Far too long to post here but a great insight into WWE and comments from all the main players involved in the business side of WWE. Here are some small highlights of this massive article.
"Differing points of view oftentimes help drive the best results," Levesque told me, referencing Vince. "While there are times people across the organization have different opinions on a topic, what we do well is collectively execute once a decision is made." He added, "Vince has been, and continues to be, very supportive of NXT. The fact the he continues to promote performers from NXT to Raw and SmackDown is a clear sign of his support."
But Levesque's vision of what a performer should be doesn't always correlate with what the corporation needs to keep ratings up and money coming in. "He's an old-school guy—a true wrestler," the same senior-level executive told me. "But look at the ratings. Where are the stars? Smart marks love these characters, but that's not the audience that drives a giant business."
Because the profit margin of the network is only in the 10 percent range, WWE needs to boost their subscriber numbers just to survive, let alone sustain growth and keep shareholders happy. "If you get more TV viewers, WWE gets the same amount of money. If you get more network subscribers, WWE gets more money," Harrington told me. "That's a great thing, but the challenge is, where do all these added subscribers come from, especially if TV ratings keep falling?"
Another way to gauge WWE Network's progress is the "churn" numbers, or how many people terminate the service after signing up. For the second quarter of 2016, WWE gained 625,000 total subscribers, but lost 471,000, giving them a net addition of only 153,000.
I was curious to know the total churn numbers since the network's inception. "We don't give those numbers out publicly," George Barrios told me, but according to documents submitted to the SEC, WWE Network has amassed 4,587,000 total accounts since launching in 2014, while 3,076,000 accounts have left the service (leaving us with the current number of active accounts: 1,511,000). That means that 67 percent of accounts that were created were eventually canceled (I refer to them as "accounts" rather than "subscribers" because theoretically one person could sign up and bail more than once, thus skewing the metrics).
WWE boasts having one of the largest fan bases of any sports-entertainment company on social media, with 672 million total followers across all platforms and more than 10 billion total views on YouTube. (If one person follows two different wrestlers on Twitter, however, it counts as two people, so these numbers should be taken with a grain of salt.)
But the financial return of social media (which is lumped into all digital media, minus the network) is incredibly low compared to that of television. Dividing total digital revenue by total number of followers, WWE only makes three cents per online user outside of WWE Network (with a slim operating income of $100,000 for the first half this year) compared to roughly $21 per person for domestic television, with an operating income of roughly $55.5 million during the same period. Moreover, their global views for ad-supported video-on-demand services like YouTube dropped by 300 million from the first to second quarters of 2016, the first decrease in the history of the division.
Despite all their innovation in the digital space, WWE is still beholden to television, which accounted for $231.1 million in revenue in 2015—35 percent of the company's total revenue—and $116.8 million for the first half of 2016, according to SEC filings. Without it, the company would surely drown.
Vince McMahon wanted to remove himself from the grips of television—from having someone else own the vessel through which his product is presented—but his obsession with creating a global media empire might ultimately be his company's undoing. The continued existence of WWE Studios, which produces feature films and other projects, has been bleeding the company of revenue for years. In 2015, the division posted an operating loss of $1.5 million, and only contributed roughly 1 percent to the company's overall annual revenue, according to SEC filings. Now, with WWE Network, the company has nearly all of its eggs in one basket.
"The product, without question, is struggling," a former senior-level executive said. "But he can't fix the problem because it's him—he's the problem."