Vince McMahon is on the way to pinning down online video.
WWE’s new online network has signed up about 667,287 subscribers and is projected to hit 1 million by the end of the year, which the company said was the magic number for the service to be break even.
Launched 42 days ago on Feb. 24, the WWE Network costs subscribers $9.99 a month. Content includes access to all of WWE’s pay-per-view events including Sunday’s “Wrestlemania” event. There is also a library of vintage WWE programs available. Subscribers must make a six-month commitment.
Much of the entertainment industry is watching the WWE Network to determine the viability of online networks. WWE had initially planned to launch a traditional cable channel and then toyed with a pay-TV channel model similar to HBO.
But Chief Executive McMahon decided instead to embrace an over-the-top Internet model.
“Our fans are early adopters of new technologies,” McMahon said in January. WWE’s chief revenue and marketing officer, Michelle Wilson, said offering an Internet-delivered service will also give the company “control of our destiny.”
Not all of WWE’s cable partners were thrilled with the launch of the WWE Network. There are concerns that the more people sign up for the network, the fewer people will pay cable and satellite operators for WWE pay-per-view events.
Some even threatened not to carry “Wrestlemania,” but none followed through on that, according to a WWE spokesman.
Separately, WWE still has not announced new TV deals for its popular shows “Raw” and “Smackdown,” which currently can be seen on NBCUniversal’s USA and Syfy, respectively. WWE is shopping the shows to other networks and has said it plans to have contracts in place either at the end of April or in May.
Cable channels that have kicked the tires of “Raw” and “Smackdown” include FX Networks, parent of FX, FXX and AMC. However, WWE is said to be seeking a big increase in rights fees and that is proving a challenge for suitors.
There is also a chance that the shows won’t move. NBCUniversal has limited matching rights for both shows.
The challenge for potential buyers is that although WWE fare gets big ratings, there isn’t much of a trickle-down effect. Also, though WWE has softened its content to appease advertisers, it still does not always command a commercial rate commensurate with the size of its audience.