How The WWE Just Laid The Smackdown On The Entire Cable Industry


At the end of an opening montage displayed across the big screen at last week's Las Vegas Consumer Electronics Show (CES), there was a strong message that served as somewhat of a prelude to the unveiling of WWE Network.

But if World Wrestling Entertainment's staying power relies on fan loyalty, the latter part of that statement has as good a chance as ever of holding truth following the company's latest announcement:

As part of the package that comes with a subscription to WWE Network, fans will also have access to loads of original programming and can enjoy monthly main events, such as the Royal Rumble and Wrestlemania, at no extra charge.

What's most fascinating about the wrestling juggernaut's announcement, though, was that virtually every aspect of it had a sense of revolution to it, including the company's mere presence in Las Vegas. Last week marked the first occasion of WWE being featured at CES, and what a debut it was. The Vince McMahon-led company stole the show, as fans salivated over the prospect-endless content.

What's even more interesting to consider is that the imminent launch of WWE Network, on February 24, has implications that affect parties besides the company itself. Thirty years after WWE (the World Wrestling Federation at the time) helped give birth to the Pay-Per-View phenomenon with the first ever Wrestlemania, the company has made a move that might spell the beginning of the end for PPV events, certainly as far as wrestling is concerned.

WWE Network's price of subscription -- $9.99 per month with a half-year commitment -- means that fans can get hours upon hours of original programming, plus main events over a six-month period for about the same price of a single PPV event (prices can range from $55 to $75 for a single viewing).

It's an offer that's enticing for even the casual enthusiasts. One might imagine that a fan, who doesn't envision himself fully taking advantage of all of WWE Network's features, for instance, might still purchase a subscription if he sees himself watching just two or three main events over the span of a year.

In almost every scenario, the math adds up in favor of WWE and their fans. There simply is no competition between the new network and PPV when it comes to value for money.

However, while the effect that WWE Network has on PPV seems like a move made out of nobility, and feels a bit Robin Hood-esque (i.e., stealing from the rich and giving to the poor), the impact that the company's announcement has on its relationship with the cable industry has a delightful sense of devil and cunningness to it.

Incidentally, WWE's big move comes at a point when the company is negotiating its contract for the rights to its weekly shows ("Monday Night Raw," "Friday Night Smackdown," "Main Event," "Saturday Morning Slam" and "Total Divas"), which comes as no coincidence.

Translation: WWE sneakily contrived a scenario in which they could start a bidding war over its television content all at once, and the reason they've done so is simple.

As Grasser explains, WWE's TV programming has been undervalued for years, a point which can be made by comparing it to similar companies. NASCAR, for example, recently secured a 10-year contract with Fox and NBC that will see the racing giant earn $820 million a year. WWE, on the other hand, only banks about $140 million per year from television contracts.

Now, with a much younger and diverse fan base than NASCAR, as well as better ratings, Vince McMahon and WWE are coming to collect. The fact that the company has a new leg to stand on with its new 24-hour streaming service -- a sign that the company can generate viewership and revenue on its own -- gives WWE added leverage in negotiations.

Furthermore, should negotiations prove successful, it may set a precedent for sports and entertainment entities that seek to gain the upper hand over Pay-Per-View and cable companies.

If and when others follow suit, no matter if they outshine the wrestling company's 24/7 steaming service, everyone will know by whom the standard was set.

WWE: Then. Now. Forever.

Photo credit: WWE