With it being the holiday season, a time when people will participant in the Royal Rumble to snag the best deals in stores or rack up more debt than the AEW video game project with online shopping to find the perfect gifts, it’s important to remember that sometimes there can be too much of a good thing. Instead of dozens and dozens of gifts that get lost in the shuffle of wrapping paper and price tags, maybe that one special gift, such as a mint in box WWF Hasbro would stand out even more?
However, the WWE machine is in the content business, an aspect of the TKO business model that was emphasized even more with the upcoming move to Netflix, which is unprecedented territory. Don’t get me wrong, the WWE is doing great business right now, not necessarily as a part of pop culture like it was in the late-90s, but rather they are serving their audience very well, which allows them to make more money from the fan base than in the past. The solid product, including the fresh presentation, storylines, and star power of the overall brand allow the publicly-traded corporation to sell tickets at a much higher price, which has contributed to record-setting revenues the past for years. Of course, the main portion of that hefty cash that the company brings in is from the television deals, as networks try to compete with every other form of media for viewers to secure ad revenue. Again, as much as some try to claim that pro wrestling is in another boom period, I’d still say that is misguided. Keep in mind, when sports entertainment was at its peak in the late-90s, there were roughly 10 million viewers watching either Raw or Nitro on any given week. The shows were so popular that the NFL moved its trademark Monday Night Football schedule to an hour earlier to try to keep viewers from channel surfacing if a game was competitive before the wrestling broadcasts started.
That’s simply not the case with professional wrestling in the modern era, and it’s from a combination of factors that affected the dynamics inside and outside of the business. Of course, there are so many entertainment options for the viewing audience that there will be a natural erosion of viewership because there are watching other type of media. Every TV show, podcast, and streaming service are competing for those viewers. That wasn’t the scenario in 1998 when most homes only had a basic cable package and a computer wasn’t a household item yet. Furthermore, the dynamics of the business organically saw the pieces of the puzzle fall into place that had some of the biggest stars in the history of the business in the right place at the right time for the genre to become a part of pop culture. The competition between Raw and Nitro isn’t something that can be replicated because society and the industry are in a much different place.
So no, professional wrestling isn’t in another boom period, but as I said, it’s serving it’s audience, which is ultimately why the WWE is drawing major money right now. Remember, with all the previous options mentioned that compete for viewers or listeners, advertisers want to make sure their products get in front of the right demographic to be able to sell them. The WWE offers a consistent and steady number, which is useful for sponsors because it gives them a level of assurance that their commercials will be seen by their target audience. Those sponsors know they have a better chance of a return on their investment of paying for commercials during a broadcast because of the consistent viewership, even if that number is lower in the modern era than it was during the heyday of the Attitude era.
In short, a major financial piece of the puzzle for the WWE business model is to provide an avenue for other companies to market their products, which is why networks continued to bid for the broadcast rights of the shows until the Netflix deal was signed. Let’s not forget, when a company buys commercial time during an episode of Smackdown, the USA network gets a potion of that cash. It’s a different fashion, but the same dynamic, Netflix paid $5 billion rights to Raw to truly cement itself as a player in the live event business. Obviously, the primary objective is to secure new and continued subscriptions for the streaming platform, but aside from that, it also opens the door for more sponsors and commercials to go along with those live events. It’s undoubtedly a way for the streaming service to add more revenue for it’s distribution of content, and again the consistent audience that is usually associated with the WWE provides a level of stability for their investment, especially on a long-term basis with the 10-year deal.
However, could this eventually be too much of a good thing?
Just recently it was announced that Smackdown, the only brand left on cable television for the WWE, will expand to three hours next month. With as legitimately historic the Raw move to Netflix is, it’s important to keep in mind that Smackdown will continue to play a key role in the success of the company because while putting Raw behind a paywall brought more money with it, the blue brand is still a critical part of the equation for new fans to discover the product. The WWE simply can’t expect the next generation of fans to want to pay to subscribe to Netflix just to sample the product so a brand on free TV is still very important. That being said, even with the success that the company has right now, is there truly a demand for another hour of content on the WWE line-up?
Furthermore, and this is equally as important to this scenario, it adds yet another hour of scripting or a nearly 30% increase in the amount of content that must be produced for the show. That’s more angles and more matches that must be used each week, which could lead to stable segments in the grand scheme of things. There are only so many different situations that can be booked for talent before there’s almost an unintentional pattern to the product.
It should also be noted that there are always going to be peaks and valleys to the WWE, that’s the nature of any business, and with the long-term investment of Netflix and the five-year deal that USA has for Smackdown, it remains to be seen how the product meshes with this format over the next few years. Sure, right now the office might be able to script a three-hour Smackdown with The Bloodline as the foundation of the brand and it will retain viewers, but what about two years from now? Again, I understand that publicly-traded company isn’t going to leave money on the table, but with the addition of another hour on Fridays, there could eventually be an argument to be made that there will be an over saturation of content.
The diehard audience is the exception to the rule, but considering that the WWE is basically the Walmart of pro wrestling, as it’s easily accessible, relatively cheap, and caters to the lowest common denominator to attempt to draw the biggest audience possible, it’s important to keep in mind that most of the general public doesn’t want to watch countless hours of sports entertainment. The patterns of the Raw numbers show that there is usually a decline in the third hour so it shouldn’t be a surprise if the same happens for Smackdown, but the biggest takeaway from this situation might be that an over saturation of WWE content during the next few years might be the reason for lower ratings overall for Smackdown. Obviously, it remains to be seen how another hour will affect the numbers for the blue brand, but it will be very interesting to see how the move to Netflix for Raw shifts the dynamics of the product.
What do you think? Share your thoughts, opinions, feedback, and anything else that was raised on Twitter @PWMania and Facebook.com/PWMania.
Until next week
-Jim LaMotta
E mail [email protected] | You can follow me on Instagram, Facebook, & Threads @jimlamotta89
