WWE, Inc. Consumer-Centric Business Model: Whether Reforming through PPV !

Arjun J Chaudhuri 

WWE, Inc. that World Wrestling Entertainment, Incorporated [WWE, Inc.] is publicly traded US entertainment company founded in 21 February 1980 that is known for its innovating entertainment of ‘contrived’ professional wrestling matches, that provide ‘content’ for TV audiences who pay ppv and/or subscription fees to content/distribution providers: nationwide cable or satellite TV, network/channels, and digital content and TV. This company originally named as WWF, inc., changed its name to its present WWE inc. in 2002, and corporate branded itself to be called as such legal entity in 2011, after its merger and acquisition [M&A] in 1982 of capitol wrestling corporation, prior holding company of WWF, inc. That as publicly traded us entertainment company, WWE Inc.’s share price moves in the price-band of 8-12 USD,  per share on the New York Stock Exchange [NYSE] with market capitalization of plus 200 million USD, according to fair value report. WWE incorporated is private controlled family business whose CEO is Vince Mcmahon, former professional wrestler himself, and that he along with his family members: wife, son & daughter, hold and control approximately 70% equity and 96% voting power in WWE, incorporated.

Consumer-centric business model that the business quote: ‘the most fundamental aim is to make money out of satisfied customers’ is apt for the risky, yet innovative approach of WWE, inc. to its TV audiences who have traditionally paid pay per view [ppv] for WWE content provided by nationwide cable or satellite TV network/channels, and which consumers today have the option for subscribing to 24x7 direct-to-consumer sports network that provides digital content of WWE to paying subscribers that do not need to have subscriptions to nationwide cable or satellite TV network/channel contracts. The cost to customer is u/the new scheme is 10 USD,  per month for subscription to 24x7 direct-to-consumer sports network of WWE digital content vs. 50 USD,  for ppv subscription of 12 WWE professional wrestling events that was earlier paid to nationwide cable or satellite TV networks/channels contracts held by telecasters/broadcasters such as HBO or Showtime.

24x7 direct-to-consumer sports network

WWE Inc. has launched the first full-fledged 24x7 direct-to-consumer sports network that provides digital content of WWE to paying subscribers that do not need to have subscriptions to nationwide cable or satellite TV network/channel contracts. TV & digital content consumers from key demographics can directly access the WWE digital content from its WWE studios that direct the 24x7 direct-to-consumer sports network. That when it was originally launched, the WWE direct-to-consumer sports network struggled to gain viewership, and cannibalized viewers from its more lucrative pay-per-view (ppv) professional wrestling events.Today the direct-to-consumer sports network is growing quickly with over 1 million total subscribers that has seen over 10-15% increase in its viewership year-on-year, contributing $27.2 million to the last quarter of reported earnings.

Conclusion

The operation savings on carriage fees by 24x7 direct-to-consumer sports network in bypassing the nationwide cable or satellite TV network/channel in distribution of digital content has resulted in cost-benefit to the consumer for WWE content in digital.That whether this cost-benefit can be scaled up in the US and foreign market for digital content and TV is the vital question of economic importance. There is no doubt that this approach of WWE inc. is bringing about pricing reforms in how consumers are charged by nationwide cable or satellite TV networks/channels that were earlier increasing ppv charges and subscription fees to household consumers arbitrarily, and the earnings methods of these nationwide cable or satellite TV networks/channels that have achieved horizontal & vertical integration, and growth.