As a critic of the 2001 WCW invasion and 2002 brand extension, it would be irresponsible to ignore the additional and imminent failure upon us with the creation of a third touring brand in the form of ECW that begins with a PPV this Sunday and debut TV show Tuesday on the Sci-Fi Channel. I cannot predict how long it will take, but ECW will fail.
Since ECW and WCW went out of business in 2001, the wrestling business has lost much of its stature and, more crucially, millions of its fans. In the years since that point, WWE has almost entirely lost its domestic house show business, and seen ratings decrease markedly. Therefore, when WWE releases quarterly reports that hail consistent, record-breaking profits, they miss the problems of the company entirely.
But the strategy of business savvy before product quality, that has propelled the company to record profits and at the same time undermined the product quality, continues. With the ECW PPV Sunday, WWE is increasing the PPV price from $34.95 to $39.95. The move would be wise if it were true that the company was expanding and that there was an appetite for the product, such as in the price increase during the mid-90s, which were met by an increase in buys. But no such potential for growth seems to exist. At the same time the company is accelerating the price increase, WWE has also added several shows to the annual calendar, without a reasonable expectation of growth. Since WWE is adding no new fans and seeing no increase in expenses to speak of, the move to increase the quantity of shows and price of those shows amounts to the conscious gouging of the few fans that remain loyal to the product. At the end of the quarter, this may mean more profits, but in the long run, it is not a good way to create new paying customers out of people who watch the TV for free but skip the PPV shows, or maintain the loyalty of frequent viewers.
Furthermore, with live events languishing, WWE is only able to maintain a profitable live events enterprise because of dramatically increased international tours to underplayed markets in other countries, where the concept of seeing a WWE show live is novel. It is unusual that a company should create two somewhat distinct brands, and then a third, unless business is expanding. But all signs point to a WWE that is contracting. The story of WWE is the story of a company that is bleeding customers and draining revenue streams, but still able to manage consistent profits and even consider expanding. Beneath the superficial surface of stellar profits and good-looking finances is the reality, which few within the company will admit, that WWE is losing ground even with the very fans that have sustained it through dark times.
ECW is the latest move in WWE’s strategy to increase revenue without actually creating a product that will compel new viewers to buy the product, including those that defected in the years since 2000. It is the rare example of a failed product formula and a clever business formula existing side-by-side.
No one can say definitively why most of the people who watched wrestling in 1999 and 2000 no longer watch: one could argue that it was a fad and that interest has wained with the interests of a fickle fan base, or—as explored the Wrestling Observer a few years back—that older viewers grew disinterested in the angles presented in 2001, or that a general malaise has formed around Creative Director Stephanie McMahon-Levesque’s formulaic conception of professional wrestling. I suspect that it is some mixture of the above.
But WWE’s plan for long-term success, outside of WWE Films, is not to create a product that will garner interest new and old. In fact, WWE usually ignores the signals that long-time fans attempt to give. Look at the business strategies: WWE 24/7, additional PPVs, higher prices for live and PPV shows, international touring. These all are signs of a company that is trying to get current fans to spend more on the product. It is a tactic not about getting or keeping fans, but milking them for everything they’ve got while its practicable. But the strategy does not catalyze growth in ways that are more significant: increasing fans that pay to go to a live show, or to increase the percentage of people who watch TV and buy PPVs, or to strengthen the creative product to engage both old and new fans more, or to repair the public reputation of WWE and wrestling. These steps are important to the long-term growth and prominence of the product and wrestling in general.
Forget the fact that the One Night Stand PPV has a lousy card that looks more like a bad Smackdown PPV than the unforgettable show last year. (I will do a column on that next week.) Forget that ECW lacks a brand identity. The biggest problem with the ECW is that it is an attempt to capitalize on an interest in WWE’s product that simply doesn’t exist, and hasn’t in years. The notion that people are interested in spending money on this product—as is—is a sad and nostalgic fallacy with potentially devastating business consequences.
If WWE has the potential to succeed in the long run, it will be because the product adapts to the quality that a larger public will demand from it—among other things, that it doesn’t insult their intelligence. The future of wrestling depends on this sort of shift in thinking. UFC—that, too, a hybrid of hype and sport—has already learned this lesson and has started to reap the benefits.
Can Vince?
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