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My Thoughts on WWE's PPV Strategy

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First off, I would like to say that I do not often post on this website and that this is my first blog. Second, I feel guilty about writing this about a day after RatedATB posted a blog entry about WWE PPVs. While RatedATB wrote more-so on which PPVs should be shown and I'm writing on pricing and the number of PPVs, I still feel guilty, especially on the count of my suggestions section. For those interested, you can view RatedATB's entry here.

I'm writing today because I was thinking about why I never buy WWE PPVs and thought I should collect my thoughts on it. Here are the bullet points.

Expensive – The most glaring problem I see with WWE PPV’s is that they cost $60. Who would pay $60 for a PPV? Oh wait that’s my next section. Back to the point, I hear there are several ways of watching the PPV for less cost, including: group viewings, finding a movie theater or bar that shows it, WWE.com, or an illegal stream.
Now I’m an ethical person and don’t deal with illegal streams; I just flat out don’t watch the PPV. However, I have faith that most people are willing to pay the right price for a quality product. However WWE’s are not at the right price… nor are they quality products for the most part, but we’ll get to that later.

Target Market – As mentioned above, $60 is a lot to pay for a PPV. If you think about it in terms of hours of entertainment per dollar, it’s about eight times more money efficient to rent a DVD. So who would pay for a $60 PPV? I’ve narrowed it down to three types of people.
  • Kids – Kids are stupid. I hate to play that card but it’s true. For example, when I was a kid I bought WWE PPVs. Now I don’t.
  • Parents – Anything to get the kid to shut up.
  • Rich People – What is $60 in the grand scheme of things to a rich person; they buy $100 bottles of wine to get drunk.

Now the problem with this scenario is that kids don’t have money; their parents do. If they were my parents they would tell me to earn the $60 instead of just giving it to me. So unless WWE is planning solely on the business of rich people, this price just doesn’t work.

Variable and Fixed Costs – Now let’s try to get into the reason $60 is the established price. WWE has to have substantial fixed costs with the salaries they pay. High fixed costs are typically offset by selling lots of products, which in this case translates to more PPVs and shows.
However, by reducing product quality (mentioned in the next section) and giving consumers higher prices, demand is reduced. This means that even though the WWE is producing more PPVs that are being bought, less people are buying each PPV.
We also have to take into account the variable costs of each PPV including: stage setup, broadcast costs, and bonuses paid to the wrestlers.
To summarize, unless the WWE is trying to take advantage of the people who are willing to pay $60, in which case screw them, I can understand why WWE feels the need to charge $60 but have doubts as to whether or not it’s the right choice.

Too Many PPVs – As mentioned above, too many PPVs cause a decrease in demand for PPVs. I believe two factors cause this:
  • Financial Burden to Consumers – It’s hard to pay $60 for Night of Champions then turn around and pay $60 for Hell in a Cell two weeks later. A little time to breath would be nice instead of shoving PPVs down our throats.
  • No Buildup – Once again, two weeks to build-up a PPV does not make the PPV significant enough to be worthy of purchase.


How to Change WWE PPVs – The first suggestion I would make is reduce the number of PPVs. I feel eight would be a good number of PPVs to have, as 52 weeks divided by eight leaves 6.5 weeks of buildup on average. This could mean that all PPVs are promised six weeks of buildup and there is four weeks left to allocate amongst the big PPVs.
Here’s the PPV lineup I would do (credit to RatedATB where due for writing it first).
  1. Backlash – It is a PPV tailored to be the fallout of WrestleMania, hence the name.
  2. King of the Ring – This could be the Royal Rumble equivalent to SummerSlam. As Rated ATB said, by having the King of the Ring winner face the champion of their choosing at SummerSlam, the King of the Ring tournament could legitimately build up a wrestler to championship contender level, instead of making the title meaningless by giving it to them on a silver platter with the MitB contract.
  3. SummerSlam – The WrestleMania of the summer.
  4. Extreme Rules – I believe, barring stupid decisions on WWE’s part that this gimmick PPV could work, because fans want to see these types of matches.
  5. Survivor Series – This is kept out of historical sake rather than real value in the PPV.
  6. Breaking Point – Once again, barring stupid decisions on WWE’s part, this PPV could work. I find the idea of two wrestlers without submission expertise getting a tap-out victory refreshing. One thing that would have to happen is more emphasis on submissions in all matches, not just the main events. Also, matching wrestlers with submission finishers against wrestlers without submission finishers is a dead giveaway as to who’s going to win. I’ll allow an I-Quit match for the main event.
  7. Royal Rumble – The only thing I want to bring to attention is making the Royal Rumble the “go-home” PPV for WrestleMania. This would increase the focus on the Royal Rumble winner and make the PPV even more meaningful, as it locks in the main event at WrestleMania.
  8. WrestleMania – Nothing to say.

Now I spent a lot of time talking about the $60 price tag for a PPV, so of course I would recommend a price reduction as well. I cannot pretend to name an accurate price for business purposes, as I do not know how much revenue needs to be generated to offset costs. All I can say is that I won’t consider any price above $20.

Thoughts?

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Comments

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  1. Dr Vries's Avatar
    Jesus Christ, a WWE PPV costs 60$!!!?? in the US?
    The "regular" PPV is 15€-20€ (20$-25$) only Wrestlemania costs 25€-30€ (35$-40$)
    60$ is a ridiculously high price. I guess its not allways bad to live in germany.
    But I do agree with you, there are currently too many PPV's. I grew up with only the big 4 Summerslam, Royal Rumble, Survivor Series and Wrestlemania.
  2. Tall's Avatar
    I remember when only the big four cost money. The others were free. Good blog but I feel each month deserves its own PPV. Six and a half weeks is a long time for shorter feuds to try and keep the momentum going to the next PPV.
  3. B-ri's Avatar
    God you guys get screwed, in the UK it's £14.95 for each PPV PLUS we get 5 free, this year it was:
    -Elimination Chamber
    -Extreme Rules
    -Money In The Bank
    -Night Of Champions
    -Vengeance
    I pay for Wrestlemania most years so I get in theory 6 PPVs for £14.95 or £2.50 per PPV if I don't buy Wrestlemania, I get 5 PPVs for free, I'd say go with 8 or 9 (I do quite like MITB) and make them around the 20 dollar mark, maybe 25 for mania. Only problem with that is I probably lose about 3 free PPVs, ah well, I'm such a good Samaritan!
  4. The Brown One's Avatar
    This blog reminded me a lot about Accounting, with "Variable and Fixed Costs" etc lol. We get PPVs here for $20 a pop, and its still not worth it. I'd rather stream them all, except for Wrestlemania, which I always pay for.
  5. mika009's Avatar
    Call me old school but I liked when Summerslam led to Survivor Series which built to Royal Rumble and had the big blow off at Wrestlemania. Throw a few Saturday Nights Main Events in here and there. Hogan/Savage at Wrestlemania 5 basically had a year build up and by the time Wrestlemania came around I was ready to explode. But that was when people held titles for more than a month or two, and you had a whole stable of real tag teams. Ah, the good old days.
  6. wphill's Avatar
    You guys in America are getting a rough deal.
    Here in the UK, every PPV is £14.99 which at the current exchange rate would be around $24.
  7. ZakPhoenix's Avatar
    In Canada, Wrestlemania only cost around 40-50$. And regular PPV's are around 5 or 10$ less. Especially considering the US economy, what the fuck does this company expect?
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