The stock price is down more than 20% in early trading after the company said that its new online video channel has 667,287 subs — not including “potential failures to comply with subscription terms.” Still, WWE …
UPDATE, 1:01 PM: People who want to subscribe to WWE Network should be able to do so now that the company’s technology partner, Major League Baseball Advanced Media, has worked through the launch-day crush. Demand for subscriptions “exceeded …
Q&A: MLB Advanced Media CEO Bob Bowman On WWE Network, Sony’s Virtual Pay TV Plans, And What’s Next For Streaming Video
The new year has barely started, yet I already have a candidate for the eventual list of 2014′s most influential media execs: MLB Advanced Media CEO Bob Bowman. His sports-focused streaming video and Internet operation is poised to become an entertainment power following the announcements at International CES this month that it will drive two potentially ground-breaking new services. On February 24, WWE will launch a subscription-based online video channel, WWE Network, that will include live and on-demand library programming. (Bowman sat on the WWE board from 2003-2008.) And Sony turned heads with its plan to introduce a Web-based pay TV service that will include live programming from channels that are only available now to subscribers of traditional cable, satellite, and telco video services. MLBAM’s state-of-the-art infrastructure already handles live and on-demand streaming for college basketball’s March Madness, CBS Sports, and ESPN3, as well as Glenn Beck’s TheBlaze TV and in 2012 handled Obama for America campaign videos. As its business grows, financial types wonder whether baseball execs might take MLBAM public. So it’s a heady time for Bowman, who became Michigan’s state treasurer in 1983 at age 27 and went on to become COO of ITT Corp. Deadline checked in with the MLBAM chief to find out more about his plans with WWE and Sony, and the prospects for streaming video. Here are his thoughts, edited for length and clarity.
DEADLINE: Why do you consider the WWE Network so noteworthy?
BOWMAN: Economically it’s one of our largest clients for sure. In that sense it’s incredibly important. But what’s more important than dollars is this is the most vertically integrated brand in America. Vince McMahon controls everything soup to nuts — from the idea in his head to how it appears on every screen around the world. And he just demonstrated [at CES] he’s going to try and change what the economic rules are. He’s in an ideal situation to do that. That’s why a lot of the content players are going to watch this very carefully.
The company’s been talking for years about creating a network, but failed to excite cable and satellite distributors. So it now says it will make its WWE Network happen online as a subscription service that will cost $9.99 a month with a six-month commitment. Powered by MLB Advanced Media, the WWE programming will be available on conventional computers, and apps for Apple and Android devices, Amazon’s Kindle Fire, Xbox 360, PlayStation 3 and 4, and Roku — with Xbox One and some Smart TVs following this summer. Customers will be able to watch 12 monthly pay-per-view specials, 1,500 hours of shows from WWE’s library, and several new programs. The network “allows us to transform and reimagine how we deliver our premium live content and 24/7 programming directly to our fans around the world,” CEO Vince McMahon says. “WWE Network will provide transformative growth for our company and unprecedented value for our fans.” The company anticipates as many as 3M subscribers ”based on extensive consumer research and the value proposition for a network that reflects the inclusion of our pay-per-view events, including WrestleMania” and other programming. The company says that about 53% of TV households “have an affinity for WWE content.” If it’s estimate is correct, then it could help WWE generate as much as $350M in additional revenue and “incremental OIBDA [cash flow] between $50 million and $150 million at a ‘steady state.’” Benchmark analyst Mike Hickey is more cautious, saying that by charging $9.99 a month for PPV specials that cost $44.95 “will cut into WWE’s revenue in the short term” although the company could “make it up over time as the network’s subscriber base increases.” WWE shares have appreciated nearly 52% over the last three months, and are up about 1% today.