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WWE wrestles with film release strategy

Films flop theatrically but do well on homevid

World Wrestling Entertainment’s film division is starting to show signs of life — just not at the box office so far.

Since deciding to self-finance and distribute its own slate of films earlier this year, WWE stumbled with its first effort, the drama “Legendary,” in September, which earned just $200,000 in theaters. Its follow-up, the comedy “Knucklehead,” received a limited two-day run last weekend before moving onto homevideo today. Walmart distribbed “Legendary” exclusively on DVD, while WWE is going wider with “Knucklehead.”

WWE had co-produced six movies in the past, which were distribbed by Lionsgate and Fox.

In January, the company paired with Samuel Goldwyn Films to release its next eight films, which are lensing back-to-back in Louisiana.

Doing so enables WWE Studios to keep more of the profits, rather than wait for studios to recoup print, advertising and distribution costs first.

The intention had always been to experiment with release windows and to use a limited theatrical run as a marketing tool to promote a quick move to homevideo and encourage overseas plays. The slate WWE Studios is producing is also expected to serve as more high-profile programming for the cable channel that WWE plans to launch as early as next year.

By focusing on homevideo, WWE is turning to a reliable revenue generator.

The company pumps out roughly 23 titles each year, made up mostly of its pay-per-view shows or DVD sets featuring individual wrestlers. Division collected nearly $40 million in coin last year, versus nearly $59 million in 2008, down due to discounted discs.

Even with the downturn in DVD sales, WWE’s homevideo biz is still performing strongly enough that Walmart stepped up to exclusively sell “Legendary,” representing the latest moves by major retailers to lock down exclusives to attract more consumers into their stores.

The bet on “Legendary” paid off, with WWE Studios reporting $3.8 million in revenue from the pic during the last three months. Overall, the film division earned $7.6 million from its seven-film library during the third quarter.

Compare that with the $3.4 million WWE Studios earned during the first quarter, and $700,000 during the second. During those periods, the company had yet to earn a dime from “12 Rounds,” which Fox released in March 2009, and the direct-to-DVD actioner “The Marine 2,” out in December.

Walmart promoted sports drama “Legendary” on Walmart.com in the weeks leading up to its release in September, and gave it front-of-store placement alongside “Iron Man 2” and other high-profile displays inside its revamped home entertainment sections. Pic will be prominently displayed on shelves through the holidays.

“Like with any great retailer, placement equals promotion,” Jim Connelly, WWE’s senior VP of consumer products, told Daily Variety.

For “Knucklehead,” Walmart will step up its campaign around the pic, but exclusive versions of the DVD and Blu-ray also will be sold in other stores like Kmart and FYE in order to give the film wider national distribution, because comedy typically attracts more buyers, Connelly said.

One version of the DVD may include another wrestling DVD, while another may offer an exclusive comicbook, for example. Rental versions are also being distribbed through Redbox and Blockbuster at the same time.

In return, WWE is promoting the exclusive partnerships through its weekly TV shows, live events, magazine and websites and DVD releases.

The move will enable WWE to make a bigger splash with “Knucklehead” during the first 12 weeks, when most new DVDs are sold, Connelly said.

Going forward, Connelly added that WWE will analyze the results of “Legendary” and “Knucklehead” and figure out the release strategy as the next pics near release next year. But for now, it appears as if the future of WWE Studios will play out on the smallscreen.

“Like everybody, we’re testing and measuring results,” he said.

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