WWE originally hoped to launch the channel on the basic cable tier and receive a subscription fee of approximately 20 cents per month per subscriber. However, space is limited on most cable and satellite systems and the amount of WWE content already available limited the growth potential of a stand-alone commercial network.
"Clearly the cable operators didn’t view what they brought to market as compelling enough," said Brad Safalow, an analyst with PAA Research who took the organization to task last month during its second-quarter-earnings call for not sharing more information on the network.
WWE is now focusing its efforts on creating a commercial-free, pay-subscription channel similar to HBO and Showtime that consumers would order at their discretion, according to people familiar with the sports-entertainment organization's mindset.
If WWE goes forward with a premium channel, it would likely feature most pay-per-view events on the network to entice people to sign up. The exceptions would be major events, most notably WrestleMania.
"Subscribing to the network would be a 'no brainer' for the company's hardcore fans," Safalow stated in a recent report.
He anticipates a subscription price of $14.95 for the channel and that WWE should be able to instantly garner 400,000 subscribers and almost double that amount in two years. He projects that in 2014, a pay channel could add as much as $141.6 million in revenue to the company.
WWE remains mum on its plans for the network. "The WWE Network in any form is a transformative opportunity if we execute it right," said George Barrios, WWE's Chief Financial Officer. "It is taking the appropriate amount of time for us to identify the best strategic and financial opportunity.”
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