Hi all, Happy Easter and welcome back to a column that has taken far longer off than planned lately. Please accept my apologies, it wasn’t until recently I realised it had been some six weeks since my last posting! I haven’t even had time to comment on other posters offerings in the forums to which I belong (so apologies to them too) but I hope to be able to get back on track again over the coming weeks.
It did give me a chance however to take a step back and re-evaluate my writing, and suddenly I realised it has been some four months since I last did a column about actual business concepts in the industry. Four months??? It’s specifically the main thing I wanted to write about when I started last year! So this week I go back and discuss something which over my recent absence has undergone some rather drastic changes – the Brand Extension. Is it in a better place now than it was before and what about where it is allegedly going? Most importantly what impact will it have from a business perspective on the WWE?
Of course things are now more than just “Red Vs Blue”. But what has happened with these two recently? In my opinion, we are fast approaching another boom period in the WWE, as young stars are becoming regular names on the higher end of the card and producing better and better matches. Guys like Mr Kennedy, Bobby Lashley, Carlito, CM Punk, Matt and Jeff Hardy. Granted, they are all at different stages of development, but in my opinion they have all come a long way over recent months. Ultimately this means that after a mass exodus of higher name talent such as The Rock, Stone Cold, Kurt Angle, Chris Jericho, Brock Lesnar etc we are slowly starting to see those spaces in the card get filled up again with ever improving matches. Yes, there was a time when calls to amalgamate into one roster again were quite justifiable, but the WWE have rode it out and I believe will soon start to see the benefits from the gamble they took of keeping the rosters apart, namely twice the number of stars considered “Main Event” calibre over both the Raw and Smackdown rosters, twice the number of profitable house shows in a year and four times the number of “dream matches” that can be had between all the top stars. It really would be like they have their own “friendly” competition capable of negotiating Superfights with each other. ECW is to be fair currently some way off that same level but it is at a different stage of development to the other two and still finding its feet.
WWE did however announce that they would merge all brands for all Pay Per View events from Backlash onwards. We have also seen a lot more inter-brand matches on TV and will no doubt continue to do so. Whilst there are some down sides, I think this is overall a great idea and the reasons why are few but simple and effective.
Recently the executives at Titan Towers decided to increase the price of your average Pay Per View event. The reason for this from a financial perspective is straightforward. They want to make more money. I mean at the end of the day, they are a company with stockholders to please, so can you blame them? There are three ways to do this without increasing your fan base, open up more ways for people to spend money – known as revenue streams (such as launching WWE 24/7), hold more events (such as more PPVs and more brands holding house shows on the same night), or finally charge a little more for what you already have. This is a prime example of the last of those. Its all about extracting as much money as you can from your customers before they turn around and say “I’m not spending that much!” It’s like they are playing Chicken with your wallet and seeing how much they can take from it before you put it away and out of their reach.
But this in turn has caused a backlash of its own. Whilst it has been hard to keep the standard of PPV cards high in recent months, were we reaching that point where people would stop paying because they no longer felt it was value for money? Buy rates appear to have gone down slightly per Pay Per View in recent years, although this is compensated for by the fact that they hold more Pay Per View events throughout the year (as an example: 12 events at 1,000,000 buys each or 16 events at 850,000 buys each, which is worth more money if the price is the same?). But could falling numbers all the same for each individual Pay Per View show that they don’t quite deliver for what the average consumer pays? Each individual consumer can only part with so much money over a year of course so they pick and choose some of the events, as they only earn so much and need to buy essential items to live. But by trying to take up a bigger proportion of their lives, they encourage the fans to commit a bigger proportion of their income too. However if fans no longer wish to commit that time or money, they become apathetic.
How to combat this perceived apathy? The obvious answer is to merge the brands on Pay Per Views. Why? Because it increases the standard of the typical Pay Per View card and how much extra does it cost them? Very little. Yet for the rest of the year they continue to hold more profitable live shows than they could with one brand touring. For one night, they might lose out on the profit of a house show held elsewhere, but in the grander scale of things this is negligible and more than compensated for if buy rates were to go up for the Pay Per View as a result. This is in my opinion a very, very smart move.
Ultimately it is a move away from the “less is more” approach to business that the WWE often like to take. In the ring, they encourage talents to adopt that approach to and not to become Spot Monkeys, on the grounds that it means more when a big spot happens. That’s logical, but they were also trying to apply that idea to business too by only merging the brands at the four biggest Pay Per View events – Royal Rumble, Wrestlemania, Summerslam and Survivor Series. “Less is more” is a sensible concept, getting as much as you can out of as little as possible, but there comes a point where it can start insulting the consumer’s intelligence. It’s like when there was outrage because Cruiserweights were practically overnight told to turn down their movesets. Matches became rather stale and unexciting between these guys almost immediately and the apathy towards them that followed set the division back significantly. Sure their reasoning was sensible and their hearts were in the right place, but it didn’t change the fact that the audience was left feeling there was no substance in the match. Returning to the Pay Per Views, it was the same, the audience felt that cards were lacking substance to the point where it was no longer worth the higher fees being charged. This is now changing as every card will be loaded and the average viewer will think this provides better value for money.
But there will be some down sides and pitfalls which they need to keep an eye on and carefully balance out. The following is just a few and no doubt those in charge in Connecticut will be aware of many more. Will this increase in value hold in the long term? Once we get used to all the brands being on one Pay Per View, will we think it’s not as great as it could be? Where do the WWE go from there if this happens? Will there be too much focus on the top matches making the lower card irrelevant and pointless filler? Will TV shows suffer as a result of just a few stars dominating all three shows? How might that affect the chances of other up and coming young stars? Consequently what would happen if a couple of big names were to suddenly become injured within a short space of time? If you have little to no mid-card, only Main Event and Filler, how can you get someone to step up the card legitimately in the eyes of the fans?
This does however leave one more question. The “Big Four” Pay Per Views charge just that little bit more if you want to order them. The reason for this was that all three brands were present for these events only. Now this is a more regular occurrence, just what will the WWE do now to justify the higher price?
At the end of the day, if you mix Red and Blue together too much, you just get Purple, and you can’t separate your original colours. Two become one again. If the WWE aren’t too careful, perhaps those vocal advocates of merging the brands back will get their wish after all.
Just a thought…
Many thanks to those of you who got in touch recently asking when the next column would be. I’m only sorry I couldn’t get this one out sooner! I would very much like to hear your thoughts on this subject so get in touch at stuart_black@hotmail.com and let me know what you think. Next week Part 2 on this topic as I look towards future rumoured plans for the brand extension. Five brands??? Apparently true…
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