Can WWE Network Succeed? A Quick Look at the Numbers

By AmplifiedtoRock 
*Note: I invite anyone who reads this to PLEASE question my math & improve on it where applicable.*

When I first heard several months ago that WWE were thinking of making their long delayed WWE Network an a la carte premium channel, my immediate reaction was that Vince was out of his mind. Then I heard they would likely include every pay per view event of the year, other than WrestleMania, as part of the network’s programming. This instantly made the concept of the WWE Network a much more appealing proposition, especially given that WWE generally runs one pay per view event a month. Now, instead of having to fork over $44.95 (or more) each month to watch a pay per view, WWE fans would have the option to pay less than half of that for the pay per views PLUS a full slate of other programming. This would clearly make an attractive product for the WWE Universe.
This was confirmed today when WWE issued a press release stating they plan on eventually launching the channel as rumored at the low rate of between $12.99-$14.99 per month. The problem I had was figuring out how this premium channel could prove to be financially viable for the company. Assuming WWE Network is available on most major cable or satellite systems (and this is a HUGE assumption as DirecTV is currently the only television provider to have publicly acknowledged interest), WWE would stand to lose millions of dollars in revenue on most of their pay per view events. 

However, after doing some math based on approximate domestic buyrates for WWE’s 2012 PPVs, it appears as though WWE might just be on course to make a great deal of money with their newest television venture. 

Using numbers arrived at by Dave Meltzer of WrestlingOberserver.com, WWE has averaged 152,350 domestic buys per non-WrestleMania pay per view from 2007-2012. This represents approximately $6,855,750 in raw revenue generated per PPV. Extrapolated over eleven pay per view events (WWE has 12 PPVs scheduled for 2013), the number comes to approximately $74,413,250 per year in non-WrestleMania PPV revenue. 

I have left WrestleMania out of these figures as it sells for a slightly higher price ($54.95 as opposed to the standard $44.95), and usually generates a domestic buyrate of at least double the yearly average. In 2012, WrestleMania 28 generated a whopping 733,000 domestic buys, nearly five times more than the average buyrate for the remainder of WWE’s PPVs that year. Working in the same time period of 2007-2012 and using Meltzer’s numbers, WrestleMania has averaged 662,500 buys per year. Using the current price tag, that is an estimated $36,437,500 per year in revenue. 

For the purposes of this analysis, this brings WWE’s average total pay per view revenue over the last six years to $110,850,750 per year. 

According to WWE’s press release today, they anticipate WWE Network would require one million subscribers to break even. I think this number may be a bit high. Starting at the lowest potential rate of $12.99 per month and assuming only 500,000 subscribers, the company stands to earn $78,000,000 per year from WWE Network alone. Combine that with our average WrestleMania figure and the company will have earned approximately $114,437,500 between Network subscriptions and a la carte WrestleMania buys in the United States alone. This number also does not take into consideration a la carte buys for non-WrestleMania pay per views, which will still be available to all non-Network subscribers. 

When one looks at that math, it’s easy to see why the company believes WWE Network can prove to be a game changer. Of course, there are still a few “x-factors.” One is whether or not WWE can strike a deal with the necessary television providers to ensure their new product is in enough homes to make their long-term goal of two-four million subscribers a feasible probability. Currently, WWE only seems to have interest from DirecTV. According to their corporate website, DirecTV has 20.08 million customers in the United States. If they are the only provider carrying the Network, WWE would be depending on roughly 20% of DirecTV’s customers subscribing to reach their break-even point. This seems highly unlikely. WWE would surely need to land contracts with at least two more of the country’s “Big Four” television providers (Comcast ~22M, DISH ~14M and Time Warner ~12M*) to have a realistic chance of reaching the number of subscribers they desire. 

Another unknown is just how many fans the WWE has. In today’s press release the company claimed to have “a projected base of approximately 47 million WWE digital TV households in the US (including lapsed fans).” Surely the company did their homework and spent plenty of time studying trends, but that number seems a bit high to me. 

Even if the figure of 47 million is accurate, the single biggest “x-factor” of them all is whether or not the WWE Universe will be willing to fork out the extra 13-15 bucks a month for more wrestling content. How many of those 47 million households are home to WWE fans who watch WWE programming religiously, but do not control the cable bill? How many of those 47 million households will simply not be able to afford the extra $156-$180 per year for a channel consisting entirely of sports entertainment? How many WWE fans in those 47 million households are devoted enough to the product to pay a premium for more than the 6.5 hours of television the company is already basically giving them for free? Will the WWE Universe see the value in the product? 

These are the big questions. WWE even went so far as to acknowledge in their press release that there is no guarantee their massive fan base will translate into a proportionate number of subscribers. Still, it’s early in the game. WWE are clearly deeply invested in the Network and are willing to do whatever is necessary to make it a success. With no official launch date set, the company has plenty of time to continue analyzing the numbers and formulating the best product possible. In the meantime, all we can do is sit back and hope the company can figure out a way to get this thing over. 

*Source: http://www.ncta.com/Stats/TopMSOs.aspx

NBA Boring Time

By Aaron the Brain

Now that the joke that was All-Star Weekend is behind us, the NBA hits its stretch run towards the post-season. In sports like baseball, football, and hockey, the stretch run is exciting because as teams vie to make the playoffs, fans know that any team that gets into the postseason tournament has a viable shot at winning a championship. That is not the case in the NBA, where typically there are only 5-8 teams, of the 16 that make it, that have a realistic shot at winning it all. In some years, it doesn't even seem like there are that many. This year may be one of those, as it seems there is a clear drop off after the top 4 teams in the league. Still, I'll give you a run down of the teams I believe to be contenders, pretenders, and dark horses as the NBA's month and a half stretch run towards their two month postseason begins.

CONTENDERS

Miami (40-14) - The Heat coasted through the first third or so of the season, with an apparent championship hangover. That hangover is behind them. They have won 11 in a row, including a stretch over the last 5 in which they won 4 in a row on the road, 3 against teams that will make the playoffs, and last night's win gave Miami their 4th victory in 5 nights. LeBron James is having arguably the greatest season in the NBA's modern era. Dwyane Wade, despite the notion that he's on the decline, appears to be fully healthy for the first time in a year and a half, and is still arguably a top-5 player in the league. Chris Bosh, who often gets overshadowed by his higher profile teammates, is the best PF/C in the Eastern Conference, and his having the best shooting year of his career. Add in the fact that Miami's defense (11th in defensive efficiency) and rebounding (19th in rebound rate) have been steadily improving, and Miami's 3 biggest role-players (Ray Allen, Shane Battier, and Mario Chalmers) are all shooting over 41% from beyond the arc, and Miami is looking better than they did last year when they won it all.

San Antonio (45-13) - The Spurs are the model of consistency. Regardless of the age, and declining play, of Tim Duncan and Manu Ginobli, the Spurs keep managing to stay elite because of the outstanding play of Tony Parker, and the infusion of young talent that they have groomed over the past 2-3 seasons. This could be just another Spurs team that plays great in the regular season before falling to a lower seeded team in the playoffs, as they have done each of the last two years. However, this team intrigues me because while they changed their style prior to the 2010-2011 season to be more offensive oriented, their 98.1 points given up per possession this season (3rd best in the league) is the best they have been defensively since 2007-08.

Oklahoma City (41-15) - There's no doubt that OKC is an elite team. Even after trading James Harden prior to the season, they still have the best average point differential in the league (+9.1) as well as the best efficiency differential (+10.5). Still, when I watch them I don't come away overly impressed. Despite their excellent offensive efficiency numbers, they still don't seem to run much of a half court offense. Instead, they rely almost entirely on three things - fast break points, Westbrook or Durant in isolation, or Westbrook or Durant getting to the free throw line. Sure, they do these things well. Westbrook has arguably the quickest first step in the league, and often breaks down defenses with his dribble penetration. Durant is the second best player, and arguably the best scorer, in the league, and both do a tremendous job of attacking the basket, getting foul calls, and hitting their free throws when they get there. I just question whether they can beat teams like the Clippers, Spurs, and Heat, who not only have the offense to keep up with them, but also play great defense.

LA Clippers (40-18) - The Clips went through a rough stretch when Chris Paul was out with an injury from the end of January through early February. They lost 6 of 9 without him in that stretch, and got demolished in Miami in his first game back from injury, when he managed just 3 points and 2 assists in 20 minutes. Since then however, they seem to have found their way again. They have now won 6 of their last 7, all by double digits, since losing to Miami. What may be troubling for Clippers' fans, though, is that their lone loss in that stretch was a 26-point home loss to the Spurs last Thursday, the same team that swept them out of the playoffs last season. The Clippers did beat the Spurs in their first two matchups this season, but they were both back in November, so it remains to be seen if the Spurs just have their number. The Clippers have also lost both of their matchups with OKC this season.

PRETENDERS

Indiana (35-21) - The Pacers are an intriguing team because aside from being the best defensive team in the league, and leading the league in rebounding rate, they have played all season without Danny Granger, whom most regarded as their best player coming into the season and just returned on Saturday. Personally, I'm not a fan of Granger. His FG% has dropped every year since he's been in the league (with the exception of shooting 44.6% '07-'08 and 44.7% in '08-'09), and he doesn't really create for anyone else on the team. However, I won't argue that he's a huge upgrade offensively over Lance Stephenson, and with Paul George taking over as the team's top option, he could be more efficient once he rounds into shape. Furthermore, because of the way the Pacers' size, and the way they defend and rebound, they are exactly the kind of team that can give the Heat trouble in the East. Still, I find it hard to buy into a team whose best four players are Paul George, Danny Granger, David West, and Roy Hibbert, and who don't have a particularly good bench, especially when they got beat in 6 to a Miami team without Chris Bosh last season.

New York (33-20) - If it weren't for an 18-5 start, and a pair of early season blowouts over the Heat, I probably wouldn't even mention the Knicks in this article. The truth is that the Knicks aren't even really close to any of the contenders, and it has shown in their 15-15 record over their last 30 games. The Knicks can score in bunches, because they shoot a lot of 3's, and when they are hot they can beat anyone, but they are only average defensively and are only an average rebounding team, and despite their excellent offensive efficiency rating, they have one of the lowest assist ratios in the league, because they, similar to OKC, rely on a lot of isolation in their halfcourt offense. Unfortunately for the Knicks, Melo isn't as good as Durant, and neither Raymond Felton nor JR Smith is even close to Russell Westbrook. This is a recipe for losing in the playoffs when they face better defenses.

Memphis (37-18) - Many thought that Memphis would fall off severely after trading Rudy Gay to Toronto. They did struggle initially after the trade, but they have now won 7 in a row, albeit against a bit of a soft schedule. They probably aren't quite as equipped to make a deep run this year without Gay, but they still are an elite defensive team that can pound teams on the boards with their size. Still, while they can pose matchup problems to the top 3 teams in the West, they simply do not have the scoring punch to keep up with San Antonio, OKC, and the Clippers, who are all also top-10 defensive teams.

DARK HORSES

Chicago (32-24) - Don't forget that the Bulls had the best record in the East the past two seasons, and they are still one of the best defensive teams in the league, and they can rebound with anyone. If Derrick Rose comes back, and is "110%" they are a real threat to the Heat. They would essentially be a better version of the Pacers. The Heat would still be better, but the Bulls pose the size and physicality that gives Miami trouble, and Rose not only can create his own shot, but makes players like Luol Deng, Joakim Noah, and Carlos Boozer more efficient as well.


LA Lakers (28-29) - If the season ended today, the Lakers wouldn't even make the playoffs. Truth be told, they probably are more likely to miss the playoffs than make them at this point. So I'm sure it seems crazy to have them listed as a darkhorse, which I consider a team that could potentially be a title contender. It may be that I am grasping at straws in order to defend my preseason pick to win the West, but it looks like the Lakers have finally begun to figure things out. After all of the injuries, coaching changes, bickering to the media, and other drama that resulted in a 17-25 start, the Lakers have now won 11 of their last 15 games and with Dwight Howard apparently back in shape, it wouldn't surprise me if the Lakers caught either Utah or Golden State to sneak into the playoffs. Granted, to get there, LA will likely have to win 18-20 of their final 27 games, but if they get there, nobody will want to face them.

WrestleMania Build-Up Divides the Universe

By AmplifiedtoRock

As the behemoth tumbled from the precipice, the momentum of his massive frame expelling him, a divisive chain of events was set in motion.  It was proceeded by an unholy cacophony of noise from witnesses of all ages, colors, and creeds.  Some roared their approval whilst others rained down the sort of hatred and vitriol one might expect to find only behind the shroud of anonymity provided by the internet.  The victor stood tall, hands in the air, taking it all in and savoring every last bit of it.   John Cena was on his way back to the pinnacle of the sports entertainment mountain.  He was on his way back to the WWE Championship.

Cena’s triumph in the Royal Rumble led naturally to what a great number of well-read wrestling fans suspected might occur:  The Rock, returning to the WWE ring after months away starring in Hollywood films, defeated the longstanding defending champion, CM Punk.  If the WWE creative team stays the course, one would expect The Rock to successfully defend his title against Punk at the Elimination Chamber pay per view.  Then the stage would be set for a rematch with Cena, who declared on Monday Night Raw the night following the Rumble his intention to challenge the WWE champion in the main event at WrestleMania.

As this series of events has unfolded, and likely continues to unfold, the division within the ranks of what has come to be known as the WWE Universe is widening.  

On one hand you have the fans I will refer to as the “marks.”  These are the wrestling fans for whom the only wrestling that exists is that which appears on weekly television:  WWE and TNA.  For many of the marks, the latter is not something that is viewed with any consistency and, in some cases, neither is the former.  They tend to love the babyfaces and despise the heels, their loyalties lying wherever the storyline dictates.  They are vociferous in their love and support for the wrestlers they like and are not shay about booing or jeering those they dislike.  In regards to the road to WrestleMania XXIX, they are longing for the day their beloved John Cena once again raises the WWE championship belt above his head in time to a crescendo in his theme music.

On the other hand you have the fans I refer to as the “smart marks.”  These are your rabid wrestling fans, the ones who scour the internet to follow small independent wrestling promotions.  They attend their local wrestling shows, they read wrestling blogs and listen to wrestling podcasts and their subjectivity defines who their favorite wrestlers are.  They base their judgments on not only a wrestler’s physical abilities, but their ability to cut a promo.  The smart marks tend to be just as passionate and vocal in their support of their favorite wrestlers, but they also have a tendency to be equally as vocal when something displeases them.

Of course, the division goes deeper than that.  The WWE has developed a habit in recent years of shoving certain wrestlers down the throat of its audience, in some cases pushing them harder the more resistance they encounter.  John Cena is the poster child of this marketing tactic.  After winning the WWE Championship for the first time in 2005, Cena began a push that would eventually make him the face of the company.  During his rise Cena had fueds with HHH, Edge and Rob Van Dam which made clear the divide Cena created within the company’s fanbase.  In October 2007, he suffered a torn pectoral muscle which was originally thought to have put him out of action for seven months to a year.  To a large percentage of the WWE Universe, Cena’s absence was going to be an opportunity for some under-appreciated members of the roster to seize the vacated spotlight.  Instead, he made a surprise return as the final entrant in the 2008 Royal Rumble, eliminating HHH and earning a championship match.  Though he did not immediately regain the title, his quick return to the main event fold provided his detractors with fuel for a fire that had already been burning hotter than the flames of hell.

CM Punk has driven a wedge between factions of the WWE Universe as well.  His no-nonsense approach to wrestling and his self-righteous attitude combined with his “pipe bomb” promos, have made him an internet darling to many smart-marks who followed from his humble beginnings as and independent wrestling superstar whilst alienating the young marks who dislike the way he picks apart their heroes.   He routinely breaks “kayfabe,” the fictive story-driven world the WWE writers create, and focuses his verbal attacks on his opponents, oftentimes with pinpoint accuracy.

This has been exactly the case in his criticism of The Rock.  Dwayne “The Rock” Johnson was one of the icons of WWE’s “Attitude Era” of the late 90’s and early 2000’s, during which time the company’s content shifted away from family friendly entertainment and into a much edgier realm.  His fueds with Mick Foley and “Stone Cold” Steve Austin are legendary in wrestling circles and he was beloved by many wrestling fans before leaving the company to pursue a career as an actor in Hollywood, during which time he actively distanced himself from the wrestling industry.  Though this left a bitter taste in the mouths of many fans, it did not sour his much heralded return to the WWE on Monday Night Raw on Valentine’s Day of 2011.  On the show he declared he was never leaving the WWE Universe again, a claim he has technically backed up despite month-long sebbaticals to continue his film career.  Still, CM Punk and a number of wrestling fans hold a grudge against him, considering him a “part-timer,” and resenting the fact that the company would put the title belt on a man who wasn’t going to work the grind of the full WWE schedule.  Of course, many still love him.  His talents on the microphone are unequalled by any member of the current roster, the silver-tongued CM Punk included.  His title reign also presents an opportunity for the WWE to gain a level of positive publicity that no other superstar could possbily deliver.  During press tours for all of his films scheduled for release between now and WrestleMania, he’ll almost certainly be trotting out the WWE Championship and answering questions about his big rematch with John Cena, potentially attracting an enormous number of viewers who would never normally watch professional wrestling.

It is the intensity of emotion on both sides and the very polarizing figures of John Cena, CM Punk and The Rock which make the current path of the WWE storyline so compelling.  The marks are incredibly excited, watching eagerly as Cena inches his way back to the title.  The smart marks are despondent, angrily bemoaning WWE creative for giving them something they’ve already seen and allowing a part-timer like The Rock to hold the company’s most prestigious title.  Where the marks are watching to see their guys succeed, the smart marks are watching with the hope that WWE might give them a swerve and alter the storyline, pushing one of their under-appreciated heroes.  Then there are the curious outsiders, drawn in by the star power of the WWE Champion.

The bottom line is this:  they are watching.  All of them.  They are buying the pay per views, tuning into WWE television in remarkably large numbers and coming to the live events.  Regardless of their opinions on how WWE is building to WrestleMania, they are participating and that, no matter what side of the line they stand on, is good for business.