by Chris Welch
by Chris Welch
This article first appeared in The Verge.
The moment Disney bet its streaming future on BAMTech was when WWE executives knew they’d have to make big changes to WWE Network, the company’s subscription video service. Years earlier, WWE and BAMTech had spent 10 months building the Network, which offers both on-demand content and 24/7 linear programming, ahead of its flashy CES 2014 debut that featured CEO Vince McMahon and numerous WWE superstars.
Having seen BAMTech help create HBO Now, which reliably streamed Game of Thrones to millions of viewers every week, WWE recruited the company to build a first-of-its-kind service. As part of its monthly $9.99 subscription, WWE Network would let fans live stream the same pay-per-views they had historically paid cable operators as much as $60 per event to see. The service combined that tantalizing deal with WWE’s enormous TV archives and a number of original shows. In April, WWE reported that WWE Network ended the first quarter of 2019 with 1.58 million paying subscribers.
The subscriber count tends to ebb and flow based on the calendar, typically peaking each year around the company’s marquee WrestleMania event. There are no contracts with WWE Network, leaving customers free to come and go as they please. Even so, the move into direct to consumer streaming has been a triumphant victory for McMahon. Until Disney went and complicated things.
A Disney spokesperson told The Verge that the decision to split was mutual and the result of BAMTech evolving into Disney Streaming Services, which has shifted all focus to the company’s own platforms of Disney+, ESPN+, and Hulu.
Either way, WWE faced a crucial decision. It could attempt to take its streaming service — now a significant part of the company’s bottom line — completely in-house under a growing digital product team. The alternative to that gamble was finding new partners that would grant WWE the increased control and ownership that it sought. “We did evaluate it,” Barrios said of going it alone. But in the end, WWE chose to build a new faction with two other companies, Endeavor Streaming and Massive Interactive, that led to the revamped WWE Network experience that launched shortly before SummerSlam last month.
For the Network, Endeavor Streaming was tasked with handling core services like content delivery, transcoding, and customer billing. It already performs similar duties for UFC Fight Pass, the NBA (outside the US), Univision, and others. So the resumé for replacing BAMTech was strong. I spoke with Endeavor chief digital officer Guy Schory, who said the company offers WWE “a level of scale, reliability, and customization that we feel is unique in the marketplace right now.” Schory said Endeavor Streaming “goes well beyond a tech provider” by giving WWE a robust, flexible infrastructure backend that can be customized and tailored to its needs and a content management system capable of handling a vault that spans many decades.
For the customer-facing apps, WWE partnered with Massive Interactive to redesign the entire WWE Network user experience across mobile devices, PCs, and TV. The Network was completely overhauled with much better search capabilities, improved video quality, and a new “superstars” section for tracking WWE performers like Seth Rollins, Kofi Kingston, Becky Lynch, Roman Reigns, and the rest of the company’s roster. Certain devices that ran the old WWE Network, including a few smart TVs, the Xbox 360, and PS3, were left behind as of 2.0. That frustrated some customers, but the service now feels more consistent across platforms, looks far better, and is easier to use as a result of the changes. And WWE got the greater share of control over everything that it wanted.
“The heavy lift is less on the video side. That’s actually fairly straightforward,” Barrios told me when discussing the migration from BAMTech to Endeavor Streaming. “The more difficult lift is all on the data side.” Hitting reset and having users restart from scratch would’ve been simpler, but WWE wanted to preserve things like watchlists and account information. “Our ability to iterate on all of it — on the entire stack — is greatly enhanced. So our users are going to be really, really happy as we continue to roll out some of the things we had to pull back as well as new features and functionality. I think they’re going to be thrilled.”
Barrios highlighted that WWE Network 2.0 is standards-based. It’s powered by HTML5, and video has been upgraded to 1080p from the previous maximum resolution of 720p, which makes for a noticeable improvement to stream quality on TV screens, laptops, and tablets.
Disney, for its part, did everything it could during its last weeks working with WWE to ensure a smooth transition. “Not only were they great operating partners with us and a big part of our success and continuing to evolve the product we did — especially the core services. But even once the decision was made that we were moving, they were terrific,” Barrios said. “They were really supportive for the interim period as we were building the new product and they were really, really helpful during the transition, which is scary, as you can imagine. Those last few days as we were leading up to moving over, the migration, those are scary, nail-biting days, and they were terrific. We made the decision to move off, but [they were] incredibly professional. Michael Paull and his team, I couldn’t speak higher of.”
Barrios touted the Network relaunch as a success, calling it a “night and day” difference compared to when the service first came online in 2014. “It wasn’t as smooth as any one of us would’ve liked. It wasn’t as rigorous,” he said of the original debut five years ago. “To come off, and obviously we’re at the end of the first inning, but to actually make that transition as seamless as we did it, I think it’s a testament to the team,” he said. “WWE has this incredibly talented senior team on the product side, on the core technology side, on the data side, that really drove a re-platforming that we’re super proud of.”
WWE wants to include the same free-to-watch videos you’d find on its mobile app as part of WWE Network everywhere, including on TV devices. “Our free content lived separately from our premium subscription content. They were kind of in different places,” Barrios told me, outlining the Network’s upcoming free streaming option. “What’s coming here soon, in weeks and not months, is the beginning of integration of our free content with our paid content. It’ll be one integrated experience, and what content you can access just depends on what level member you are.”
But WWE has bigger ideas for the future, including a step-up premium subscription that could add exclusive content and even add merchandise and ticketing components.
In-app subscriptions are the status quo, but companies like Apple, Amazon, and Roku have pursued a model of selling subscription “channels” that deeply integrate with their own platforms. For now, WWE has no interest in becoming an Apple TV channel or Prime Video channel. “It becomes a tradeoff of economics, access to data, things of that nature,” Barrios told me. “To be honest with you, it’s not something that we get a lot of commentary on from our audience, from our fans. It’s something we think about. At this point though, that mix of economics and the data is just not something we felt comfortable with.”
WWE Network will be introducing offline downloads — “Download To Go,” Barrios calls the feature — in the near future, letting subscribers watch full-length pay-per-view events or TV shows from WWE, WCW, and ECW anywhere they choose. The feature has long been a top request from subscribers. “I spend a lot of time on planes with bad Wi-Fi,” Barrios joked. “So that’s my personal feature that I definitely want. It’s prioritized on the roadmap.”
But don’t expect WWE pay-per-views to make the switch to 4K anytime soon. The company has run tests and captured live events in 4K, but there’s still no firm timeline on when you’ll be able to stream the spectacle of WrestleMania in 4K and with HDR color.
“4K, I think that will be driven more by the penetration of 4K devices and then 4K consumption. It seems like a century ago, but when we moved to HD 10 years ago or so, we waited until about 25 or 30 percent of the big screens in the homes were HD-capable,” Barrios said. “I think similarly, both from a broadband standpoint (5G driving some of it) as well as the big screen penetration of 4K, when we go 4K kind of will be driven by that. To your point, we’ve experimented with it, but I wouldn’t expect a significant amount of video content in 4K this year certainly.” Endeavor’s Schory said 4K HDR video is on the company’s roadmap for this year, so the option will be there whenever WWE decides it’s time.
With nearly 50 million subscribers, WWE ranks in the world’s top 10 most popular YouTube channels, and the company isn’t shy about trumpeting that achievement. Viewers of Monday Night Raw and SmackDown Live! are regularly reminded that the company has more subscribers than any major sports league.
WWE uploads new videos to YouTube multiple times a day, including key moments from Raw or SmackDown Live each week, the occasional full match, top 10 compilations, and more. But is it possible to be too good at YouTube? If you can catch the highlights on YouTube, why bother watching Raw on USA and put up with commercials? WWE has data showing that some fans prefer their WWE in short form. “We don’t want to lose them,” Barrios said. For similar reasons, WWE produces condensed versions of Monday Night Raw for Hulu on-demand that cut way down on the usual three-hour running time.
“It’s a balance, and we’re really thoughtful. We’ve got a lot of analytics around this about kind of tuning it so that we’re maximizing it for everyone — us and our partners, and also for our fans,” Barrios told me. “We’re really good about where the strategy is today, and we’ve changed it. To most fans, they wouldn’t notice it, I don’t want to be public about what we’ve changed, but we test different things.” This constant balancing of what goes where also applies to side pursuits like UpUpDownDown, the gaming channel led by Austin Creed (WWE superstar Xavier Woods). “You just have to think through that. What are you trying to accomplish with that particular piece of content? That’s how we decide today. It’ll evolve. That’s the one thing I can guarantee.” Barrios told me, “We are now, in essence, a data powerhouse, so we’re fairly sophisticated in how we think about it.”
Preventing YouTube from eating into cable ratings is especially important as WWE approaches its October 4th premiere on the Fox broadcast network. SmackDown Live will leave USA and move to Friday nights at its new home. Fox reportedly paid $1 billion to secure the five-year WWE deal. NBCUniversal is also believed to have agreed to a very large number to keep Monday Night Raw, WWE’s flagship program, right where it is on USA. “We think there’s an immense amount of value and also value for our pay-TV partners, and also reach for our audience, so we think that live content in the pay-TV bundle makes a lot of sense,” Barrios told me. WWE Network might have upended WWE’s traditional pay-per-view revenues, but the company’s weekly live programming is staying put on cable for the foreseeable future.
WWE also jumps at chances to “broaden the brand” on cable with reality shows like Total Divas / Total Bellas, Miz and Mrs, and documentaries. Bill Simmons produced a feature-length documentary on Andre the Giant for HBO last year, and ESPN aired a 30 for 30 about wrestling legend Ric Flair. “We’re lucky we create a lot of content. And we’re very careful about what content fits where,” Barrios said. “It’s an ever-evolving Rubix cube. There are multiple dimensions: there’s geography, there’s platform, there’s the content, there’s different fan segments that you’re doing. So you’re trying to do the best you can on optimizing all four of those. But that’s our job.”
Still, having the plan B of WWE Network undoubtedly helped WWE in negotiations with Fox and USA. Both Raw and SmackDown remain a major ratings asset for the networks, even if viewership has sharply fallen from the lightning-in-a-bottle days when “Stone Cold” Steve Austin and The Rock were the faces of WWE. Just listen to the reaction that Austin got at Madison Square Garden last night — in the year 2019.
More than ratings, WWE now focuses on “time spent” and other engagement metrics. Like Netflix, it’s not lost on WWE that fan attention is more divided than ever, with Fortnite just as much of a threat as other primetime cable shows. “Everybody has a thousand pulls on their time on a daily basis, so you want to keep your eye on everything and try to be as relevant as possible at all times and on every front,” Paul “Triple H” Levesque said on a media call earlier this year.
And WWE is preparing to face its most direct, substantial competition in years from All Elite Wrestling. The new company was founded by Tony Khan, son of Jacksonville Jaguars owner Shahid Khan (who is AEW’s lead investor), and includes former WWE performers Chris Jericho, Dean Ambrose, and Cody Rhodes among others. AEW will debut its own live weekly program on TNT next month. In late August, WWE announced plans to move NXT — its weekly WWE Network show featuring the company’s most promising young superstars — off the service. NXT will be converted into a live show that airs on USA every Wednesday night in the same time slot as AEW.
“Welcome to the game. We’ll see how it goes,” Barrios has said of AEW’s arrival. AEW streams its pay-per-view events on WarnerMedia’s Bleacher Report Live app. It’s currently unknown how the company might eventually fit into HBO Max. AEW is trying to set level expectations, with some saying it’s unrealistic to think the new business will somehow catch up with or topple WWE. But it can be a disrupter, and fans are hoping a new rival will help keep WWE at the top of its game in the same way that WCW did during the “Monday Night Wars” in the ‘90s.
As for WWE Network, WWE is full steam ahead with the new experience and adding new value wherever it can. Barrios made the near-term objectives very clear: “Even better performance, bring back the features that couldn’t be there at launch, bring new features like Download To Go, get both tiers up and running. If by next SummerSlam we’ve done all that, we’re going to feel awesome.”