411mania.com: Wrestling - The Hamilton Ave Journal 02.11.10: Volume 2

The Editorials section is designed for you, the readers, to respond to the views presented in the Journal, send an important news item, or talk about another overlooked business related item in wrestling. Just beware: the Journal reserves the right to respond back.

From the commentary section last week, Anonymous once again wanted to know about the volume of sales we report each week:

Is there any information available on the types of numbers WWE and TNA move through their online stores? The line about there only being 210 Hogan plaques really surprises me, as I thought TNA would have moved more merchandise through their shop than that. It just got me wondering exactly how much material each company moves.

No, nothing like that is publicly available. If the WWE and/or TNA would allow the Journal access to their backend databases, the Journal would gladly do those queries.

Sticking with merchandise, Jimmy was impressed with the Miz's run in the top selling list:

Ever since his mini-feud with Cena last year, I've thought that The Miz has what it takes to be the next big star in wrestling! I just hope WWE don't change his character beyond recognition like they did with Cena!

Unfortunately for you, the WWE's change of character has made Cena the top seller in the company by far. Of course, it depends a lot on what the Miz can do with the opportunities presented to him.

Sticking in the purchasing venue, TNA's PPV plan seemed at odds with many people's thoughts. First up is Donners:

Unfortunate that TNA PPVs cannot be bought through their site from Australia. Many people here do not have access to the channel which airs their PPVs.

I also wonder how many UK fans will pay $US15, when they could previously see TNA PPVs for free - and still get most WWE ones free.

From what others are saying, not too many. It is a very difficult transition to take a product from being free to being paid, and you will lose people along the way. But if TNA can make more in PPV revenue then they would in broadcast rights fees, then even a smaller audience would be worth it. Since TNA has not traditionally done very much in PPV revenue, though, it would seem that broadcast rights fees would work out more in their favor. This was a point that Brett was confused about:

How would TNA move away from a PPV model?

I suppose they'd do more free shows to generate revenue in some sense but even if they somehow received all the advertising dollars for the program they put on, would it make more than a PPV? Maybe right now it would but in the long term, would it?

Surprisingly, Guest#9613 provided the coherent response:

Right now TNA isn't getting PPV buys. The numbers are such that they may be losing money. The fact that Dixie Carter said that they would have moved away from PPV's if it weren't for existing contracts suggests that they aren't getting much in the way of returns.

So they may not need to replace any revenues. They would be gaining revenues by not losing money. Addition by subtraction.

That is absolutely one way to look at it. The other way is that TNA makes such an amount on PPV revenue that the broadcast rights would actually be a higher (and quicker) form of revenue then the PPVs. In the WWE's case, they could not do that as each PPV generates millions and millions of dollars and no network is going to pay that much for one "episode" of something that is essentially free six hours a week. In TNA's world, they are not dependent on PPV revenue like the WWE is and could actually afford to completely not have it. TNA's biggest areas for growth have always been in their broadcast rights fees which is why they are so gung-ho about getting more shows on the air and into other countries. If they can leverage what they have for new revenue in an area they are successful, it would be a much better direction for them in the long run.

Even looking at WWE's buyrates, it is obvious that PPV is not the future of wrestling. This is why the WWE is trying out a number of other methods of content distribution and are looking into their own channel. Yes, the WWE pioneered PPV and it continues to be extremely profitable for them, but that is not a forever situation. In the WWE portfolio, PPV is going to be taking a much smaller place as the years go on and other forms of delivery will take its place. Why should TNA go into a market that is on the downward trend for their industry when they could skip it all together and go straight for other content delivery methods?

Guest#1260 (in response to another statement) sums up this thought:

Beyond the fact that you hardly know why people are really tuning in, TNA has not been making its money on PPVs anyways. So a measurable gain in ratings is very important. It grows revenues.

People who buy ad time care very much about how many people watch a show and the demographics of the viewing audience. As long as people are watching, they will be exposed to commercials. Breaking down people's motivation in watching may not be of interest to them at all. After all, people weren't tuning into Jackass to see high quality programming. Yet commercial time was still sold.

For TNA, if people actually watch they may be impressed enough to make it a habit. The longer exposure increases the chances of getting them to by PPVs and merch. If they are indeed moving toward a future without PPVs, ratings become their lifeblood.

In business, basing decisions on "I think" and dismissing every consequence is the fast track to unemployment. That is why there are market research teams: "research shows that . . ."

Truer words could never be spoken in the Journal.

Plenty more was written, so be sure to take a look. And if you enjoy the Journal, why not bookmark 411mania.com and make it your home page? You can do that by clicking here.

CLOSING BELL

This concludes Issue #124 (Volume 2) of THE HAMILTON AVE JOURNAL. Join us next week as we get ready to ring the bell again.

Till then!

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Comments (25)

Pretty sure WWE owning NXT changes nothing....

Posted By: HOF 2010 (Guest) on February 10, 2010 at 11:10 PM

Nice column. Very telling of how TNA will (likely) never reach WWE's level.

Posted By: Hindu Friend (Guest) on February 10, 2010 at 11:12 PM

Damn, wwe's always gotta pick pocket someone elses ideas!

Posted By: Guest#1730 (Guest) on February 10, 2010 at 11:59 PM

Pretty sure WWE owning NXT changes nothing....

Posted By: HOF 2010 (Guest) on February 10, 2010 at 11:10 PM

It does in Scotland. Since WWE has/will tradmark the name, SWA can no longer use it for its feeder company. Any attempts to do so will be answered with legal filings.
SWA may claim that they have built up the name recognition and value, but that isn't going to hold. The promotion is less than five years old and by their own admission tours largely in Western Scotland. That isn't even the whole of a country that is smaller than most states in the US. So, unless their is significant home court bias they will lose.
And really, is SWA large enough to even spend time in court? Barristers aren't cheap. The larger import of the VPW example is that WWE may just for SWA to back down or go bankrupt trying to answer accusations.
If they go the last route, WWE may even buy the SWA rights to close all loopholes. Michael Bolton did this to musicians he stole from, so this approach works.

So this changes the entertainment value of WWE's business dealings, if nothing else.

Posted By: Guest#7636 (Guest) on February 11, 2010 at 02:26 AM

Let me pose a question, since this is all about financial matters.

How smart is it to have an all "X-division" PPV?

I'd say not samrt at all considering how many buys that joke is going to get, if it features just spotmonkeys.

Posted By: Goafer Boy (Guest) on February 10, 2010 at 11:09 PM

It can be very smart, depending on the real motive of the decision makers. Even setting aside your personal bias.

First off, TNA does not do much in the way of PPV buys. While there may be many reasons for this, they are contractually bound to provide a PPV shows. So they have to do something. Having a theme show may increase buys. Your tastes aside, many people do like cruiserweight action. They have little to lose, because they have a low buy rate. They may gain. Classic low risk scenario.

Second, Hogan and Bishoff have traditionally not liked cruiserweights. By having an all X-Division show, they can show there isn't enough interest to continue the division. They can even load the dice by not properly supporting the PPV - no properly built up feuds heading into the show, no card announced until late in the game, and jobbing out X-Division wrestlers.
Given the lackluster builds to the last two TNA PPVs, they may not even purposely kill the show, but the effect is the same, none the less.
More important will be who and how the numbers are interpreted. Numbers don't lie, but people have motives.

Posted By: Guest#2044 (Guest) on February 11, 2010 at 02:36 AM

Damn, wwe's always gotta pick pocket someone elses ideas!

Posted By: Guest#1730 (Guest) on February 10, 2010 at 11:59 PM

Its not about who does it first, but who does it best. Or at least markets it the best.

Apple did not create the graphical user interface, the personal computer, or the MP3 player.

Posted By: Guest#7557 (Guest) on February 11, 2010 at 02:36 AM

There's no doubt in my mind that Vince got the idea NXT from the scottish wrestling allliance but they should copyrighted the name because the wrestling business is cut throat especially with vince.

Posted By: DoktorSick (Guest) on February 11, 2010 at 02:58 AM

How many sales of The Miz' shirt can be put up to the fact is says "I'm Awesome"?

I'd love an "I'm Awesome" t-shirt, it would cover my low self-esteem wonderfully.

Posted By: Captain Charisma Carpenter (Guest) on February 11, 2010 at 03:01 AM

Damn, wwe's always gotta pick pocket someone elses ideas!

Posted By: Guest#1730 (Guest) on February 10, 2010 at 11:59 PM

Yeah,because 'NXT' is such a novel name, there's no way WWE could have come up with it by themselves.

Posted By: comment (Guest) on February 11, 2010 at 03:54 AM

How smart is it to have an all "X-division" PPV?

I'd say not samrt at all considering how many buys that joke is going to get, if it features just spotmonkeys.

Posted By: Goafer Boy (Guest) on February 10, 2010 at 11:09 PM

TNA doesn't get many buys as is. If they aren't going to get buys regardless, why not use a show to put over a division of their product that desperately needs the attention?

The X'ers get the rub of having a special event all their own, some guys get the spotlight who normally wouldn't, TNA gets some good will with the IWC crowd for showcasing some of the 'net darlings, and who knows, they just may have a good match or four they can put into the archives. Hell, they might even lay the foundation to birth a star to put on weekly TV with the proper match at this specialized PPV.

All that potential upside for the cost of losing a few buys on a show they're already prepared to take a loss on anyway.

Sure, they could screw the pooch on it like they are apt to do, but it's a very low-risk high-reward scenario for them.

...And you say "spotmonkeys" as if the 'E isn't loaded with them, just a different kind. Punch, punch, kick, rest, signature move, repeat is just as spotty as anything else.

My point is that we're given nothing BUT spotfests by BOTH the WWE and TNA these days, and we haven't had good, psychological, catch-as-catch-can wrestling consistently in the mainstream for decades now. Sure, they'll do a true wrestling contest at WrestleMania, SummerSlam, Bound For Glory, and sporadically every few months, but the vast majority of wrestling today is as spotty as a dalmatian.

Posted By: Gator (Guest) on February 11, 2010 at 04:39 AM

"I'd say not samrt at all"

Oh I see what you did there.

Haha.

Posted By: Guest#9103 (Guest) on February 11, 2010 at 04:50 AM

"Chevy learned this lesson years ago when they tried to release the Nova in Latin America, where "no va" is Spanish for "does not go"."

Afraid you fell for an urban legend there JP: http://www.snopes.com/business/misxlate/nova.asp

Posted By: BringTheNoise (Guest) on February 11, 2010 at 04:53 AM

Well JP the true question then from a Marketing/ Marketer's perspective would be how is it that the UFC is garnering the PPV buys??
Is it the novelty factor thats working for them (as it goes mainstream) i.e. its a passing phase or is it clever marketing in itself (4P's which means the product as well unfortunately for the E and TNA)
Would love to hear both the businessman and the fan in you speak on this.

Posted By: indianguy (Guest) on February 11, 2010 at 11:13 AM

In trademark law, SWA:NXT is on pretty solid ground. They didn't register the trademark, so they can't stop WWE:NXT, but WWE can't shut them down, either, since SWA:NXT was already operating. WWE would have to prove that SWA was piggybacking on WWE:NXT's recognition, selling SWA:NXT as a WWE show.

WWE could try, just banking on SWA not having the money to stay in court. I have no idea if that would work in Britain or not.

Posted By: John Bragg (Guest) on February 11, 2010 at 01:55 PM

"Mr. Bischoff should be less concerned with who to fire on TV this week and more concerned with keeping his marketing up to date."

Ouch! Heh.

Looking forward to your complete Q4 breakdown next week, and indeed for WWE's 2009 in total. I wish TNA had something like this to pick over but hey, they're not public.

Posted By: Ryushinku (Guest) on February 11, 2010 at 02:21 PM

The last time WWE came to Britain and tried to take somebody to court, a bunch of hippy panda lovers battered them back across the Atlantic with their tails between their legs and a court order forcing them to change their name.

It's funny though, because even after all this time, people older than 10 who have a passing interest in wrestling or are just aware of it's existence still refer to it as WWF wrestling. Outside of the IWC, most laymens will still call it WWF, with no repercussions, I might add.

I'm all for a business like WWE shutting down free PPV streams, but worrying about 10 people watching some Glaswegian meth addicts fighting over a ha'penny title belt in the bin store out of the back of Lidls is a bit much.

Bushwacker Luke was supposed to be at an event in a town near me this Saturday. This event is held in a room that doubles as a childrens nursery during the day. It's hardly Madison Square Garden. Last time there was an event there was about 30 people there including the roster.

I doubt if Badd Ass Billy Gunn and RoadDawg Jesse Jammes were booked, there would have been people pondering whether to spend a fiver on a ticket or buy that nifty John Cena orange T shirt for twenty quid.

It's not going to dry the WWE profit pot, is it?

They need to get a fucking grip on reality.

Shit like this just makes me want to go google some torrents of their new DVD releases and download them just for the hell of it.

That puts a dent in the pocket - not advertising a show with the name Bob Holly to a handful of bored people, half of which are probably senile old fools who think they are turning up to see the return of Buddy Holly.

Posted By: The Truth of it All (Guest) on February 11, 2010 at 02:58 PM

I seem to recall reading that the "Billy Gunn" and "Road Dogg" names were no longer owned by WWE as intellectual properties. Granted I think I heard this about 2-3 yrs ago, and I've had concussion #4 since that time...

Posted By: Nate (Guest) on February 11, 2010 at 07:18 PM

John Cena is a huge seller for WWE, what happened to his music career?

Posted By: Guest#6421 (Guest) on February 11, 2010 at 09:10 PM

WWE will lose this lawsuit just like they lost the WWF lawsuit. It's cute that this site has a bunch of WWE marks, but none of you are attorneys and none of you even try to understand copyright/trademark law.

Posted By: Guest#4606 (Guest) on February 11, 2010 at 03:13 PM

Since you can't give a real reason why WWE would lose, I'm guessing you don't know a whole lot either. But maybe you convinced yourself for a short time that you are better than somebody.
Look around your room. Look at your life. Your are not.

Give a real reason, if you can.

Posted By: Guest#1563 (Guest) on February 12, 2010 at 01:14 AM

If TNA can survive without PPV, then they don't need to do PPV, but as long as they aren't losing money on PPV, then they should keep doing them, so they can eventually build up to bigger revenue.

Posted By: texmexcasserole (Guest) on February 11, 2010 at 05:48 PM

Well, yes and no.
WWE makes additional revenues off of their regular roster with their PPVs. Sure, there are extra production costs and payouts, but it adds tremendously to the bottom line.
Because of the buy rates they certainly would have an easier time shopping their product around to networks, above and beyond what their ratings would do. The buys show an enduring and committed audience. Whereas Chuck or Heroes have fan bases that will leave or are otherwise more variable.

The extra money also allows greater risks flexibility in other ventures. Failure is covered, success only adds to WWE's reach.
This also means greater stabilty. WWE has a greater ability to weather changes in viewer taste. TNA, living only on smaller TV revenues does not have this ability unless Panda feels generous.

Ultimately, the extra revenues means that WWE can outbid TNA for any wrestler it wants. This doesn't mean that they will always be successful, but the Million Dollar Man spoke an enduring truth. The smaller downside guarantees and lack of PPV bonus would make it harder to retain key wrestlers if WWE wanted to strip the TNA roster. At the same time, they couldn't offer much to Cena or Orton when their contracts are up.

So lack of revenue reduces the amount of game changing plays.

TNA is therfore more likely to find success in steady growth rather than a sudden turnaround. At the same time, they must successfully identify key assets and lock them down to long term contracts to protect against WWE raids. Any mistakes in that regard are a drag on their financial performance, further reducing their ability to compete.

Something tells me that Hogan and Bishoff are not the slow and steady type.

Posted By: Guest#9105 (Guest) on February 12, 2010 at 01:28 AM

OK Mr Prag, you're the money man. Riddle me this.

Despite it happening in November, Turning Point 2009 still isn't available to buy on DVD - surely not selling PPV DVDs is not a smart business move.

Perhaps they plan to sell it as part of a 3 disk 'Cross the Line' bumper set like last year. If that's the case why isn't that available for pre-order, or hasn't been formally announced.

Also, is it wise to put both Main events from Turning Point on the Best of 2009 DVD if they want to sell Turning Point DVDs?

To summarise - what the fuck is going on from a TNA PPV NTSC DVD POV?

Posted By: Loki (Guest) on February 12, 2010 at 10:40 AM

To summarise - what the fuck is going on from a TNA PPV NTSC DVD POV?

Posted By: Loki (Guest) on February 12, 2010 at 10:40 AM

I'm curious what their DVD sales are. If they can barely sell PPVs, I have to wonder if there is much interest in the resulting DVDs. Maybe it isn't profitable enough to have more than a kid burning a DVD-R and printing a cover based on the PPV poster.

Probably TNA has been so chaotic with Hogan and Bishoff that they have let too many things slide. Though if Eric is such a business man, you would think he would straighten out his revenue streams.

Posted By: Guest#4059 (Guest) on February 13, 2010 at 02:01 PM