,000 people who wake up/stay up to watch WWE Raw live in the UK (at 1am GMT), and the latest deal between WWE and Sky Sports has all 12 Pay-Per-Views on Sky Box Office (up from five in 2005), when the Network does launch, WWE will have a good high five/low six figure increase in subscribers just from the UK. Factor in the viewership in Canada, Australia, Nordic nations, New Zealand, Hong Kong and Singapore when the Network is released at the same time as the UK, then one million subscribers seems to be a worst case scenario.
WWE predicted that is they received two million subscribers, they would make a profit of $50 million in the first year, and an awful lot more profit for every year after.
Even if WWE doesn’t get the one million subscribers that they seem desperate to get, all is not lost.
Movie subscription giant Netflix took 6 years to turn a profit, and now 17 years after being founded, it posted profit of $112 million in 2013.
Analysts, and WWE management, want immediate success, and profit. They don’t see things in the long-term, just the short-term. Short-term, WWE will make a loss on the Network. Long-term, the WWE Network will be a huge money spinner, and may make WWE stock top the many year high on the New York Stock Exchange of $31.98, and make a lot of people a lot of money, and ultimately, make the WWE Network a massive success.
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