Backed by a multimillion dollar marketing campaign, World Wrestling Entertainment is hoping its March 14 WrestleMania XX pay-per-view event can return the company to its buy-rate and revenue glory of the 1980s and 1990s.
Once considered a monthly revenue juggernaut, the franchise has slumped over the last 18 months, along with the rest of the PPV event category.
One only has to look at the performance of the WWE's biggest PPV event of the year.
In 2000, WrestleMania
drew 1.07 million PPV buys, but in the following years the event has failed to come close to matching that lofty total. Last year, the event managed a respectable, but somewhat disappointing 660,000 buys (see chart, page 32).
The company's monthly PPV events have suffered similar declines — experiencing drops of 25-50% cumulatively since 2000, according to operators — even as the franchise has cornered the pro wrestling market. In 2001, WWE (then called the World Wrestling Federation) purchased its main competitor, Turner Broadcasting System Inc.'s World Championship Wrestling organization.
The WWE's once-formidable Monday night Raw
franchise on Spike TV has also taken a ratings hit.
Since 2000 when the series' household ratings hit a 5.08 mark, its performance has declined each year, according to the network.
This year from January through March 1, the series has averaged a 3.72 rating, said the network.
Some experts believe that in purchasing WCW, WWE may have taken its eye off the day-to-day business.
"The process of integrating the old WCW was difficult and I think they were very busy doing that business," In Demand CEO Steve Brenner said.
"But I think the McMahons [the WWE's ruling family, headed by chairman Vince] are completely focused now on product development in making sure the entertainment value of that product is not their primary concern, but their only concern."
Indeed, WWE executive vice president of marketing Kurt Schneider said the 20th anniversary of WrestleMania is expected to perform significantly higher than recent PPV shows. In an effort to maximize exposure for the event, the company has been promoting it for the last nine months through various platforms, including its weekly cable and broadcast-network shows.
In fact, the company has used WrestleMania XX to boost the appeal of its Raw and Smackdown!
franchises on Spike TV and UPN, respectively.
Last year, the WWE began branding both programs as separate entities — including alternating its monthly PPV events to feature each of the group's wrestlers.
Those campaigns will continue after WrestleMania
"Those are ongoing branding campaigns that seek to differentiate the two and to build their own individual brand identities," said Schneider.
More importantly for WWE, the unusually long marketing campaign trumpeting WrestleMania XX
was also developed to help remind operators that the company is still worthy of its attention
— and its marketing inventory. Over the last two or three years, Schneider said, the WWE has lost precious ad inventory within local systems to emerging technologies such as video-on-demand, subscription VOD and high-speed Internet services.
"Our whole goal was to go out and say we still deserve the right share of the marketing from you, because we still deliver a huge amount of revenue for you, month in and month out," Schneider said.
PPV events face more competition for valuable marketing dollars and ad inventory than in previous years, admitted Cox Communications Inc. manger of PPV and VOD marketing Denise Myers, but she added that the WWE still gets significant promotional attention on the system level.
"The effort has been more of a targeted one," she said. "We're looking at those consumers who are interested in the product and who are purchasing the product and advertising to them, rather than delivering a more broad message."
The WWE has struggled in recent years to build momentum for its PPV events through its road shows and television programs, she added.
"They did a very good job creating a soap-opera type environment [on cable] that got people excited and willing to spend incremental dollars to see these events," she said. "I'm not sure where that is today. But I've seen that interest level fall off, so some of that built-in promotion that was there isn't as strong or relevant to the consumer. And that has directly translated into the decision process of whether or not they'll spend an extra $30 or $40 to watch PPV."
A Time Warner Cable PPV executive who wished to remain anonymous also lamented the decline in performance of WWE events, but said that the franchise remains one of the strongest revenue generators in the event category.
To help curry favor with operators, Schneider said the WWE last year rolled out an expansive affiliate road show to talk to operators about the value WWE provides.
In addition, the grappling group offered operators 1 million direct-mail pieces to promote the event. Other incentives included a buyer incentive program in which purchasers of the organization's monthly events received a set of WWE trading cards.
On the satellite side, the WWE teamed with DirecTV Inc. to offer a $20 discount to viewers who purchased the first three PPV events of 2004, including WrestleMania. The three events retailed for a combined $118.
"We're also developing a TiVo [Inc.] showcase program to download directly to TiVo [digital video recorder] subscribers," Schneider said.
The WWE also offered a similar promotion with EchoStar Communications Corp. Dish Network subscribers who ordered the three shows were entered into a sweepstakes that will award prizes.
Later this year, WWE will introduce two new PPV events to bring its total yearly live event distribution to 14.
Through its concerted effort to reach out to operators, Schneider is hopeful the industry will once again get behind the WWE franchise.
"We've returned more than $1.7 billion that we've generated for the industry over our lifetime," Schneider said. "For us, it's a chance to say that even though PPV might be losing some [market] share to SVOD and DVD, month in and month out you can count on WWE to deliver revenue with a live event."
In the final marketing blitz behind WrestleMania XX, WWE is spending more than $5 million on a campaign mixing traditional national media with local ads, street-level guerilla marketing tactics and a grassroots tour.
Using the tagline, "WrestleMania XX: Where It All Begins … Again" WWE is placing ads in the last few weeks leading up to the event in such print magazines as Sports Illustrated, Entertainment Weekly, D.C. Comics titles and Mad magazine, Schneider said.
On the television side, WWE has purchased ads on TBS Superstation and Turner Network Television, as well as within Cartoon Network's "Adult Swim" late-night block.
In select markets, WWE is also placing Wrestlemania XX-branded materials on outdoor billboards, taxi tops, bus shelters, trash receptacles, graffiti murals and pizza-delivery boxes.
"We will spend our money across a number of vehicles," Schneider said. "Instead of doing one big ad that hits people once, we want to get into people's lives."
The WWE is banking that the event will jump-start the franchise and once again place it top of mind for longtime fans, while attracting a new generation of viewers.
"[The promotion] is a hook to re-energize the PPV industry," Schneider said.
"We're using it as another enticement to bring new people into the franchise. So this is a platform event to set us up for the future by leveraging the aura of WrestleMania XX so that will watch us into the future."
He would not speculate on a final buy rate, but did say the show should beat last year's 630,000 take.
"This year's PPV buys for us have beaten the prior year, especially since we've debuted single brands. If that gives us any indication, I think we're in for something good."
Given pro wrestling's cyclical nature, In Demand's Brenner added that one should never count the WWE out.
"Every time they seem to drop a little they seem to come back even stronger," he said. "There's a lot of creative energy, talent and showmanship, and I expect to see them flourishing again."