Breaking Down WWE’s Hard Sell of $9.99 Price Point for WWE Network
August 18, 2014 - WWE
On Aug 15, Vince McMahon denounced a new central WWE logo.
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It’s a informed design. Originally it was prominently featured at January’s CES Press Conference announcing a WWE Network. The trademark was designed for a company’s new over-the-top subscription service.
As Marc Graser of Variety noted, “WWE hadn’t primarily designed on carrying a WWE Network trademark paint a whole company”. However, according to Chief Brand Officer Stephanie McMahon, “it represented all we wanted to contend to a marketplace.”
A twitter from Vince McMahon enclosed a dwindle of a new trademark being lifted over WWE domicile in Stamford, Connecticut. There was a second dwindle on a pole. This dwindle advertised (what else?) a $9.99 cost for a WWE Network.
After this week’s central tellurian launch of a WWE Network in 170 countries and territories and a juggernaut SummerSlam attraction, WWE has been relentlessly shilling a $9.99 monthly cost for a WWE Network. They discuss it on Raw. They discuss it on SmackDown. Announcers joked about it during a SummerSlam broadcast.
Currently, a solitary outlier is Canada. In that country, Rogers Media wire subscribers can entrance the $11.99 per month “WWE Net Pak” use by their wire subscription. The “WWE Net Pak” subscription service is charity by Rogers Communications as partial of their recently announced landmark 10-year radio agreement with WWE. Presumably, a month-to-month cost for this use contributed to a preference to cost it above a $9.99 threshold.
Otherwise, in countries where a WWE has launched their over-the-top (OTT) service, a distinguished charity indicate has been a singular price-point for a six-month commitment.
Using a same cost worldwide is a confidant choice. It’s partial of a promotion plan that WWE Chief Strategy and Financial Officer George Barrios laid out during a Needham Company fireside chat on Aug 5. As we wrote in my recap of a webcast, Barrios remarkable that a WWE is “going to be regulating $9.99 everywhere” and that WWE was not “planning on charging some-more in other countries.”
A reason given for this proceed was charity during a Needham conference. Barrios pronounced that a WWE was going to buy a lot of “Search Engine Marketing” (SEM) and “Search Engine Optimization” (SEO) so a association could emanate “global awareness” for a WWE Network. Certainly regulating a singular cost indicate does yield for some-more cohesive promotions that won’t need to be customized by country.
On a flip-side, WWE is being sealed in to a $9.99 cost worldwide. Success requires WWE beget sufficient income to mangle even on a project. With a cost per subscriber being set during $9.99, a association usually has dual remaining levers. WWE possibly needs to attract adequate subscribers to mangle even on a plan or find a proceed to reduce a costs of using a network.
As a WWE expands a tellurian assembly means a entrance a OTT WWE Network, WWE is also stability to pursue cost-cutting initiatives such as shutting down a WWE Magazine division.
The some-more a association ingrains a $9.99 price-point, a harder it will be to pierce divided in a future.
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WWE is behaving a ethereal balancing act.
Interestingly, WWE did announce they were charity one choice WWE Network pricing tier.
There is now a singular month, no-commitment tier at $12.99 per month. Essentially, this is a new cost for WWE fans who usually wish to sequence a specific live pay-per-view (or usually wish one month’s entrance to a WWE Network library).
Remarkably, a no-commitment tier is a 35 percent cost dump from a originally announced price of $19.99. As WWE remarkable in last Tuesday’s press release, this cost change “better reflects a accumulation of economies that exist internationally.
Dropping a cost of a no-commitment tier before it was even launched was a surprisingly discerning about-face for a company. It’s transparent that a association is concerned to grow their WWE Network subscriber rolls quickly, and a new lowered cost is their try to captivate in some fans who might be heedful of signing adult for a six-month commitment. However, with usually a three-dollar disproportion between cost points, WWE might find that subscribers start usually cherry-picking a biggest events (Royal Rumble, WrestleMania, SummerSlam).
The fast and widespread roll-out of a WWE Network in August is approaching a greeting to final quarter’s explanation that 128,000 subscribers had already betimes finished their WWE Network subscriptions before a approaching six-month tenure due to reoccurring remuneration issues.
In WWE’s original WWE Network presentation from Jan of 2014, WWE laid out skeleton to launch a WWE Network internationally in usually a handful of countries (the UK, Canada, Australia, New Zealand, Singapore, Hong Kong and a Nordics) by “end of 2014/early 2015.” Instead, a WWE changed forward with what I termed “an desirous tellurian launch” on Aug 12.
Globally, a WWE Network is now available “in some-more than 170 countries and territories.” They sped adult a calendar and broadened a scope.
Yet, according to Reynard Odenheimer of PWInsider.com, there’s still many vast worldwide markets where a WWE Network is not nonetheless available. They include:
- Germany, Austria, Switzerland, Liechtenstein
- Italy, San Marino, Vatican City
- Egypt, Algeria, Morocco, Tunisia
- India, Pakistan, Bangladesh, Afghanistan, Nepal, Sri Lanka, Bhutan, Maldives
- Iraq, Saudi Arabia, Yemen, Jordan, Lebanon, United Arab Emirates, Palestine, Oman, Kuwait, Qatar, Bahrain
- Philippines, Thailand, Malaysia
- United Kingdom, Ireland, Jersey, Island of Man, Guernsey and Alderney
We do know that a subsequent large marketplace announced to accept a WWE Network will be a United Kingdom group. WWE has promised that a WWE Network will be accessible in those countries by Oct of 2014.
Analyzing a list of countries where a WWE Network is not nonetheless accessible reveals that many of these countries have recently negotiated calm deals. Most of these deals have been announced in a past year.
This would include Thailand (CTH, Jan 2014), United Kingdom (BSkyB, Jan 2014), Germany (ProSiebenSat.1, Mar 2014) and Middle East and North Africa (OSN, Jul 2014). In addition, it’s also probable that progressing deals such as Japan’s five-year agreement (J SPORTS Broadcasting Corporation, February 2011) are inspiring a ability to launch a WWE Network in that country.
WWE has still not nonetheless announced their new TV rights understanding for India. It’s something that investors have brought adult several times. Most recently WWE was asked about it during the second-quarter discussion call. CFO George Barrios pronounced a WWE was “still operative by a understanding with a partner.”
Right now, it seems doubtful WWE will announce their plan for distributing a WWE Network in India until a radio understanding is sealed and announced. In fact, it’s utterly probable that releasing a WWE Network in many of these countries is directly connected with these new calm agreements.
The Rogers understanding in Canada proves that WWE isn’t simply holding a one-size-fits-all proceed when it comes to a WWE.
In a box of a United Kingdom, while WWE has announced a launch date (October 1), it has not nonetheless specified either or not UK fans will accept a over-the-top chronicle of a WWE Network service.
WhatCulture.com has speculated that WWE might indeed need a Sky Satellite TV subscription in sequence to entrance a WWE Network. Since WWE has sole their pay-per-view rebroadcast rights to Sky in a UK, this proceed would make sense. However, all of this is usually surmise that has yet to be reliable or denied by a WWE.
With some-more than 1.3 billion people vital in China and some-more than 1.2 billion people vital in India, WWE is really concerned to grow in these huge markets. Indeed, in WWE’s June 2014 financier presentation, a association records that their 4 pivotal markets embody a United States, a UK, China and India.
It’s really revelation that in WWE has not nonetheless rolled out a WWE Network in 3 of their pivotal markets. we wouldn’t systematise it as a miss of seductiveness on WWE’s part. Instead, a check is some-more approaching a outcome of a formidable business calculus around a state of their radio rights and PPV rebroadcast agreements.
With a WWE Network, a WWE is holding a lot of income out of a pockets of companies that were going to discharge destiny WWE pay-per-views. Therefore, it’s really probable that they need to come to a new agreement, maybe with revenue-sharing elements, that will recompense these media partners.
Meanwhile, a initial large WWE Network renovation rush attack this week. It’s what I have termed a “ six-month renovation cliff.” Starting on Sunday, the initial collection of subscribers will see their initial six-month subscription joining expire. First-day adopters contingency confirm either or not to hang with a WWE Network use (only $9.99! $9.99! $9.99!) by Sunday, Aug 24.
Investors have asked WWE during their discussion calls to yield superintendence for what commission of their stream subscribers a association expects will replenish their six-month subscriptions. WWE has regularly declined to yield those inner estimations.
By rising a WWE Network globally this month, a association is approaching anticipating that intensity domestic use subscription declines will be equivalent with new general growth. Still, until a WWE explains what they’re doing in several of their biggest markets (such as a UK, Germany and India), it stays unusually formidable for anyone to envision year-end worldwide subscription numbers.
All we know so distant is that should a WWE Network be distributed as an over-the-top use in these new markets, a cost will be $9.99 fortuitous on a six-month commitment. And we can all design to hear that cost indicate ($9.99) beaten each singular Monday night for a foreseeable future.