Dave Meltzer of the Wrestling Observer Newsletter revealed the financial constraints that WWE is currently facing. Regarding The Network and profits compared to Pay-Per-Views, he said:
"It's not just PPV that was cannibalised by the Network. The profit is not actually close. The old method would make them $66M in profit, and this year the current value is a $27.5M, they project for it to end at $44M. (The profits) are about $93M down in over the last 3 years."
It must be noted that this is not a loss that WWE is facing, but simply reduced profit. What surprises a lot of people is the fact that the promotion gives away the Big Four Pay-Per-Views on the Network.
Many were under the assumption (before launch) that the B-PPVs (such as Extreme Rules, Battleground, Hell In A Cell, etc.) would be on the Network, while the big Four PPVs (Royal Rumble, Wrestlemania, Summerslam, & Survivor Series) would be on Pay-Per-View.
The UFC’s model goes as follows: The prelims are on “Fight Pass” (UFC’s Network online), the second set of fights are on Fox Sports 1, and the main card is put on Pay-Per-View. While not all Pay-Per-Views thrive in numbers, the big PPVs featuring stars such as Ronda Rousey and Conor McGregor consistently do over a million buys.
UFC currently thrives on the PPV model. However, there is likely a big difference for people when it comes to buying fights and buying a scripted show.
However, the fact of the matter is, WWE is in the Network for the long term. Right now, the subscription rate for the WWE Network is estimated to be nearly 2 million, out of which over 1.5 million are consistent paying subscribers. Moreover, $9.99 is an extremely good price for the amount of content given.
Dave Meltzer also noted that most people don’t use the Network to watch shows like “Swerved” or “Ride Along”, but rather for the PPVs offered and also shows such as WWE 24, Breaking Ground, Monday Night Wars, and a lot of the archives.
Regardless, WWE would definitely want to invest money into these shows to put on a wide variety, to lure more people to the Network. Right now for them, it is not about selling Pay-Per-Views anymore, but to sell subscriptions. It cannot be denied that the Network has managed to lure a lot of old fans back in.
However, WWE still needs to find its footing in expanding beyond its core base. Online networking is still the future, and WWE Network is still in its infancy, so there is a long way to go, and that is what the company will be looking forward to.
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