The new wrestling economy

[Mad Dog]

I'm wondering what non WWE companies are going to be able to draw revenue from in the future. DVD sales are pretty much going extinct, VOD is just now starting to prove someone viable after the initial debacles in that realm, and no one is getting any TV money worth a damn other than WWE. I know some groups have YouTube channels, but I've always been under the impression you don't make much money from that unless you have six digit subscriber levels.

 

I think Chikara kind of has the right idea with their VOD. Buy the whole event for one price or just grab a single match for $1.99. It's a very Itunes approach that I think some bigger companies should try out.

[jdw]

I think its a trend across all of entertainment due to all of our entertainment options. I'm sure Hollywood doesn't sell as many actual tickets as they once did, but they jack up prices with 3D and make a fortune. Jimmy Fallon does a fraction of the viewership that Leno was doing 15 years ago, but he's a big success and gets paid a ton. Baseball has never been less culturally relevant, but they're making more money than ever. Only the NFL is immune to it.

 

Baseball is a great analogy. They've targeted high rollers and corporate sales for tickets, as has the NBA. Both have priced the old middle/lower incomes that could go to a good number of games a year with a slew of kids. They've also targeted sports channels for income, though less people watch and listen to a team like say the Dodgers than did in the 70s and 80s.

 

On some level it's "smart". There are arguments for the question of whether it's sustainable in the sense of creating new fans / the next generation of fans. But those arguments have been going on for a decade or two already.

[Sean Liska]

Are there comparisons to 90s NJPW being much more niche culturally than early 80s NJPW but having even bigger major shows?

[Slasher]

A big part of it I think is that the home theater experience has gotten a lot better in recent years that it no longer makes sense to go to the average game or the average show when you get to eat all you want for cheaper, you have a "front row" seat to the action, and if inclined, you can share the experiences with buddies that are in the same financial situation as you are. You avoid dealing with drunk fans who accidentally spill beer on your back or an unruly dissenter troll fan or whatever. In turn, the big games...the big events...they become something of a deal for people to go. You save money from the ordinary games that you can spend on the playoff game or the championship games or in wrestling's case...Mania or Summerslam. So those events become more attainable and you see more of the hardcore fans who can finally afford to go to those things. It becomes more of a legitimate celebration of that fandom.

[funkdoc]

 

I also think it's partly wrestling becoming part of nerd culture and more hardcore Internet fans being created. How many members does Wreddit have now? I went to an NXT show in Columbus and couldn't believe how many 20-something urban hipster types were there, it was a very different kind of crowd, and those people are more apt to travel. Rumble, Mania, and SummerSlam have become conventions of these hardcore fans. But even Raw crowds in big city have gotten more and more smarky and rebellious.

 

I think this is on point. The modern adult fanbase has a LOT of crossover with fans of comic book franchises and shows like Dr. Who. The entirety of 'nerd culture' is predicated on defining your identity through the media you consume, so it makes sense that such a fanbase would be more inclined to drop large sums of money on the product.

 

As an aside, this kind of fanbase (and the shift of mainstream culture towards this kind of thing in general) is why WWE should be pushing guys in the Daniel Bryan/Sami Zayn/Bayley mold HARD. But they're out of touch so instead they still see Roman Reigns as the next big thing.

 

 

bingo bango bongo!!!!

 

this actually reminds me of cody rhodes's blog post after dusty died - at one point he made an offhand comment about the fans wanting to cheer for a seth rogen rather than a clark gable. i assume he was referring to bryan with that one, but it's an interesting general point that p. much echoes this.

 

this also takes me back to an onion AV club comment that i've posted about on here before, talking about why ~hipsters~ weren't watching wrestling. that was in the CENAWINSLOL days before NXT existed i think, and we can clearly see how changes in recent years have started bringing in a different fanbase...but we still have a lot of the general malaise limiting potential growth atm.

[pol]

I think such a demographic are far more inclined to be hypercritical of the product while continuing to follow it, too. You see the same thing in pretty much every fandom. There's still hardcore Simpsons fan forums where people watch every new episode live while saying the show hasn't been good in 15 years.

[Matt D]

Considering how quickly the big NXT events at Full Sail sell out, have they jacked up the prices for them?

[broccoman]

There's huge danger with this approach. While you do squeeze more and more money out of fans, you end up alienating non-fans, and you need non-fans to become fans sooner or later.

 

The closest comparison I can think of is anime in Japan. They chose to cater their market more towards their hardcore fans, and it really did hurt overall business, and then it impacted the product itself by making it more about things the hardcore wanted (moe)

 

Preaching to the choir is great to get through the bad times, but it can only work for so long. Eventually they will have to expand back to the mainstream with an Austin/Hogan-type, or the hardcore market is going to keep shrinking and shrinking gradually until it becomes unsustainable.

[Loss]

WWE should do referral discounts for the Network as a small step in safeguarding that.

[Mad Dog]

There's huge danger with this approach. While you do squeeze more and more money out of fans, you end up alienating non-fans, and you need non-fans to become fans sooner or later.

 

The closest comparison I can think of is anime in Japan. They chose to cater their market more towards their hardcore fans, and it really did hurt overall business, and then it impacted the product itself by making it more about things the hardcore wanted (moe)

 

Preaching to the choir is great to get through the bad times, but it can only work for so long. Eventually they will have to expand back to the mainstream with an Austin/Hogan-type, or the hardcore market is going to keep shrinking and shrinking gradually until it becomes unsustainable.

The comic book industry is a lot like that now. They've learned how to gouge the market with higher prices and alternate covers for books but the market continues to shrink. An issue of a mid level title sold about 50-60k issues a decade ago and a mid level book is like 35-45k these days.

[Loss]

What WWE has as an ace in the hole is that they take their show on the road. If they are promoting themselves well in each market, which they usually do, that's probably their best chance of attracting new fans. I like the idea of making some type of premium WWE Universe membership that includes the Network, discounts to live events (with a refer-a-friend incentive included), exclusive merchandise and so on. If you get the hardcore fanbase really excited about WWE, they will tell people about it. That's the one advantage of catering to them. If we get to a point where WWE simply doesn't have enough hardcore fans to sustain the company, I think they could place a renewed interest on live events by doing more big angles and title changes on the road, shooting on-location angles during promotional events like autograph signings and showing highlights the following week on television. They could also throw up the complete versions on the WWE Network immediately or even after the highlights are shown on TV to lure people in.

 

I think we're nearing the time where it's time to re-think the idea that everything needs to be live. I am not saying RAW should be taped or anything like that, and I realize that a huge part of WWE's appeal to television networks is that they are live. But the priorities of the three-hour infomercial might need to be shifted to include more recaps of house shows. And I do think within the next decade, we are going to see either a collapse of television as we know it or a dramatically different model. There are hints of it already. When that TV rights revenue starts drying up, WWE is in trouble unless the Network is on fire.

[Parties]

I would even extend that into different platform packages within the Network itself. "For 14.99 a month, we'll give you a feed of Territories TV that we're hiding behind a Firewall." "For $17.99, you get it all, plus we'll turn on a single cam at our house shows and let you watch 1-2 of them a week, with or without commentary". Part of tapping into your hardcore audience is understanding that you have a lot of cafeteria viewers who are interested in different things, but that many of them will pay more to get more. As of now the Network has been good if somewhat underwhelming because 90% feels like the same old/same old. The 7/4 show from Japan was exactly what I want not only the company to be, but the Network in particular.

 

I'm a lapsed customer who cancelled my membership because I didn't have time to watch it very often and really only made time for the PPVs. Even as someone who says "I never have time to watch this thing," I would happily re-up and pay a premium rate if there was more novelty/experimentation/variety in the content.

[Laz]

There's really no reason to not be taping and running the occasional angle or title change on house shows. If a rinky dink bingo hall could do it 20 years ago in the event that something worthwhile might happen then the biggest company in the history of the business can.

[Slasher]

There's really no reason to not be taping and running the occasional angle or title change on house shows. If a rinky dink bingo hall could do it 20 years ago in the event that something worthwhile might happen then the biggest company in the history of the business can.

One possible issue is what makes one house show more valuable than another that it is where an angle or title change occurs? Part of the whole WWE experience is being given an equal opportunity to see those things go down along with everyone else. I do know the positive is it would increase the buzz theoretically where people tuned in Raw to see what the hell is going on after reading about it online and it could create an uptick in movement where there is a bigger sense of urgency to catch the show in your area but it is a tough call to unite people with the WWE Universe tagline and then only 750 in some backwater town in Iowa got to see Rollins lose the WWE title to Too Cold Scorpio. Saying it worked in 1995 doesn't mean anything now. As the business model and the presentation model adapts to the changes in the world, so should expectations.

[Hobbes]

I don't know if WWE's hardcore fans are willing to spend more money than ever, as much as a lot of former WWE fans have gone from watching weekly and spending a little money monthly, to picking and choosing two to four big events and spending whatever it costs to attend/watch them. There are a lot of former fans who will watch WrestleMania and maybe Rumble and one or two other big shows, and they'll maybe buy a ticket when WWE runs in their area, but that's it. WWE has failed to create a full time main event draw since John Cena, and so more and more fans are no longer following the product as an on going hobby. It's just a fun event you'll see once in awhile and then immediately forget about.

 

Casual fans are fickle and hard to hold on to, but I don't know if this "We have fewer fans but we can milk them for more money" mindset is anything but a slow moving train to obsolescence. It's also not something that will appeal to their TV partners, and that is a major revenue stream for the company. I know in terms of the rankings, Raw still is at or near the top of the cable ratings, but in terms of pure viewers they've lost a sizable percentage of their TV audience in three or four years. Part of that is probably cord cutting, but we live in a world where sports organizations are getting record TV deals because they're seen as the only properties left that are "DVR proof". I would've thought WWE would've had similar properties, and judging from the rumors about WWE's contract renewal expectations before they re-uped with USA, they thought so too. We were wrong.

[pol]

I'm not the most informed on this, but the trend over the past few years seems to show them losing TV viewership at a rate far greater than the average drop in viewership across all TV (the Alvarez talking point is 25% over 3 years, but I don't know how accurate that is). That's a trend they really need to reverse; as others have said, milking their hardcore audience for more money is a band aid solution. It's kind of scary to think about where they could be in a few years if the decline continues at its current rate.

[Loss]

 

There's really no reason to not be taping and running the occasional angle or title change on house shows. If a rinky dink bingo hall could do it 20 years ago in the event that something worthwhile might happen then the biggest company in the history of the business can.

One possible issue is what makes one house show more valuable than another that it is where an angle or title change occurs? Part of the whole WWE experience is being given an equal opportunity to see those things go down along with everyone else. I do know the positive is it would increase the buzz theoretically where people tuned in Raw to see what the hell is going on after reading about it online and it could create an uptick in movement where there is a bigger sense of urgency to catch the show in your area but it is a tough call to unite people with the WWE Universe tagline and then only 750 in some backwater town in Iowa got to see Rollins lose the WWE title to Too Cold Scorpio. Saying it worked in 1995 doesn't mean anything now. As the business model and the presentation model adapts to the changes in the world, so should expectations.

 

 

It's an experiment worth trying. The sky won't fall, but it will either positively affect house show business or it won't. They're at a point where it wouldn't be the worst idea to start throwing some out-of-the-box ideas at the wall. Some will stick. They can repeat those until they no longer work. Some will fail. They can avoid doing those again.

 

I think where we often hit a point of disagreement is that I think you are of the mindset that they should never try anything different unless it's a guarantee that it will work. I think about their all-time biggest flops, something like the Lex Express or Diesel push. Both were failures. In both cases, a bigger failure would have been a refusal to even take the risk at all.

 

None of us know if it would work or not. But it's a low-risk, high-reward proposition. And if they start broadcasting all of their house shows on the Network (or even just taping them to air a monthly highlight show if there is an unexpected classic match or they decide to experiment), then they can choose how they present it to their audience at large. Like any idea, there's a right way and a wrong way to pull it off. Whether it works or doesn't, the hope is that before anyone writes off a second attempt wholesale, we try to figure out not just if it worked or didn't work, but why it worked or didn't work. It could just be a promising idea that needs tweaking. Or, as you inferred, it could just be a fundamentally flawed idea.

 

This was the naysaying I was referring to before, and I think it has also been the go-to mentality within WWE for a while now, which is one of many things that has kept the company from growing. No wrestling company -- no matter how sharp the people are running it -- will ever bat a thousand.

[Slasher]

Perhaps you're right that it is naysaying. I did point out though, the positive effects it might have on the WWE to try the experiment (creating a buzz and potentially creating extra house show sales from people who wanted to see if they had anything in store for that crowd). And I will definitely be the first to admit I approach these discussions with what I expect the WWE mindset to be, rather than stating an opinion that is completely unreliant on that viewpoint. Perhaps it makes me a debbie downer or not a fun person to discuss things and I really am working on shedding that tendency. Here is why I think what I said is relevant is that although obviously the WWE is in a good position in terms of controlling the pro wrestling market, they are also seeing dwindling business in some areas of their model and they have to plug the holes with other revenue streams, and in a sense, I can understand why they would be afraid to try new things. They did it with the Network-and I don't really know how successful it is in the short term, but there is no way that replaced the massive loss of no more PPV revenue, or at least a serious reduction of it. But again, I can also recognize how if this experiment works, they can only be in a better place to replace that loss with potential increase in house show sales. So I guess, sure, why not? Lets try it.