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ROH going Over The Top (OTT)?

It seems like everyone has an Over The Top (OTT) internet streaming service or network these days. There is the WWE, New Japan (who just celebrated the third anniversary of the service), FloSlam, NWA Classics, Chikara and on and on. Noticeable by their absence in the U.S. market is Ring of Honor. In an ESPN article, Joe Koff said that the company is looking for ways to distribute in an OTT platform and Ring of Honor would be the center piece to a Sinclair initiative in this space.

Let’s examine the viability of Ring of Honor as a stand-alone Over the Top Platform:

What is the actual market potential for Ring of Honor? I believe that there are 3 measurements that we can utilize to gauge the market potential for an OTT service:

Customers who pay for traditional pay-per-view. Since ROH has returned to pay per view, buy rate information has been sporadic but estimates have been around 8,000-12,000 per show.

New Japan World Subscribers. According to Brandon Howard of Fightful, New Japan World estimates on January 5, 2017, were 60,000 worldwide subscribers with 15,500 of those coming outside of Japan. Assuming many of those subscribers are in the U.S., and Ring of Honor has similar (if not greater) visibility, a comparable subscriber number would not be unreasonable.

WWE Network Subscribers. The WWE Network subscriber base in the U.S. has been reported as  1,165,000. If 1% of those subscribers were interested in Ring of Honor, that would be 11,650 subscribers.

Using these three metrics as measurement, a Ring of Honor OTT platform can be expected to acquire around 8,000-15,000 subscribers. Let’s use a conservative estimate of 10,000 subscribers for our speculative purposes.

Price point: We all know that the WWE is $9.99 per month. 999 Yen for New Japan World (about $8.80, depending upon market rates) and FloSlam is $20 per month ($12.50 if you sign up for a year).

A price point on the higher side of the market range (such as $12) would allow for flexibility for special promotions and discounts. Assuming a $12 price point and 10,000 subscribers per month, would lead to $1.44M dollars in gross revenue per year.

One of the areas that Ring of Honor would have to be careful of is not to cannibalize some of the existing revenue streams. I believe that traditional pay per views should remain off of an OTT platform but subscribers can be offered a redeemable discount with proof of purchase.

To give the OTT platform legs, the current Video On Demand offerings would have to be included in an OTT service. The house shows that are regularly included can be quite pricey when purchased individually but it appears that the buys per show is fairly nominal.

Ring of Honor already has subscribers to a Ringside Member service. This includes the ability to purchase tickets early, gain access to videos, discounts on ippv’s, etc. This is at a cost of $59.99 per year. These members would be your initial market to entice to sign up for the additional service. Due to the crossover in offerings, one would need to be eventually be rolled into the other.

Just as New Japan and Ring of Honor support each other in promoting live events and other opportunities, promoting each other’s streaming services are in each’s best interests. A favorable price point for subscribing to both is likely to entice fans from one product to jump on board with the other. Since New Japan World has already established itself, ROH may make more headway by providing New Japan the opportunity to be an affiliate- promoting ROH’s service through their channels and receiving a ‘bounty’ for each new member that signs up.

One of the challenges that Ring of Honor will face is being late to market. How many OTT services does one need? Perhaps a fan would have held off on the Progress, Chikara  or FloSlam service in lieu of Ring of Honor, but now that fans have several wrestling platforms, will they be so quick to cancel or add another service?

 

Lavie Margolin is a Career Coach and author of Mastering the Job Interview. He has been a professional wrestling fan since 1988 and has attended ROH shows regularly since 2004. Tweet me @Laviemarg 

 

All comments here are speculative and for entertainment purposes only and no misrepresentation of Sinclair Broadcast Group, Ring of Honor or related brands is intended. Full disclosure: I am a Sinclair Broadcasting Group (SBG) shareholder.