WWE News WWE NEWS: McMahon announces Network model, but no timetable for launch; latest on Network plans & survey findings
Nov 1, 2012 - 11:15:09 AM
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By James Caldwell, PWTorch assistant editor
WWE CEO Vince McMahon officially announced Thursday that the WWE Network model will be a "premium subscription model." No timetable for a launch was revealed, as WWE continues to be in negotiations with potential distribution partners.
McMahon later said during WWE's quarterly conference call with investors that WWE is considering "several" potential strategies under the premium subscription model. One would include select PPVs distributed through the model and the other would not include PPVs.
Asked if the "HBO-type model" would cannibalize WWE's standard TV shows and PPVs events, McMahon said, "Whatever we do will be an add-on when you look at the entire production."
McMahon did reveal that WWE's TV contract with Syfy "comes up soon" for Smackdown. It points to a major fork in the road for WWE to either continue with heavy original programming on other networks or shift some of their brand-name shows to the Network. The timing of when Syfy negotiations take place and when the Network actually launches could contribute to that decision.
"We have to look at this in terms of totality to promote Network, PPV, and everything else we do," McMahon said about wanting to make sure WWE has ample programming on other channels in order to promote a Network.
Also during the conference call, WWE management stressed the findings of a recent survey that captured why they are pushing through with a Network. CFO George Barrios noted that 50 percent of U.S. households "can be considered a WWE fan household" or "have an affinity" for WWE.
The research was the foundation for WWE deciding to push through with a Network, as WWE believes they can reach hardcore, casual, and lapsed fans with different types of programming. Barrios cited items from the survey indicated lapsed fans "have expressed interest in re-engaging with the product" and 50 percent of people who were classified as WWE fans "want more content."
"We view the premium subscription model as the best approach to capitalize on our fans's commitment," said Barrios.
McMahon added that WWE Network can be successful financially without reaching lapsed fans. "We don't need to capture all of that audience," McMahon said, referencing the survey. "(For) just the ones that are very likely to join the Network, our model makes a considerable amount of revenue."
As for programming, McMahon said WWE is not ready to reveal specifics because negotiations with potential partners are ongoing, but they will be looking at the individual audiences (hardcore, casual, and lapsed) to see what they would prefer, then blending the programming together.
Overall, McMahon said WWE's goal will be to make Network "the most interactive network out there," stressing WWE's social media initiatives.
WWE could not provide specific financial numbers on the Network during this conference call, but Barrios said WWE hopes to have firm numbers to provide to investors and analysts during the fourth quarter conference call, which will take place in early 2013.
Barrios did provide a figure that 80-90 percent of investment spending is complete to build the Network infrastructure. The next "big increase" will be marketing a Network launch, then marketing the Network once it launches.
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