Russo: Trying To Understand WWE's Business Model

It's been some time now since the WWE altered their business model in an effort to monetize maximum capital per head, opposed to expanding their fan base in an effort to bring in, or attract, as many people to their fan base as humanly possible. For those that may not understand, what that simply means is this--let's financially milk the fans we already have to their utmost limit, in lieu of drawing in new fans to add to our bottom line, or revenue stream.

For two years I've been scratching my head over this one for various reason. For starters, in my opinion, the current WWE fan base is a base that has proven to be loyal, no matter how bad the WWE product creatively gets on a weekly basis. Even though the WWE Monday night numbers continue to drop week, after week, at a record pace, the base audience remains loyal, fueled by those who will religiously watch the show as long as the word "wrestling" appears somewhere on the marquee. Now, it would appear on the surface, that if those fans are willing to stand by the product regardless of the mediocrity of it, they would also be ready, willing and able to financially support that same product NO MATTER WHAT. In other words---these are the "You Deserve IT/This is Awesome" base that is buying the t-shirts, DVDs, WWWE Network, house show tickets, Sami Zayn cabbie hats and everything and anything else the company is hawking.

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Simply breaking that down, it means this---Rihanna doesn't have to actually SELL Vince Russo her next album---as a fan boy I'm buying it no matter how good, or how bad the reviews tell me it is. I'm loyal to her, I'm loyal to her Brand and I'm going to financially support her as long as I'm monetarily capable of doing so. That's what you call a "fan". Somebody who supports and artist, or a sports team, or a product, or a company by any means necessary. And, quite frankly, it's not difficult to sell to somebody that is willingly looking to forge over their hard, earned cash to you. All you really have to do is churn out product--"MAKE IT AND THEY WILL BUY."

HOWEVER, gaining new fans is not as easy a task. Why? Real simple---now you have to go out and "earn" dollars, opposed to simply have them thrown to you. Attracting new fans means that you have to WORK in a valiant effort to non-fans, or casual fans---over. But, here's the beauty of that---once you win them over, you then nurture them, stroke them, take care of them, until they move up to that next level and begin buying whatever you are selling. The MORE PEOPLE YOU HAVE WATCHING YOUR SHOW, THE MORE POTENTIAL THERE IS TO MAKE INCOME.

It really is quite that simple. The problem is, sometime around the beginning of 2000 . . . the WWE forgot how to create new stars, how to keep existing stars over, and how to INCREASE viewership on a weekly basis as opposed to losing it. Therefore, the easy way out---let's sell as much as we possibly can to those we already have . . . and aren't going anywhere. Personally, to me, the message is----we are going to remain status quo, folks. We aren't going to attempt to broaden our fan base simply because we forgot how to. Our success is simply going to be to rely on milking the cows we already have.

The question? What happens when even those cows stop grazing? What happens when as they grow older, and mature, and begin to realize that diving off the top rope of a wrestling ring and being caught by the waiting hands of three, or four below . . . is no longer the be all, end all? Who is left to replace those people with? The answer is right there---NOBODY---which clearly explains to anybody with a shred of brain matter in their head . . . that's why the wrestling ratings are sinking, that's why wrestling now only appeals to a niche market and that's why the WWE is slowly, but surely signing their own death certificate.

What it all comes down to is this: no matter who you are, or what your occupation is on a professional level, it's takes hard work to succeed and be successful. And, unfortunately, once you get there . . . it's even harder to stay there. You can rest on your laurels for so long, but after a while, if you don't get back on track, back on the top of your game through good old blood, sweat and tears . . . you are simply going to become yesterdays news. That's where the WWE is currently at. The failure to improve, take chances and change with the times, is turning their business into a dinosaur. It's making their product irrelevant to the masses. The numbers are telling you that all the flip, flop and flying in an effort to cater to those---WHO ARE ALREADY BUYING--isn't going to change that.

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