Originally Posted by JasonWatkins:
“The cost isn't the issue, it's the fact that DA's advertisers are supposed to have refused to have their adverts screened during TNA's programming and this is part of the reason why DA have allegedly cancelled them.
So if that's the case, why sign another wrestling show and risk more problems with the same advertisers if they don't want to advertise on wrestling shows ?”
Cost is absolutely the issue.
Firstly it should be noted that Destination America is selling ad time during Impact. Some (and its important to note that some does not translate to all) advertisers have requested not to have time during Impact and in fact this may prove to be a somewhat misleading statement given the block buying we're talking about and how that works. I will however avoid that rabbit hole for the time being and instead focus on a couple of key points.
1 – Advertisers requesting not to have time during Impact lowers the Impact revenue generation
2 – Advertisers requesting not to have time during Impact also raises the time and investment Destination America have to put in to sell time to new advertisers
3 – Destination America can't sell time during Impact at the premium they might otherwise like to because advertisers won't pay it.
These three things combine to make it more difficult for Destination America to turn a profit on the TNA product. This, presumably, played a key role in the decision to rather dramatically scale back on the level of TNA content they were airing. It lowers the cost a little, allows them to focus purely on selling time during the two hour Impact block and additionally allows them to use other content that advertisers are happier being associated with to fulfil other obligations. Even with all this if Destination America is struggling or simply isn't making a profit on the TNA deal its easy to understand why they'd want out. However at the same time Impact is their highest rated show and is helping to grow the network and inflate the network average so its easy to understand why despite the problems they might be having with Impact and TNA they wouldn't want out of the wrestling game entirely. The solution then is to find a way to produce the same or similar content at a lower price point that can then turn a profit.
Effectively what Destination America would be hoping for in this scenario is that RoH is able to produce similar (if not better) ratings than TNA but do it at a much lower price point. If they're able to do that then they can continue to grow the network and inflate the average while also having a much easier time turning a profit on the RoH product because it costs them a lot less.
Lets use some very basic and totally made up numbers to illustrate this point.
TNA Impact
Costs $500k per hour
Ad revenue $300k per hour
Total loss $200k per hour
RoH
Costs $100k per hour
Ad revenue $300k per hour
Total gain $200k per hour
In this hypothetical at a lower price point but similar audience level Destination America can go from losing $200k per hour on wrestling to making $200k per hour.
(This of course all assumes that the Destination America isn't entirely happy with TNA reports are true and they may not be)
What also isn't being discussed here is the specific reason why advertisers might not be keen on TNA.
The generic they don't like wrestling potentially holds up for many but its also just as possible that some have very specific issues with TNA either as a brand (the TNA name is horribly off putting) or as content. It leans much more toward the extreme violence, blood and language of the Attitude Era than WWE PG rated content does and that's potentially something that can greatly concern advertisers who aren't keen on the idea of wrestling in the first place. Its entirely possible that replacing TNA with a more advertiser friendly brand and product solves some of the advertiser relation problems they're having. Although again some does not translate to all.