Insiders say WWE's exclusive US streaming deal with NBCU's Peacock lets the company play to its strengths as media giants battle for market share
- NBCUniversal's Peacock has struck an exclusive US licensing deal with WWE that will mean the end of its standalone streaming service WWE Network in the US.
- Insider spoke with WWE insiders about why the company shifted its priorities away from an in-house streaming product.
- Media analysts also weighed in on how the deal benefits both WWE and NBCU.
- Visit Business Insider's homepage for more stories.
When WWE launched its standalone streaming service WWE Network in 2014, it was a top priority at the company.
A former WWE employee told Insider that the analytics team alone had 64 staffers on it at one point.
"They were so big on WWE Network being the cornerstone of the company and there was so much effort put into making it successful," the former staffer said.
But on Monday, NBCUniversal streaming service Peacock announced it had snagged exclusive streaming rights to the WWE Network. That means the network will shut down as a standalone streaming product in the US in March when Peacock rolls out its more than 17,000 hours of wrestling-entertainment content (WWE Network will still be available internationally). The deal is worth more than $1 billion for five years, according to The Wall Street Journal.
Peacock, which had 26 million signups as of December after fully launching in July, will include live WWE pay-per-view events like "WrestleMania" and "SummerSlam"; original series like "Steve Austin Broken Skull Sessions" and "Undertaker: The Last Ride"; and replays of "Monday Night Raw" and "SmackDown."
WWE Network's content isn't going away. But by no longer offering its own direct-to-consumer platform in the US, where the vast majority of its subscribers were — 1.2 million out of 1.6 million, as of its last earnings report — WWE is cementing itself as a content generator for another media company with a more robust streaming business.
This is a fundamental change for the company that at one time prioritized its niche DTC product. It shows how the streaming landscape has changed to favor consolidation and big players, as media giants like NBCU, WarnerMedia, and Disney have launched their own marquee streaming services to counter Netflix.
It's unclear if the move will result in layoffs at WWE. The company released more than 20 performers, laid off a number of employees, and took other cost-cutting measures in April amid the pandemic.
Three WWE insiders said they felt the Peacock deal was a win for the company and could bring long-term stability. Insider spoke with two former WWE staffers and one current one, who stressed that the company's strong suit was in making content. (The former staffers wished to remain anonymous to protect business relationships and the current staffer was not authorized to speak publicly about internal matters.)
WWE did not respond to requests for comment.
Legacy media companies are looking for more content
"WWE Network was always considered a fringe player in the sports-and-entertainment-streaming space," said Tuna Amobi, a media analyst at the research firm CFRA. "It's become clear that the landscape is more and more dominated by big entertainment companies and they're looking for more and more scale to differentiate streaming offerings."
READ MORE: Meet WWE billionaire Vincent McMahon, who lost billions during the coronavirus crisis and once wrestled with Trump
Amobi added that the coronavirus pandemic had accelerated the "urgency for legacy media companies to focus on streaming." In doing so, they've identified products or content that could boost their flagship streaming offerings.
For example, original TV shows from WarnerMedia's fan-centric DC Universe have moved to HBO Max. Disney's Hulu has become the exclusive streaming home for the FX Network, which Disney acquired in its Fox merger in 2019.
In NBCU's case, it already had a strong relationship with WWE, as its USA Network has aired WWE's "Raw" every Monday night for nearly three decades. The company will also shut down its NBC Sports Network by the end of the year, The New York Times first reported last week, and move some of its programming to Peacock and the USA Network.
"For Peacock, both the NBCSN and WWE Network moves may point toward an increased focus on streaming live sports events," said Joe McCormack, an analyst with research company Third Bridge.
How the deal benefits WWE
The three WWE insiders said that WWE's specialty was in its content. Licensing the WWE Network in the US allows it to focus on that rather than managing the streaming service and trying to combat subscriber churn.
And for WWE fans, it will be a good deal. WWE Network cost $10 per month (albeit with a limited free tier), while the ad-supported Peacock Premium costs $5 a month (Peacock Premium Plus costs $10 per month without ads).
"Fans get WWE Network plus everything on Peacock," Amobi said.
But WWE will have to do a better job of promoting its offering than it did with WWE Network, the current WWE staffer said.
He noted that many viewers would pay around $60 for pay-per-view events like "WrestleMania," even though WWE Network was $10 per month and came with thousands of hours of other content, because they "didn't know about an alternative." Or fans would just turn to YouTube to get their WWE fix, where it has more than 72 million subscribers.
The research firm Lightshed Partners was optimistic about the deal in a Tuesday report, saying that "at a lower price and with wider content, more WWE fans are going to subscribe." WWE also has NBCU in its corner now to help with promotion.
"NBCU's goal should be to convert every viewer of Raw," the Lightshed report said. "That show still does around 2 million viewers every Monday, even as ratings have fallen precipitously."
Have more to share? Email the author at [email protected] or DM him on Twitter @TravClark2
Source: Read Full Article