WWE Network To Launch Online With Surprising New Business Model

WWE leads the charge in the wrestling and sports entertainment industry and has now announced its new 24/7 online network, which could radically change the pay-per-view business.

Jan 9, 2014 at 12:03PM

World Wrestling Entertainment (NYSE:WWE) yesterday announced its much anticipated network at the Consumer Electronics Show (CES) in Las Vegas, but with a few changes from the model it described when it started the process. Most notably, instead of a cable TV channel, the new WWE Network is online.

Subscription-based and running 24/7, the entirely online network will gather WWE's extensive wrestling back catalog, both original and acquired, stretching back more than 60 years. More important will be its ongoing original content produced weekly.

Priced at $9.99 a month with a six-month commitment, the WWE Network is a reasonable deal for the wealth of content that is aimed at WWE's established fan base. The WWE Network will launch online on Feb. 24.

"Today is a historic day for WWE as we transform and reimagine how we deliver our premium live content and 24/7 programming directly to our fans around the world," said CEO Vince McMahon at the press conference. "WWE Network will provide transformative growth for our company and unprecedented value for our fans."

The network will launch only in the United States, but is expected to expand in Canada, the U.K. late in 2014 or early 2015, followed by Australia and New Zealand. WWE draws particularly strong numbers for its TV shows in the U.K. and Ireland, airing on Sky Sports, and the company's two European live tours every year usually draw big business. Don't be surprise if WWE moves for a quicker international rollout, since many many speculate that the network will need about a million subscribers initially to break even.

TV viewers will still get their Smackdown

WWE won't be leaving behind traditional TV completely -- flagship weekly shows Raw and Smackdown will remain on cable TV. They currently air on USA and SyFy, respectively, and Raw pulls in an average audience of roughly 4 million, according to Nielsen. WWE also airs related shows on other channels, including the reality TV show, Total Divas, on the E Network.

Another substantial element of WWE's business is pay-per-view events. Its monthly PPV show has seen lower-than-expected buy rates in recent months, but that model is about to get knocked to the mat. The WWE Network will stream PPVs -- including April's Wrestlemania -- to subscribers, radically changing this part of its business.

If you were to buy every WWE PPV event, you're looking at a cost of at least $600 a year (prices generally run $50 to $60 per event, depending on your provider and if you opt for HD). At $9.99 a month for all of these events and a slew of other content, it seems like WWE is undervaluing its content. On the plus side for WWE, it largely solves its problem of pirates streaming PPV content illegally online.

Free to fee

As a possible precursor to its network, WWE has partnered with YouTube for years, providing new and archived content. WWE has been able to learn how people view the content online, but it could be a challenge to get viewers who are used to getting it for free to hand over their money. But at such a low cost, and with original content streaming every week, WWE is optimistic. And expect that free YouTube content to dry up over the coming months and migrate to the WWE Network.

As other sites -- from MLB.com to Hulu -- have proven that passionate viewers will happily pay for high-quality, exclusive content, WWE is hoping that its changing model will provide a more predictable and growing revenue source. And the PPV model could be shaken up a bit. It's exciting for wrestling fans but it will also be worth keeping an eye on this new business model going into the future and to see who will follow suit.

The next step

Want to figure out how to profit on business analysis like this? The key is to learn how to turn business insights into portfolio gold by taking your first steps as an investor. Those who wait on the sidelines are missing out on huge gains and putting their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal-finance experts show you what you need to get started, and even gives you access to some stocks to buy first. Click here to get your copy today -- it's absolutely free.

Fool contributor Jonathan Keane has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at www.fool.com/podcasts.

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to www.fool.com/podcasts, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.

 


Compare Brokers