wrestling / Columns
The Hamilton Ave Journal 01.26.08: Volume 1 – Issue 18
THE HAMILTON AVE JOURNAL
By JP Prag
Volume 1 – Issue 18
ABOUT THE JOURNAL
The Hamilton Ave Journal is the only wrestling news report focused solely on the business of wrestling. Here in the Journal we not only look at the stories that are important to the investor and business-minded person, but also delve deeper into stories that most fans of wrestling would overlook. That is because the Journal is about getting the heart of the matters that affect the companies and outlooks of the wrestling world.
And where is Hamilton Ave? That is the location of the WWE Production Studio in Stamford, CT, and thus the most powerful place in the wrestling world. Besides, The East Main Street Journal just does not have the right ring to it.
Who am I? I am JP Prag: consultant, entrepreneur, businessman, journalist, and wrestling fan.
Now, ring the bell because the market is open.
WHAT’S NEWS
The Journal’s front page area known as What’s News isn’t just about telling you what has happened. The stories in this section are about what will have an effect on the wrestling industry, individual federations, and the wallets of the fans.
LEAD STORY: HD kickoff
This week marked the premier of WWE HD programming starting with RAW on Monday. This was accompanied by a new set that will be used for all shows. The set is made to be more interactive molded so that each show can have a unique look without having to truck around a variety of different displays. This new set will actually save the WWE on shipping and storage costs, another benefit.
The programs went through with only minor technical difficulties. A lot of thought, work, and planning went into this move that took over five years to complete.
Although HD technology has been available commercially since 1998 (first developed in 1958 USSR), the market was not yet ready for it and the supporting technology was not there. Mike Grossman, WWE’s Senior Vice President of Television Operations had this to say:
“It seems like the technology is in place now to make the move. We also waited for the technology to mature. We wanted some of the format issues to mature.”
Five years ago, Grossman and his team began to explore the option of HD when they wanted to upgrade the already existing yet antiquating production equipment and production truck. At the time, with few networks providing HD feeds, equipment being expensive, and home distribution scarce, the WWE did not see the move as prudent. But they did believe that the technology would continue to grow and only did minor upgrades to existing equipment so they could wait to see the results of HD growth.
In 2005 when it became apparent that the HD format was going forward and President Bush signed the “Digital Television Transition and Public Safety Act of 2005” (making HD the defacto format starting February 17, 2009), the WWE began testing the new format. In late 2006, the WWE held a live event at the Mohegan Sun Casino in Connecticut. The show had the full RAW set, pyro, lighting, and sound systems but was shot with rented HD cameras and production trucks.
The reports after the show were not good. Rumors stated that Vince McMahon and many other were upset with how the product looked in HD, but they knew they had no choice but to continue moving forward. Duncan Leslie, Vice President of Technical Events Operations, stated:
“We learned the duality of HD… how unforgiving HD can be, but also how magnificent our programming looked in it. We took a lot of lessons from that night.”
And:
“What we learned from the technical vantage point was the immensity and enormity of the task in front of us.”
Of course, there was a lot of work and a lot of new equipment to buy, lease, and develop. Mr. Leslie went on to say:
“We went from doing the show the same way for a number of years, in the same truck, to having to reinvent everything. All the infrastructure had to change. It’s sort of like going from black & white to color.”
Additionally:
“There’s nowhere to hide. Every T-shirt in the audience can be read. Every bead of sweat, every scratch on the canvas is seen. What you see through the HD lens, you’d see with your eyes live.”
With so much training and development ahead of them, the WWE certainly took on a monumental task. Instead of introducing elements slowly over time (new set, new lights, new audio, then new video, etc…), the WWE chose to do everything at once. The entire process cost the company $20 million dollars, explaining many of the changes in cash reserves seen over the years.
TNA is not yet in the WWE’s position and has not done five years of testing as they have. Because of that, TNA may have many unexpected expenses that will cost the company dearly as they try to create a positive bottom line. They can continue to record in standard definition, but it may hurt their product in the long run. On the other hand, WCW used camera that captured nearly half of the colors that WWE cameras did, and it did not hurt their product during the nearly two-year ratings winning streak. As time moves on, though, and more “regular” programming like sitcoms and game shows move over to HD, TNA will have to make the jump and the expense to look nominal in a competitive market.
Meanwhile, the WWE still has many decisions to consider. Mr. Grossman commented that the WWE has not decided how they are going to distribute high definition DVDs. With the Royal Rumble tomorrow being the first WWE PPV broadcast in HD, decisions will have to made quickly. The WWE must either chose to go with HD-DVD or Blu-Ray format, or produce discs in both formats. At this time, though, they have no experience in either and may find stumbling blocks just as they did in their initial broadcasts.
WWE finds new distribution channel in Canada
In correlation to the HD upgrades noted above, the WWE has added an important distribution partner. Toronto, ON, Canada based “Cineplex Entertainment” has 131 theaters and 1327 screens in its home country. Many of those screens also include digital projectors, something the WWE intends to take advantage of.
Carl DeMarco—President of WWE Canada, Latin America, and China—stated in a press release that fans will be able to view PPVs in full HD format for $13.95 + tax.
“Blast Zones” have been a popular and important part of WWE distribution in the past. Many fans do not want to or do not have the means to spend $39.95 per PPV or have looked for a more social atmosphere to view the events. Various bars, clubs, and other venues have played host to WWE’s events in the past. These locations would usually charge some type of cover charge of which the WWE received a cut or the WWE charged a higher rate for the location to play the event to a larger audience and it was up to the blast zone to recoup the cost. This is a similar model to how WWE programming works today where the networks pay the WWE a set fee and then the networks have to sell advertising time to recoup their costs.
Continuing to find more venues and unique ways to attract and maintain an audience will be important in holding on to market share in a continually diversifying landscape. With PPV buys continuing to drop, find other avenues like this will be important in replacing lost revenue.
Newsbites
In other wrestling related news in the business world:
MARKETPLACE
In the Marketplace we look at the trends in television ratings. This section is less for critical analysis by the Journal but more for the reader to see what is really going on and to draw their own conclusions.
As with stocks, here in the Journal we track the progress of television ratings. If ratings are the barometer by which we judge the product, then over the course of 52 weeks we should be able to see patterns, trends, and anomalies. Please note that gaps in the chart below are due to data not being released/available.
For the week ending Thursday January 24, 2008, here are the current standings of our shows:
RAW
Close (This Week’s Rating): 3.5
Open (Last Week’s Rating): 3.6
Percentage Change: ▼ 2.8%
52-Week High: 4.3
52-Week Low: 2.5
All Time High: 8.1
All Time Low: 1.8
SmackDown!*
Close (This Week’s Rating): 2.8
Open (Last Week’s Rating): 2.8
Percentage Change: UNCH
52-Week High: 3.3
52-Week Low: 2.2
All Time High: 5.8
All Time Low: 1.0
* SmackDown! ratings may include fast overnight if final ratings are not posted. Also, SmackDown! ratings are for the prior week as overnights are not available before this article goes to print.
ECW
Close (This Week’s Rating): 1.3
Open (Last Week’s Rating): 1.2
Percentage Change: ▲ 8.3%
52-Week High: 2.3
52-Week Low: 0.6
All Time High: 2.3
All Time Low: 0.6
TNA iMPACT**
Close (This Week’s Rating): 1.2
Open (Last Week’s Rating): 1.1
Percentage Change: ▲ 9.1%
52-Week High: 1.2
52-Week Low: 0.6
All Time High: 1.2
All Time Low: 0.6
** TNA iMPACT’s are for the prior week as ratings may not be available at the time of the Journal’s posting
Analysis:
Not much movement in the ratings department, but TNA did manage to hit 1.2 again while ECW scored above a 1.2 for the first time since December 18, 2007. Aside from the general volatility of RAW, the other shows have been in a relative plateau since the middle of last year. Of additional note, the Global iMPACT special scores a 0.8 rating, decent for an off timeslot and an off program. Also, the UWF shows on ESPN Classic have been doing ratings between 0.00 and 0.07. Hardly impressive, but the show managed to attract up to 70,000 viewers with no advertising and no hype, just by being on. Wrestling has a strong drawing power just be its existence.
MONEY AND INVESTING
We all know that wrestling is a business, but we don’t often pay attention to what sells and makes money. Money and Investing looks into the top selling items in the world of wrestling and any interesting figures that may have come out this week.
What are the top ten selling items for the WWE? From WWEShopZone.com:
1. Hardys Purple Logo Pendant
2. Triple H The Conqueror T-Shirt
3. WWE Best of Raw 15th Anniversary DVD
4. Hardys Mirror T-Shirt
5. Randy Orton Oblivion T-Shirt
6. Shawn Michaels Creation T-Shirt
7. WrestleMania 24 White T-Shirt
8. WWE Raw Greatest Hits – The Music CD
9. Triple H Grey Skulls T-Shirt
10. Undertaker Fire T-Shirt
For the second week in a row, Jeff Hardy is the number one seller in the land of the WWE. Not only that, but he tied with Triple H for each having two items in the top ten. The Journal has covered Jeff Hardy’s selling ability in great depth over the past few weeks, so there is nothing more to add there. Tomorrow everyone will see if Jeff Hardy has pulled high enough numbers to change booking direction. Also of interest is the first WrestleMania related item of the season has premiered at number seven. This is a good early sign for WrestleMania as it approaches.
TNA requires a little bit more research. Their website does not release Top Ten lists, so the Journal does a general search for a space on “featured products” and sorts by most popular. They came up in order as:
1. TNA Meltdown CD Vol. 2
2. The History of TNA: Year 1 DVD
3. TNA Fleece Jacket
4. NEW TNA Hoodie
5. TNA Bound for Glory 2007 DVD
6. James Storm “Sorry Bout Your Damn Luck” T-Shirt
7. 2008 Wall Calendar
8. TNA Fleece Blanket (B)
9. Long Sleeve TNA Logo T-shirt (Navy)
10. Booker T T-shirt
TNA’s list did not change at all from last week continuing the dominance of James Storm. Coming up below the Top 10 there is also the Genesis 2007 DVD. According to figures released a couple of weeks back, Bound for Glory (number 5) and Genesis has 36,000 and 27,000 buys respectively. Going backwards, the PPVs before this received 17,000; 26,000; 15,000; 22,000; and 21,000 buys. This once again shows the long term downstream impact of having poor PPV build and booking leading to lower DVD sales.
PERSONAL JOURNAL
Wrestling isn’t just about watching and reading. The best way to be a wrestling fan is to experience it live. Where is wrestling coming to in the next 2 weeks? The Personal Journal answers that question.
| Sunday | Monday | Tuesday | Wednesday | Thursday | Friday | Saturday |
| 27 (Jan)
New York City, NY |
28
Philadelphia, PA |
29
Reading, PA |
30 | 31 | 1 (Feb) | 2 |
| 3 | 4
Austin, TX |
5
Corpus Christi, TX |
6
Fairbanks, AK Houston, TX |
7
Anchorage, AK |
8 | 9
Guatemala City, Guatemala |
Do you know a wrestling event coming up? Send one in to The Hamilton Ave Journal and we’ll be sure to add it to the list.
EDITORIALS
The Editorials section is designed for you, the readers, to respond to the views presented in the Journal, send an important news item, or talk about another overlooked business related item in wrestling. Just beware: the Journal reserves the right to respond back.
From the commentary section last week, we have several items to highlight.
ROH remains a topic of interest in the commentary section. Teri O chimed in with:
ROH may only have a live audience of 2,000 at a show, but how many more thousands in how many more countries buy the dvds of the same show? You have that data? You can verifiably say what their outreach capacity is? I doubt it.
This was in reference to the Journal doubting the overall size of audience reach; “reach” being the keyword. How accessible is ROH compared to TNA? In the United States alone TNA is available in 90 million homes and has a weekly audience of over one million. Additionally, TNA has monthly PPVs available on all providers and DVDs in high profile stores like Walmart and Best Buy. TNA actually has a distribution deal to be available in all Walmart stores and produces special Walmart packages. Walmart being the world’s largest retailer and being responsible for 7% of all retail sales is a huge strategic partner for TNA.
Compare that to ROH. ROH has no television presence around the world, meaning they are not easy to come by. They have irregularly scheduled PPVs that are taped in advance and are not available on all PPV providers and cable/satellite networks. DVDs are distributed mostly directly by ROH itself with select stores providing them on the shelves. TNA has seen several items break into the top ten best selling sports DVDs while ROH has had none.
Additionally, TNA airs iMPACT on SpikeTV in Canada, Bravo in the United Kingdom and Ireland, CableEuropa in Spain, Sport TV in Romania, Jetix in Italy, Europsport in most of the rest of Europe, RDS in Quebec, ESPN Stars Sports in many Asian countries, Glitch Ltd in Israel, Fox Sports in the Middle East, ABC in the Philippines, Cinema Networks in South Korea, Click Boogie throughout many African states, and many more. On top of that, TNA PPVs are available on Main Event in Australia and Sky TV in New Zeeland, among others.
ROH, on the other hand, is not accessible in countries outside of the United States without the long process of finding a seller of DVDs in a remote area (unlikely outside of Tokyo, London, Berlin, or Sydney). There is no way that ROH’s DVD numbers are coming anywhere near the availability of TNA in other countries, nonetheless TNA’s audience numbers. Two years ago TNA did a promotional tour of India with Sonjay Dutt, Simon Diamond, and a few others. They attracted crowds of over a thousand wherever they went. In some countries and areas, TNA iMPACT actually does better in television ratings than WWE programming.
By looking at reach and distribution, ROH is no where near the level of TNA, and TNA is fighting to be in the league of the WWE.
Joe would like to argue another point on ROH’s reach:
So “ROH is available in zero” homes? Fancy that. Then who’s been buying the ROH ppvs that made No. 1 & No. 4 on Wrestling Observer’s Best of 2007 list? Flaws in your statement of facts aside, TNA proved this week that their “mass market” alone may not be enough to popularize Japanese wrestling in the US. I.e., Their 1.2 rating for the weekly impact fell to 0.7 for their Japan special. Maybe they should stick to promoting Brock Lesnar on UFC.
First off, the Global iMPACT Special scored a 0.8 rating. That is expected because it was an irregular program that began at 11pm at night when many people watch the news and/or go to bed. Second off, no one is claiming that one show would popularize Japanese-style wrestling in America. The Journal was looking at this as a long term plan of using Japanese wrestlers on iMPACT and at live events to give the show a different look and feel, the same way WCW did with Cruiserweights and TNA used to do with the X-Division.
Third, a ranking of PPVs by the Wrestling Observer has no bases on factual reality but is just subjective “enjoyment quotient” by a subset of wrestling fans and reporters. This subset is an even smaller subset than the general IWC and not a true representation of the overall audience. Again, while the highest “ranked” ROH PPV may do 10,000 buys (unsubstantiated, more likely 5,000 buys), the lowest rated WWE PPV in a decade (ECW December to Dismember) did 90,000 buys. From a financial revenue perspective, ECW December to Dismember was at least nine-fold times better performing than the ROH PPV. On some scale of “enjoyment quotient” the ROH PPV may have been “better” than the WWE PPV, but the WWE PPV did far more business.
Finally, the Hamilton Ave Journal is a business review of the wrestling industry, not a measure of “enjoyment quotient”. From a financial perspective, all WWE PPVs are more successful that TNA PPVs and all TNA PPVs are more successful than ROH PPVs. WWE has a greater reach and audience than TNA, TNA has a greater reach and audience than ROH. ROH has a greater reach, audience, and revenue than NWA Wildside, but that is not a negative mark on NWA Wildside. Just because one company in financial more successful than another company does not mean it is “worse”. It means that one company makes more money. The Journal is mostly concerned with how wrestling runs as a business and the different models available.
That brings us to ROH-WHO with:
As far as product goes, though, I have to say ROH is 10x better than anything TNA has ever done.
Again, this is on the subjective “enjoyment quotient” index. From a business perspective, ROH is interesting and an in depth look at the company’s processes and model would show some interesting facts. How ROH rates “success” is different than how TNA does which is different than how the WWE does. The Journal is not interested in opinions of superior product quality but instead investigated ratings, revenue, and merchandise. That is why the Journal has spotlighted Jeff Hardy and James Storm so much in the past few weeks as, from a business perspective, they have become important commodities to grow and use to a greater potential.
There was plenty more written, so be sure to check out the rest of that section. Also worth your read this week is:
And, of course, a week would not be complete without a good dose of my very own HIDDEN HIGHLIGHTS!!
CLOSING BELL
This concludes Issue #18 (Volume 1) of THE HAMILTON AVE JOURNAL. Join us next week as we get ready to ring the bell again.
Till then!
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