Last week, the WWE Network was announced at the Consumer Electronics Show. With this announcement, the most game-changing occurrence in the sports television landscape has taken place. The WWE Network is a place where WWE will stream all of its Pay-Per-Views (PPV) live, launch new original content, broadcast pre and post shows for its flagship cable programming, and host all of its old WWE, WCW, and ECW content. The WWE, has surveyed the current television market, and decided its reliance on cable television created too much liability for the largest wrestling promoter in the world.
With the WWE Network, the WWE now has hedged their bets on where the cable world is going. As Netflix, NHL GameCenter, NBA League Pass, and other online streaming services gain prominence, more and more cable users are deciding they do not need cable. Through iTunes, and similar content curators they are able to buy what they want when they want. Due to ballooning cable fees, this a la carte scenario has made a situation where users can get more of what they want, and pay less.
As the WWE are about to sign one of the richest cable deals in syndication and thus profit from the increasing profitability of providing live programming to cable networks. They are also able to capture revenue from binge television watchers and also from cable cord cutters. Thus, as the future of cable becomes more and more into question, the WWE has positioned themselves as ready for whatever happens. If the convenience and choice of cable causes it to gain subscribers and stay as the dominate delivery system for video content, they are positioned well for that scenario. If however, the cost and quality of offerings cause consumers to abandon cable, they will have a very competitive offering.
This new network also will allow the WWE to experiment with new types of content. Reality TV has been something of interest to the WWE in the latter part of the last decade until now. However, it appears as though it was hard for them to find willing partners for more boundary pushing content. Now, they have the perfect place to test these shows and establish an audience before they decide if they want to seek out a cable partner. Additionally, the treasure trove of old wrestling content finally has a home that maximizes its value.
Another interesting part of all of this is that the internet has provided enough disruption to WWE’s distribution that they do not even need cable partners anymore. Whereas other sports stream their games produced by the traditional media partners. In the WWE’s case they produce the shows, hire the talent, and maintain full editorial control. They only need a cable entity to broadcast the content they give them. Other sports need their traditional partners, and the production expertise that they have in house. The concept of the NBA or NHL producing all of their games in house is overwhelming. However, WWE does just that, thus the distribution becomes less important. If one channel loses relevance, not a problem they will jump to the next one.
Perhaps 2014 is the time when WWE decided that it needs to own the entire chain from content creation to distribution and monetize it from start to finish. Perhaps, they have seen the writing on the wall with declining PPV buys and viewership. Perhaps, we are witnessing the future of sports broadcasting.