World Wrestling Entertainment (WWE), is valued at $6.4 billion market cap as of 10/19/18 (1), with annual revenues of $801, million and international revenues of $200 million (2). WWE didn’t get to this level of success overnight. Since Vince McMahon took over the company in 1979, its business model has made multiple pivots over the past four decades to get where it is today. The most recent pivot involved a courageous business strategy of digitizing its content, a freemium pricing model, transmedia storytelling through various social media outlets, and data analytics.
Digitizing Content
In February 2014, WWE released their own digital network through a downloadable app instead of a traditional cable TV Channel. Many business analysts thought it was foolish, since the WWE made most of its money through monthly cable TV pay-per-view (PPV) sales. WWE did not fear cannibalization because they realized that due to the price point of their PPV events, many of its fans were not purchasing its products, and were opting to watch via illegal downloads/streams and highlights on YouTube. According to Michelle Wilson, co-president of WWE, “we really dug into our research and realized that the WWE fan base over-indexed for watching digital video content. They were twice as likely to subscribe to a streaming service and watched 5 times the amount of digital content” (3). Armed with a blessing from Vince McMahon himself, WWE moved forward with the release of the WWE Network. By distributing its content directly to consumers, WWE disrupted the traditional cable market. By April of 2018 the WWE Network ballooned to 2.1 million subscribers (4).
Freemium Model
WWE creates a massive amount of original content for its viewers over multiple channels of distribution. The WWE creates five hours of cable TV content a week, plus 400 hours of content for YouTube, Facebook, and the WWE website, on top of the 400 hours of original content for its paid subscribers (5). The mixture of free content online, paid tv content, and subscription content helps to prevent cannibalization of WWE content when fans share it through different channels. The most exclusive and high-end content can only be accessed through a subscription to the WWE network. CFO George Barrios explains, “we call it tiering the content . . . all those different platforms, different content . . . it raises all boats” (6).
Transmedia Storytelling through Social Media
WWE is involved in just about every social media channel you can think of. WWE has an astounding 850 million social media followers, which is larger than any other sports entity in the world (7). WWE’s Superstars utilize social media to engage persistently with their consumers on Twitter, Facebook, Instagram, and YouTube (8). WWE Superstars also use social media to further develop their onscreen personas and push storylines. Serrapica of Medium describes the significance of social media for WWE stars: “Wrestlers are essentially required to have a social media presence, using it to interact with his or her fans, making them a part of our lives” (9). They also make their fans part of their weekly television shows by promoting predetermined hashtags to stimulate conversation on Twitter. Some of the tweets are even displayed on the bottom of the TV screen (10).
Data Analytics
“In 2010, WWE’s online videos were viewed 500 million times. In 2017, WWE’s online video views grew to 20 billion,” says CFO George Barros (11). WWE has leveraged the data gathered from its extensive digital presence to grow its business. Through the analysis of both the digital data and social media comments, WWE gains intricate details of what content its fanbase prefers. This has led to the WWE choosing their wrestling matchups based off of consumer data and increasing the number of women’s segments because the data showed that women’s segments were regularly the highest rated portions of their live shows.
WWE has completely transformed their business over the past few years and have been rewarded with record revenues and earnings. Vince McMahon empowered his entire organization through a top down approach, allowing his employees to develop and launch the highly successful WWE Network, and in doing so disrupted the traditional TV model. The disruption did not stop there; they utilized a freemium model to distribute content, prevent cannibalization, and grow subscriptions to their network. WWE also uses their social media network to perform transmedia storytelling throughout their content, further engaging their fan base and making them a part of their product. Most astutely, they leverage data analytics to give their customers more of the content that they want. In my mind, WWE’s digital marketing strategy is truly unrivaled. In this new world order of digital disruption, the WWE is World Heavy Weight Champion. It will be interesting to see how WWE leverages the massive amount of data it has collected in the future to stay on top of the sports entertainment world.
References
(1) “World Wrestling Entertainment Market Cap 2006-2018 | WWE.” Macrotrends, 18 Oct. 2018, www.macrotrends.net/stocks/charts/WWE/world-wrestling-entertainment/market-cap.
(2) WWE. “WWE: Reimagine 2017 Annual Report.” WWE, 2017, corporate.wwe.com/~/media/Files/W/WWE/annual-reports/annual-report-2017.pdf.
(3) Haden, Jeff. “How Did WWE Become a ‘Most Valuable Sports Brand’? And a ‘Most Innovative Company’? By Betting On (and Disrupting) Itself.” Inc.com, Inc., 17 Aug. 2018, www.inc.com/jeff-haden/how-did-wwe-become-a-most-valuable-sports-brand-a-most-innovative-company-by-betting-on-and-disrupting-itself.html.
(4) WWE. “WWE® Network Hits Record 2.1 Million Subscribers.” World Wrestling Entertainment Inc., 9 Apr. 2018, corporate.wwe.com/investors/news/press-releases/2018/04-09-2018-204506063.
(5) (6) (7) (11) Gurdus, Elizabeth. “WWE Is a ‘Data Powerhouse’ Thanks to Content, Growth and Digital, CFO Says.” CNBC, CNBC, 20 Jan. 2018, www.cnbc.com/2018/01/19/wwe-is-a-data-powerhouse-thanks-to-content-growth-and-digital-cfo.html.
(8) Meyersohn, Nathaniel. “Why WWE Is a Media Juggernaut.” CNNMoney, Cable News Network, 2 Feb. 2018, money.cnn.com/2018/02/07/news/companies/wwe-vince-mcmahon-wrestling/index.html.
(9) (10) Serrapica, Joe. “The WWE Has the Best Social Media Strategy – Digital Living – Medium.” Medium, Digital Living, 4 May 2016, medium.com/digital-living/the-wwe-has-the-best-social-media-strategy-a4b50eb7e1a9.
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