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#158: The Bird is the Word

#158: The Bird is the Word
By Ernest Wilkins • Issue #169 • View online

Yesterday, World Wrestling Entertainment announced that the WWE Network – their subscription video-on-demand (SVOD) service founded in 2014 – would become exclusive to the Comcast-owned streaming service Peacock beginning in March. Execs would not discuss the five-year deal’s financial details, but it is said to be worth more than $1B. On its face, this looks simple enough. Streaming services need content and, more importantly, content that keeps viewers on their platforms. Yes, a streaming service licensing a content library isn’t exactly shocking news. Still, this one is different because it signifies that this “fake” sport makes a genuine impact in the media world.
Everything is Wrestling
Like soap operas and news programs, professional wrestling has been on TV since TV started. The undisputed global #1 promotion is still WWE. The company has seen many ups and downs since the glory days of Hulk Hogan, the Ultimate Warrior, and “Macho Man” Randy Savage in the 80s. After several high-profile scandals, the company became the darling of Gen X and early Millennials a decade later with the rise of now-household names like Stone Cold Steve Austin, The Undertaker, and Dwayne “The Rock” Johnson. Since then, the company has been known more for scandals than suplexes. 
Dan McQuade
“Stone Cold” Steve Austin has stunned 46 percent of the people in this photo, including the president. https://t.co/GKkz0cjB5d
Wait, people still watch pro wrestling? 
You better believe it. WWE’s numbers aren’t where they used to be, but they maintain a consistent and loyal audience that spends, spends, spends. Speaking of audiences, WWE is one of the most culturally relevant brands in American history. The company produced 8 of the ten highest-attended pro wrestling events in history, including the only pro-wrestling event in the Western hemisphere to draw over 100,000 fans (2016’s Wrestlemania 32, which did 101,736 at Dallas/Arlington’s AT&T Stadium). If you expand out of the world of wrestling, WWE still holds its owN. Out of the 50 biggest PPV buys in combat sports history, WWE has grossed 8 of them in the last 20 years. We haven’t even touched their already-existing concurrent deal with FOX that brought WWE programming to the FOX network in 2018. That deal was also for over $1 billion.
So to recap, WWE has signed two deals with two different multinational conglomerates for licensing agreements grossing a billion dollars. A piece. 
What does WWE see in Peacock? 
  • More eyes on WWE content.
In a recent interview, WWE President & Chief Revenue Officer Nick Khan laid it out pretty clearly: 
So, I’ll give you an example: Peacock is free in the [24 million] Comcast cable and Cox cable homes, as I’m sure you know, so…for the first time ever, WrestleMania, which is our Super Bowl, is going to be available for free to those homes./ “NBC’s reach will help expand WWE audience." 
  • An old friend.
WWE had been in conversations for this deal with other brands like ESPN, who began covering WWE in its usual mix on shows like Sportscenter recently. What they didn’t have was the nearly three-decade relationship with NBCU that helped seal the deal. WWE and NBC have been working together since the days when Dick Ebersol took over and co-created Saturday Night’s Main Event as a lead-in to Saturday Night Live in the 80s. When Vince McMahon decided to get into the football business and launched the first incarnation of the XFL, it aired on NBC. The company’s flagship program, “Monday Night Raw,” has aired almost-exclusively on Comcast/NBCU-owned cable channel USA Network since it began airing back in 1993. 
What does Peacock see in WWE?
  • One of the most valuable pieces of IP in the world.
Read that again. You want to talk share of culture? WWE owns the most extensive library of professional wrestling content in the world. WWE owns a total of more than 125,000 tapes and more than 130,000 hours of footage of wrestlingThe WWE tape library contains American pro wrestling history, almost in its entirety.
(Fun Fact: the oldest match on the WWE Network is this Killer Kowalski match from 1952).
  • A way to bump those subscriber numbers.
Currently, WWE Network has about 2 million subscribers in the US. Those paid subscribers are paying $9.99 per month. Peacock’s premium service is available to around 25 million Comcast and Cox subscribers at no added cost. Other subscribers pay $4.99 for access – half the price of WWE Network’s current fee. Given the fact that all significant WWE PPV’s – including Wrestlemania – will air on the $4.99 tier, this should translate into a bump for Peacock’s overall subscription numbers since WWE fans will be saving money while getting the same experience, ads-notwithstanding.
My take: 
The world as we know it is changing. I’m changing the Wu-Tang song. The “C” in CREAM now stands for “Content” because where we’re going, the need for content will get interesting quickly. 
In a post on his website, media analyst Matthew Ball broke down the impacts of the COVID-19 pandemic on viewing habits and streaming services. We know that TV was already seeing a gradual shift from pay-TV ( aka cable) to streaming services like Netflix and Hulu — I believe moves like this signal that in 2021, we’re going to see viewers cut out cable as an unnecessary cost, once and for all.
Think about it: We’re all in the house, and we’re all bored as hell. TV viewership is up across the board, but it’s up, and it’s STUCK for streaming services. The most significant streaming services (not counting Amazon Prime) sawan average 75% jump in daily sign-upsafter most states put the shelter-in-place order. I know this won’t last once people get vaccinated and head back outside. Still, I believe the same way people are abandoning cities to live places where their dollar goes farther, people will have to choose whether the paid cable is a necessary expense vs. streaming services. It isn’t looking good for Big Cable.
For WWE, this also gives them a post-Vince McMahon play. The WWE CEO turns 76 this August and for years, people have wondered what will happen when he finally doesn’t kick out for the final three count. I can see the company remaining privately-owned and continuing to do these kinds of licensing deals in the future, and why not? They retain ownership and are free to explore other options once these deals are done. Selfishly, as a longtime fan, I’m also rooting for wrestling as a business. Any investments into it, especially at this scale, should be considered a positive sign for the future. 
TUNES:
New playlists to wrap up January from The King of Very Specific Vibes.
TECH FLEECE SZN: It’s beyond freezing out, so the real ones know what time it is.
Tunes from LNDN DRGS, Big L, Roc Marciano, AZ, and Larry June. Listen WITHOUT shuffling for maximum impact. Fun Fact: This is my shortest playlist ever!
COOL PANDEMIC DINNER PARTY: Put this one at your next pandemic dinner party to make it cool.
Tunes from dvsn, Alan Parsons Project, Brandy, Teenage Priest, SIMPSON, and Chaka Khan. Listen on shuffle!
SAVE THE DATE:
I’m co-hosting a free webinar with Dan Runcie of Trapital Media! We’re breaking down the best hip-hop album rollouts of all time! The best hip-hop rollouts are like blueprints for anyone launching a product. Join us! Sign up here.
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Office Hours with Ernest Wilkins is written and curated by Ernest Wilkins in Chicago, Illinois. He’s really cold right now.
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