Tuesday, January 27, 2015

Wrestling Fans Hit Vince McMahon Where It Hurts with #CancelWWENetwork

When fan favorite Daniel Bryan was unceremoniously dumped from the Royal Rumble, WWE fans everywhere revolted.
By Joe Parello (@HerewegoJoe)

Sunday night brought plenty of opportunities to watch pointless and, most likely, fixed competitions. But even with Miss Universe and the Pro Bowl on, the most significant predetermined event of the evening had to be the WWE's Royal Rumble.

For those unfamiliar, the Royal Rumble is a Pay-Per-View (PPV) that WWE puts on every January, serving as the beginning of the company's "Road to Wrestlemania." Basically, Wrestlemania is the biggest show of the year, and the Royal Rumble sets it up. The Rumble itself is a 30-man battle royal that main events the show, with the winner usually getting a world title shot at Wrestlemania.

It's a star-making show, with such legends as Hulk Hogan, Ric Flair, Shawn Michaels and "Stone Cold" Steve Austin all getting major boosts from winning the Rumble.

Each year the company, effectively, names it's "next big thing" with the Rumble winner. This rising star usually goes on to win the title at Wrestlemania and enjoy a run of main event work.

But what happens when the majority of wrestling fans want one performer pushed, and the WWE goes in a completely different, but utterly predictable direction?

Usually, there are a few boos, but fans eventually accept WWE's decision and just go with whomever the company pushes. I mean, what other choice do you have? Especially at this point, with the traditional wrestling "territories" dead and the last legitimate competition to Vince McMahon's WWE, the old WCW, now owned by the sports entertainment giant.

As a fan, there isn't much you can do.

That is, until McMahon and the WWE gambled on the newly launched WWE Network.

Sunday, fan favorite Daniel Bryan was eliminated early in the Royal Rumble match, and the hostile Philadelphia crowd proceeded to boo nearly every performer that entered the ring after. It was somewhat uncomfortable to watch, and when eventual winner Roman Reigns, WWE's latest "chosen one," celebrated his victory, with his cousin Dwayne "The Rock" Johnson no less, both were booed.

When wrestling fans boo The Rock, something is seriously wrong, but what can fans actually do to enact change? Apparently, start a hashtag. So #CancelWWENetwork was born.

The WWE Network is a subscription-based streaming service that will cost you $9.99 a month. For those 10 bucks, you can watch every PPV the company airs, and get on-demand access to WWE's extensive video library of its own history, along with footage from many of the old territories and WCW. If you really want to torture yourself, I hear they have old XFL games on there too…

Speaking of the XFL, the Network, which has been promoted to death on Monday Night Raw and digitally by the WWE, may go down as owner Vince McMahon's biggest failure since his "Xtreme" football league.

But the Network, a relative bargain for fans when compared to paying 60 bucks each month for every Pay-Per-View, not to mention an idea most wrestling fans drooled over when they heard the catalog of old matches available on-demand, has limped out of the gates in its first year of operation.

Launched late last February, the WWE Network set a goal of 1 million subscribers to break even, and 2 million subscribers to rake in a net $50 million annually, a feat that would nearly double the company's yearly profits.

It was a bold move made by a bold man. McMahon is far from risk-averse, but this project, which included a reported $70 million to get off the ground and $55 million in yearly production costs, was a huge gamble, even by his standards.

The WWE has stagnated since its latest "boom" period in the late 1990s and early 2000s, but was still turning a $60 million profit every year. It seemed the Network, which would give casual fans access to their favorite matches of the past and draw more eyeballs to the company's marquee shows, could reignite fan interest, which had waned, ironically, since McMahon purchased his primary competitor, Ted Turner's WCW, after the disastrous AOL Time Warner merger.

Back in 2012, McMahon set a goal of tripling that $60 million annual income figure by 2015, with a new television deal and a revolutionary innovation, later revealed to be the Network, growing the company exponentially.

The WWE already had a fat contract with NBC Universal that paid it $100 million annually, but McMahon expected the next deal to be double or triple that. Unfortunately for McMahon, NBC didn't quite value his product that much, and in May the two companies announced an extension for $150 million. It was a 50 percent increase and huge chunk of cash to be sure, but nowhere near what McMahon had been promising his investors.

The next day, WWE's stock price dropped nearly 50% and McMahon lost $350 million of his estimated $1.1 billion fortune.

In fact, since March of last year, the WWE stock has taken an absolute nose dive, going from a healthy and all-time high $31 a share, to a mere $10.50 today.

The Network was supposed to save the company from its slow slide and usher in a new boom period, but with just 667,000 subscribers heading into last March's Wrestlemania, only 2/3rds of what the company needed to break even, the stock price fell again.

After multiple "free-trial periods," the dropping of the minimum 6-month commitment for new subscribers, and expansions into foreign markets, the Network still sat at just over 730,000 subscribers as of the company's third quarter report in late October.

Then came Sunday night, when the hashtag #CancelWWENetwork became the top trending item on Twitter worldwide, and so many fans cancelled their subscriptions simultaneously, that the WWE Network's cancellation page crashed.

As of now, the numbers aren't in with regards to just how many fans cancelled, but the perceived damage may be done. Even if just a fraction of the the company's core base leaves the Network, it's hard to see it reaching that coveted 1 million subscribers any time soon.

As Business Insider reports, McMahon may have been overly optimistic when he swung for the fences and launched the new digital network, grossly overestimating his fan base. While McMahon cited an in-house poll stating that 52 million broadband-enabled households contain someone that has "an affinity" for the WWE, he probably should have instead looked at his weekly television numbers and monthly PPV buys for a better estimate.

Between 3 and 5 million people watch WWE's flagship program, Monday Night Raw, each week, which is huge. Like, seriously, it's generally one of the five most viewed shows on cable every single week. It's a very well watched program that never goes on break, so you can count on between 3-5 million people tuning into the product 52 times a year.

Let's be generous and call 5 million people the WWE's true "base," not the 52 million that McMahon cited, and deal with the fact that only two PPVs from the WWE each year regularly draw even a half-million buys.

When you consider the fact that McMahon's most probable subscriber is-

A. a regular WWE television viewer, and
B. someone who purchases multiple PPVs each year,

you're left to wonder just how on Earth he ever thought 1 million, much less 2 or 3 million subscribers, was going to be possible in the short-term.

Instead of having to hook just 2% of McMahon's 52 million targets, the WWE is actually trying to target all of the 500,000 people that regularly buy both Wrestlemania and the Royal Rumble, plus another 500,000 fans that only watch the free shows on cable. Not to mention the fact that the Network itself has reportedly had technical issues, and can only be viewed on a digital device or gaming system.

It's easy to see that there's no quick fix here.

McMahon, to his credit, has repeatedly turned bad publicity in his favor, most notably turning the "heat" he took for the 1997 Montreal Screwjob and using it to build the most hated villain in wrestling history, his "Mr. McMahon" character. That evil boss feuded with "Stone Cold" Steve Austin during the most profitable time in WWE history, so it isn't unprecedented for McMahon to take fan unrest and use it to his advantage.

But if reports of thousands of people leaving the WWE Network are true, then McMahon, who has never had an issue pushing a star he valued over one the fans seemed to back, now trolls the "WWE Universe" at his own peril.

For the first time since the Monday Night Wars, wrestling fans have some tangible way of hurting McMahon's bottom line that doesn't include "stop watching wrestling."

That's why fans should hope the WWE continues to invest in what seems to be a network destined to fail, simply due to the number of potential subscribers.

As long as the WWE Network exists, wrestling fans have the closest thing they've ever had to a vote.

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