Breaking Down a Nuances of WWE Network’s $9.99 Price Tag | Bleacher Report
July 10, 2015 - WWE
This week, on Tuesday, Jul 7, a WWE Network launched in Italy.
For a monthly subscription cost of $9.99 (with a initial month giveaway for new subscribers), Italian fans have finally assimilated a “more than 175 countries” that are offering a WWE Network.
Since a entrance of a network, WWE has continued to pull a heading $9.99 cost point.
In Aug 2014, Vince McMahon tweeted a design of a new $9.99 dwindle drifting over WWE’s corporate domicile in Stamford, Connecticut. Announcers pushed a $9.99 WWE Network on television. Wrestlers brought adult a $9.99 in promos. A fusillade of online promotion touted a $9.99 cost indicate on websites opposite a world.
Still, it’s value observant that in some tools of a universe (Canada, a United Kingdom, Ireland and a Middle East), people compensate some-more than $10 any month to entrance a WWE Network. And soon, even some fans in a United States could find themselves profitable more.
Rogers Communications and WWE signed a 10-year agreement in Jul 2014 that awarded Rogers a disdainful placement rights for a WWE Network in Canada. Rogers given has announced carriage agreements with a series of other vital Canadian telecommunications companies (including Shaw and Telus).
While Canadian subscribers can entrance a VOD calm online, a linear tide of a WWE Network (including a live broadcasts of a pay-per-view events) is distributed as a normal wire TV channel in Canada. The cost of a WWE Network in Canada? Almost 20 percent aloft than a OTT service: $11.99 per month.
A similar arrangement exists in a Middle East and North Africa, where a WWE Network became accessible in 2015 by a compensate TV network OSN.
In a matter given to Bleacher Report by WWE, a association remarkable a cost disproportion is since “distributors set a cost point.”
Last month, during a WWE display during a Bernstein Global Future of Media and Telecom Summit, an assembly member inquired because WWE chose a $9.99 cost indicate for a WWE Network.
WWE’s Chief Strategy and Financial Officer George Barrios explained that care arrived during a cost operation after “a lot of tedious analytic work” and “conjoin analysis.” Barrios explained that WWE felt that “the sub-$10 cost indicate was usually a absolute selling message—a extensive volume of value.”
Looking back, WWE papers from 2013 remarkable that a association was evaluating “multiple approaches” for a intensity WWE Network. This enclosed a probability of:
• Licensing calm to determined radio networks
• Launching a WWE network “channel” by normal cable, satellite and telco distribution
• Adopting an choice digital “over-the-top” approach
Ultimately, it was this third choice (OTT) that became a basement for a WWE Network in a United States and what is being offering in many countries around a universe (notably, a WWE Network is still not available in Germany, Japan, India, China, Thailand and Malaysia).
In that February 2013 document, a due cost for a WWE Network was between $12.99-$14.99. At that cost point, a use was illusory as including all pay-per-view events solely WrestleMania.
However, when a WWE announced a U.S. launch of a WWE Network in Jan 2014, a monthly cost of a use forsaken to a now-iconic $9.99 per month (with a six-month commitment). Furthermore, WrestleMania was now enclosed in a package.
Later, when a WWE Network stretched to “more than 170 countries and territories” on Aug 12, 2014, WWE motionless to use a $9.99 cost as a tellurian benchmark for a OTT service. As CFO Barrios discussed during an Aug 2014 “fireside chat” during a Needham Company conference, WWE was posterior a singular cost indicate so it could precedence tellurian promotion for a WWE Network.
At that time, Barrios remarkable that Netflix worked on a “same number, opposite currency” indication (such as $8 USD and €8) though WWE was formulation on carrying a singular OTT cost indicate for all countries. Plans change.
In 2015, when a WWE Network finally came to a United Kingdom and Ireland (after a well-documented series of delays), a price was announced during “£9.99 in a U.K. and €12.99 in Ireland with no commitment.”
So most for environment a same cost worldwide. Instead, U.K. fans were going to compensate some-more than a 40 percent reward compared to a U.S. OTT price.
WWE expelled this matter to Bleacher Report:
WWE Network is accessible in some-more than 175 countries and costs $9.99 US dollars with a few exceptions that embody partnerships with Rogers in Canada and OSN in a Middle East where a distributors set a cost point. Additionally, WWE Network’s cost indicate in a UK and Ireland is formed on a accumulation of factors, including consumer investigate and a examination of a internal direct-to-consumer landscape, all while ensuring we broach an unusual value tender to a fans.
A pivotal component in a U.K. cost boost is what WWE calls a “local direct-to-consumer landscape.” For instance, Sky Sports Office still offers WWE pay-per-view events during £19.95 in a United Kingdom and €24.95 in Ireland.
When a WWE Network creatively launched usually in a United States, many general fans paid additional for location-hiding practical private network (VPN) and ”smart DNS” services so they could entrance a service. (This has prolonged been an emanate for Netflix. In April, Netflix updated a service’s terms and conditions to yield a choice of terminating business who are regulating such means to equivocate their calm geo-restrictions.)
Certainly a vast series of general subscribers masquerading as U.S. subscribers would assistance explain a vast disproportion between a WWE Network domestic/global subscription separate as compared to a ancestral North American/international pay-per-view division.
With a United Kingdom representing a largest general marketplace for WWE, it creates clarity that WWE motionless to adopt aloft pricing in a grown nation that has shown a eagerness to compensate some-more to entrance a use historically.
Chicago’s Cloud Tax
Even in a United States, a WWE’s $9.99 cost tab is in jeopardy.
Chicago’s Finance Department recently announced that starting Jul 1 (and with enforcement beginning Sep 1), a city’s entertainment taxation would be amended to embody streaming services. Chicago skeleton to collect 9 percent monthly from companies such as Netflix and Spotify in what has been called a “Chicago 9% Cloud Tax.” Importantly, a WWE Network as a streaming subscription use would seem to tumble underneath this new interpretation of a entertainment tax.
When asked for this article, WWE expelled this matter about a new taxes in Chicago: “We will approve with all germane state and internal taxation laws, and any applicable taxes are automatically combined to WWE Network’s $9.99 monthly subscription cost by a remuneration system. We ceaselessly refurbish a systems to accommodate any changes in taxation law.”
Netflix has already announced they devise to pass a 9 percent taxation onto a finish users.
WWE’s matter suggests that Chicago fans might shortly design to compensate roughly $1 some-more for their monthly subscription.
With WWE concerned to infer a profitability and viability of a WWE Network, it stays different how prolonged a use will sojourn bound during $9.99 per month.
Expanding into new markets and fad over WrestleMania 31 propelled a WWE Network to over 1.3 million subscribers by a finish of March.
However, WWE reported that a OIBDA (essentially profit) on a WWE Network shred (which includes WWE Network, PPV and VOD) was a negative $1.5 million for a initial entertain of 2015. That’s a sheer comparison to progressing years when WWE would post a healthy distinction from WrestleMania’s pay-per-view revenue.
WWE may eventually confirm that a association needs to possibly lift prices or lapse certain marquee events, namely WrestleMania, to normal pay-per-view.
Perhaps WWE will be holding down that $9.99 dwindle earlier rather than later.