Open Letter #1 -- The WWE Network and the Abundance of Talent

WWE is in trouble. Financially speaking, the company's stock lost more than half its value last week. Creatively speaking, the company has lost focus and direction, and has forgotten how to create characters that connect with its fans, and without those characters, financial success will not return. The following are a few thoughts on what needs to happen for the company to turn around.

The WWE Network

The drop in stock price last week is believed to have been caused by a double-whammy of statements made by the company involving the new WWE Network. The first blow was that even though the company had previously predicted a break-even at 1,000,000 subscribers to the WWE Network, the company will be losing millions of dollars; break-even is now slated to be at 1.5 Million subscribers. The second major blow was the announcement that WWE's broadcasting deal with NBC Universal only got it a 70% increase in revenue; Vince McMahon had previously suggested a 150% increase in revenue generated from such a deal. This involved the WWE Network to the extent that it is intimated that the launch of the WWE Network hampered WWE's negotiating leverage with NBC Universal.

One thing that needs to be made perfectly clear is that the WWE Network is the smart move and the right move. Several stories are suggesting that WWE executives all of a sudden want to pull the plug on the WWE Network. Not only would such a move be foolish because of how much time and money has already been invested in the infrastructure and support needed to launch such an endeavor, but even more so because streaming content is the future of television viewing.

A small history lesson -- broadcast television started with, as most of us know, a signal being broadcast by a local television station over the air to antennas that would receive the signal in people's homes. Though, the broadcast signals did not reach much folks outside of big city areas, so cable came along to rebroadcast the over the air signals to remote areas. Cable and broadcast television have been the ways people have gotten their television signals for the last several decades. But with the spread of high speed Internet across the country, Americans now have a different way of receiving high-bandwidth content into their homes. Over the last few years, we have seen services like Netflix, Amazon Prime, Hulu and others come out of nowhere to become major forces when it comes to providing television content to consumers; they have even started to produce their own, exclusive shows.

So where does this leave the state of broadcast and cable television? While streaming services, like those mentioned above, only have a small percentage of the customer base of cable companies like Time Warner and Comcast, the fact of the matter is that there is simply no need for over the air (broadcast) and cable services to exist any longer. Assuming every, if not most, Americans have a high-speed Internet connection, they are able to access the same television content that way; there is simply no need for bunny ears to receive a television signal over the air, or to pay an extra fee for cable service that provides the same content accessible online. Over the air broadcast signals will probably be terminated sooner than later, and if the government is wise in its use of the spectrum, it will allocate that spectrum for cheap or free Internet service (which, as a side-note, is why Aereo is a dying technology before it has even had a major go at it), and cable is simply a redundant service, outside of the fact that the same transmission lines also provide Internet service. At the end of it all, the concept of TV as we know it, with networks owning certain channels in local broadcast areas, with their content being distributed by local affiliates, and in certain instances, being rebroadcast via cable providers, is all but dead.

So -- back to the WWE Network. The WWE Network is ahead of the times, but not by much. It would be a horrible move to can the project now that it is full steam ahead. Once WWE expands the user-base internationally, I believe it will well-surpass its goal of 1.5 Million subscribers. The problem with the WWE Network's introduction, however, as many have noted, was its timing --- right before the contract with NBC Universal was set to be re-negotiated. Understanding the history and future of television broadcast technology is important, because it provides insight as to why WWE lost some of its leverage in the negotiations.

From a television perspective (i.e., leaving the movie business aside), the value of NBC Universal, and in fact all television 'networks,' is dropping fast. As discussed, the value of being able to broadcast an over the air signal via local affiliate stations is declining at an exponential rate because most homeowners no longer use an over the air signal to watch television. And the value of NBC as a 'Network' on a cable service is heading south as well (and in this particular scenario, the fact that NBC is owned by Comcast, the largest cable provider in the U.S. is quite poignant). So what is left to NBC as a brand? The only thing it can grasp onto is content -- if it has the exclusive distribution and broadcast rights to good content, it will continue to survive, at least for a little bit longer; not as Channel 4, or whatever it might be in your local area, but as a package of branded television content.

When WWE launched the WWE Network, it raised a red flag at NBC. The WWE Network is a sign that WWE wants to deliver and distribute its own content, i.e., without having third parties such as NBC involved. If WWE's prerogative is to deliver its own content, and if NBC Universal is grasping at straws to protect its content distribution rights, surely NBC is going to have a negative reaction. Indeed, that is also why companies like Dish Network and Direct TV, two other services that are as useless today as a cable provider, dropped WWE's pay-per-view distribution. The last straw that broadcasters are holding onto is content, and if you even balk at taking that away from them, they are going to have a visceral reaction because they are trying to protect whatever they have left in what is clearly a losing game on their end.

The bottom line, though, is that WWE is doing the right thing with its WWE Network. It needs to continue to expand its service to other countries as quickly as possible to reach the numbers that it needs, and it needs to, if at all possible, bring its flagship Raw and Smackdown shows to the service at more accessible time. Given, the deal with NBC likely limited its capabilities in that area, but let's hope that there is some wiggle-room in the contract to at least allow replays of the content sooner than what appears on third-party services like Hulu Plus.

Character Development

WWE's main product is not wrestling; sure two guys can fight in a ring and show some athletic talent, but that is not what brings money in the door (just ask TNA). What draws viewers to TV shows, fans to live matches and customers to toy stores is a good storyline involving characters in which consumers are emotionally invested. It is not enough to give someone a gimmick and leave it at that; the Bray Wyatt character appears to be the portrayal a cult leader from the south with two of his gruff followers. He has great music, knows how to cut a promo, and is a phenomenal athlete for a man of his size and build. Yet, his feud with John Cena has not intrigued fans, outside of the fact that many older male viewers have taken a dislike for the near-comic-book hero character portrayed by John Cena, and just want to see him get beaten up. For the less hardcore fan, however, there has never truly been an explanation why a cult leader from the stix is beating up this comic book hero. Sure, one's a good guy and one's a bad guy, but other than that, almost nothing in the feud has made sense. Indeed, previous feuds involving the Wyatt's -- kidnapping Kane, and Daniel Bryan joining the Wyatt Family -- have been intriguing, but they never followed through; we never understood why the Wyatt's were pursuing Kane and what happened to him after he was abducted, and we never understood why the Wyatt's had a beef with Daniel Bryan in the first place. You can put matches together, but if there is no logical explanation and proper follow-through of ideas and no development of characters, fans are not going to have any investment in the characters that are being put on their screens.

The biggest example of where WWE is falling short is with NXT (its developmental system), specifically when it calls up talent from NXT to the main rosters of Raw and Smackdown.


NXT, on its own, is actually run quite well for what it is. Developmental talent receive gimmicks which they can then present on TV and develop before a small audience at Full Sail University through matches and promos. Under the guise of Dusty Rhodes, there are clearly some terrific prospects, including several that have already been called up to the main roster; some of my favorites still down in NXT are Enzo Amore (currently out with an injury) and Big Cass, and Tyler Breeze. Of course, there are characters that still need some fine-tuning, such as Corey Graves, and Aiden English, and others that will never make it, or should have been dumped a long time ago, e.g., CJ Parker, and the Ascension. But all in all, NXT has served its purpose of giving developmental talents new identities and a platform to fully envelop themselves in those personas to the best extent possible.

The problems come, however, when NXT talent who have proven themselves are called up to the main roster. The personas given to those in NXT are either scrapped entirely or remain stagnant with no development. There are, sadly, a large number of examples to go through ---

- Big E Langston (now just 'Big E') had a great gimmick in NXT with his 5-Count, but for whatever reason, that gimmick never made its way to Raw or Smackdown. So when Big E won the Intercontinental Title, no one seemed to care. Contrast that with the reaction Big E got this week on the NXT TV taping when he returned to the 5-Count gimmick

- Xavier Woods, who seemed to be portraying some sort of 90's throwback character in NXT, was called up to the main roster and is known for being friends with R-Truth, and stealing the entrance music of Brodus Clay. The guy's a phenomenal talent, as was shown in his time in TNA, but whatever gimmick he was given in NXT was thrown out the door once he arrived on the main roster, and there is no reason for fans to invest in his character whatsoever...indeed, what is the character in which to invest?

- Paige, who is again a phenomenal wrestler, had a great run in NXT using an anti-diva gimmick, which was helped tremendously by William Regal on commentary, explaining her wrestling heritage and background. Yet when she came to the main roster, aside from retaining the same look and trademark scream, her gimmick all but disappeared. In fact, on her Raw debut, she came out to 'congratulate' AJ Lee on her recent victory. The Anti-Diva does not come out to congratulate someone, especially a heel; she takes what she wants, when she wants it, and steps on those who stand in her way. She was introduced to the world as a weak, pasty white girl who won the Divas championship on a fluke. Oh, and she likes to scream.

- Emma had an interesting gimmick in NXT of an awkward dancer. Through several months of matches, she was able to endear herself to the NXT fans, but, along the way, was also able to show off her great in-ring talent. Since being called up to the main roster, instead of being showcased as a strong female wrestling talent, she has been made into Santino's sidekick and a bit of humor for children.

- Adam Rose was recently introduced after a few weeks of promo videos, but he has come out on TV for the last few weeks, and done the same routine. It's cute and all, but after that happens for more than a week or two, fans, including myself, get bored. We want to know more about Adam Rose and what makes him tick. The fun music and cool catchphrases will only last so long before the character becomes stagnant and fans lose interest, which is already happening.

An online commentator recently said that he believed a large part of the problem with these NXT talents is that when they are in NXT, they only have to deal with a small crowd with which to connect, and that they're having problems connecting with the larger arenas. But I would argue that the problems with these new talents has nothing to do with the talents themselves --- each one of them mentioned is great both athletically and as a performer. The problem, as is evidenced by the Wyatt feud with John Cena, and all of these NXT talents, is the writing and booking that is going on on Raw and Smackdown. NXT actually has it right - talents are being given gimmicks, are being given time on promos to develop their characters, and, in some situations, are given feuds where we can see those characters develop and broaden. But that is not happening period on Raw and Smackdown, for any talent, NXT or otherwise. Those who are already there are just stagnant (Zack Ryder, Dolph Ziggler, The Miz, Kofi Kingston, Cody Rhodes, The Usos, and the list goes on...) and those that are being introduced are just on their way to the same limbo-fate.

The question is, why is this happening, and why is NXT doing a better job of creating characters and feuds with depth that ensnare fans? Given, I have no knowledge of what goes on behind the scenes at WWE, and only hear the rumors everyone else does on the Internet. But any outside observer would be hard pressed not to think that the main cause for this disparity is that the main roster writing staff is having to cover nearly eight hours of television time per week. Yes, there are probably different folks covering Raw and Smackdown, but the fact of the matter is that there are only a few people who have the final say on what goes on on all of the shows, and there is only so much time one person can devote to one thing before he needs to move on to the next. Compare that with NXT, which is a one-hour taped television show, with a dedicated booking staff, and a limited roster. The simple numbers show that WWE's main roster booking staff is simply spread too thin; they don't have enough time to invest in the superstars already there that are just sitting in limbo, and they clearly don't have time to do anything for the new talent being called up from NXT. Sadly, the NXT talent is being neglected just as much as everyone else. Investment in new talent is pointless if there is no follow-through.

So to Vince McMahon and the WWE Executives -- keep going strong with the WWE Network; that is the future of television as we know it. But when it comes to your core product, you need to fix your entire booking process. Jim Ross recently stated that the roster has 'no depth'; to the contrary, the roster is replete with talent, but for whatever reason, it is not being utilized properly.