There are some changes coming to the streaming service the WWE Network. As to what said changes are, there are a lot more questions than there are answers; however, change is coming quickly, by the second quarter of the year.
During a WWE investor call, WWE's CEO Vince McMahon stated that the company is looking at "evaluation of strategic alternatives for our direct-to-consumer service." This sentiment was also relayed by interim CFO Frank A. Riddick III. As to what this actually means, McMahon stated throughout the course of the call that there are many options.
The first option was, as the CEO put it, "selling rights to the majors," as they are "clamoring for our content." Apparently, this option is already in negotiations, and if all the pieces fit, this new arrangement will be announced in the first quarter. "It's going to be transformative," McMahon stated.
As to what rights are being sold off and to what extent remains unknown at this time, and many are speculating that McMahon was referring to the rights to major WWE events, or PPVs. Many current WWE Network subscribers have the network just to watch these events like Royal Rumble and Wrestlemania--which is coming this April. And the streaming service is really the primary and most cost-effective way for fans to watch the shows. So if the rights to these major events are being sold to other "majors"--for instance, a network like ESPN or FS1 perhaps--WWE's programming could reach a much wider audience, so long as these same events don't leave the WWE Network. If these "majors" become the only way for fans to watch the events, there's a large possibility subscribers will leave the network in droves, as well as alienate the loyal fanbase.
A large-scale deal of selling off rights may seem like the nail in the coffin for the WWE Network. McMahon stated, "Our network is our most premium content." And we know this because the average paid subscribers decreased 10% in the fourth quarter of 2019--according to a recent financial press release from WWE. During this time, WWE Network's NXT moved from the streaming service to USA Network for a weekly series. While correlation does not imply causation, the WWE Network lost its most-popular original piece of content and subscribes left. Hopefully, with this deal, WWE Network will also continue to stream its PPVs on its own service.
Option two for the streaming service is ad revenue. McMahon said this is a possibility if the service stays the way it is now. That could mean that the $10 a month service could also have commercials placed throughout each program, much like how the ad-supported version of Hulu works. There are a few other services moving towards this type of business model, like NBC's upcoming service Peacock.
The third option--which could coincide with the second--is a tiered system. In December, WWE tested a free tier of the network and according to Riddick, it's too soon to look at the data from that trial run.
The second quarter begins in April, so before we finally know what happens to the WWE Network, we'll hopefully still have Wrestlemania to watch on the streaming service. So this may be the last time to take advantage of the new subscriber sign-up where you get one month for free on a trail subscription, which includes major WWE events like Mania and the upcoming Super Show Down.
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