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PPV makes a comeback

WWE's pay-per-view biz is up 5% for the year

Could an uptick in pay-per-view buys be the latest sign that the economy is on the rebound?

The recession forced more consumers to stay home, which helped boost ratings for high-profile events like the Oscars, Golden Globes, Emmys, Grammys, Super Bowl and the Winter Olympics.

But that same audience is starting to pony up for programming, as well.

World Wrestling Entertainment, which will produce 13 pay-per-view specials this year, including this weekend’s WrestleMania, its biggest event, had been hit hard by consumers opting to seek out free entertainment rather than spend $45 for a three-hour show.

But that’s reversed over the past three months, with WWE’s pay-per-view biz up 5% for the year. It had already enjoyed a significant increase in sales during the fourth quarter, when three shows sold 85,000 more buys than the previous year. A fourth, “Survivor Series,” fell off by 84,000, however.

Still that’s encouraging news for WWE, which generates 18% of its annual business from PPV sales, and earned $11 million less from PPV sales in 2009 than in ’08. WWE usually ranks behind HBO and UFC in PPV buys.

What’s helped is not only the economy, but a change in its lineup of PPV specials, WWE executives told Daily Variety.

It retooled many of its events and created themes that aimed to help them stand out and appeal to WWE’s changing audience, which includes more women (around 36%) and kids (20% are under 18 years old) now that its weekly TV shows are PG. Its PPVS are also offered by more carriers overseas, including five in Mexico, increasing international audiences, who preferred more high-concept events.

For example, “One Night Stand” was changed to “Extreme Rules,” “No Way Out” became “Elimination Chamber,” featuring a massive cage, and “Armageddon” turned into “TLC,” to revolve around tables, ladders and chair matches. “Cyber Sunday” evolved into “SmackDown vs. Raw,” which pits its two top performing TV shows each week against each other. Meanwhile, the spookier “Hell in a Cell” takes place in October.

“When we were just looking at the numbers, when there was a theme and a hook to the pay-per-view, our fans understood it and got excited by it,” said Michelle Wilson, executive VP of marketing, who oversees the company’s PPV biz at World Wrestling Entertainment.

The introduction of “Bragging Rights” sent buys up 20% over the previous year because “it was a new theme and something our fans hadn’t seen before,” Wilson said.

While four new PPVs will be rolled out this year, WrestleMania, Summer Slam, Royal Rumble won’t be touched. “Survivor Series,” however will get retooled, because of its eroding sales.

“If something gets tired or old, it’s something we have to look at,” Wilson said. “It’s just like any entertainment property. It’s crucial to continue to reinvent yourself. “WWE fans will tell you right away if they like it or don’t like it and if it’s something they don’t want, we don’t do it again.”

But WWE also realized it needed more time to build storylines and market the events. It eliminated one PPV during this year’s roster to do so. All shows get at least a four-week build up now.

“Building intrigue is something that sells pay-per-views,” Wilson says.

But consumers are also changing the way they buy and watch PPVs.

To work around a price increase (they rose from $39.95 to $44.95), more groups are pooling their money and buying the events to watch together, rather than individually shelling out the money to order the shows. In the past, four people watched each PPV; that’s gone up significantly, which could help boost buys once the economy has fully recovered.

“In the end, we have more people watching our pay-per-views,” Wilson said.

Of course, the big test will be WrestleMania 26, which takes place March 28 from Glendale, Arizona’s University of Phoenix Stadium. It sells at a premium price of $55 (up $10 from previous years), with some selling it more for the HD broadcast.

The show, which is WWE’s version of the Super Bowl, with a series of high-profile bouts, generated $21 million in PPV sales from 975,000 buys, when it was hosted in Houston, higher than expected given the increase in price for the show and the ongoing recession. WrestleMania 24 sold 1.1 million buys, earning $23.8 million from PPVs.

“People don’t have the kind of disposable income that they used to and are staying home,” Wilson said. “We’ve benefited from that.”

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