WWE’s Strategic Marketing Plan
One of the most fascinating strategic marketing decisions over the past couple years has come from World Wrestling Entertainment (WWE). In early 2014, the WWE shifted part of their business model from being driven by monthly pay-per-view events (PPVs) (where fans paid between $45-$70 to watch each event live on their television) to launching a new digital channel called the WWE network available across numerous devices. For wrestling fans, it’s a good deal as for $9.99 a month, you get a live 24-hour-a-day network that features some original content, broadcasts of classic WWE matches, video on-demand access to the entire WWE, WCW, and ECW pay-per-view archive, plus live streams of all 12 WWE pay-per-views. This Netflix type monthly fee model that includes all (12) live PPVs for what it previously would have cost a fan to buy just (2) PPVs is a fascinating business decision that led some investors to wonder if the WWE Network revenue could make up for the lost pay-per-view revenue.
WWE announced this week that the WWE Network, which launched in February 2014, had surpassed 1.3 million subscribers, thanks in large part to recent subscriber additions for last Sunday’s WrestleMania. Despite the boost in subscribers (WWE had just 1 million at the end of January), investors reacted negatively as the company said the figures could fall in the future following big events.
WWE marketers have been aggressively using a variety of sales promotion strategies. For example, the boost in subscribers was aided by a free trial available in February, which added 201,000 trial subscribers, with 77% of them converting to paid subscribers in March.
Sources: Chris Ciaccia, “WWE Gets Pummeled as Investors Fear Subscriber Numbers Will Erode,” thestreet.com, March 30, 2015. http://www.thestreet.com/story/13095125/1/wwe-gets-pummeled-as-investors-fear-subscriber-numbers-will-fall.html?puc=CNBC&cm_ven=CNBC
Ben Sin, “The WWE’s New Digital Channel Could Kill The Business Model They Built,” Sports Illustrated, January 9, 2014. http://www.si.com/extra-mustard/2014/01/09/wwe-digital-channel-ppv
Discussion Questions:
1. Do you agree with the WWE’s strategic marketing plan to shift revenues toward their digital network instead of traditional pay-per-views?
2. What sales promotion strategies would you suggest that the WWE use in the future to increase the number of network subscribers?
