Why WWE is doing a brand split and turning Smackdown Live

June 3, 2016

I have some thoughts on this.
I’m not sure how close to the truth they are but here goes…

As you may know, Smackdown is the B show for WWE.

It started out as The Rock’s “show” back in the day, originating from one of his catchphrases. “Layeth the smacketh down, on your candy ass!”

The reason for WWE to launch a second show was of course to maximize revenue. To catch all those fans who want more pro wrestling.

Smackdown is taped in front of a live crowd on Tuesdays, a day after their Monday Night Raw live show.

This saves them money since they can use all their talent & crew on back to back days in the nearby towns, instead of having everyone go home and come back to that area a few days later. One wrestling show uses something like 14 trailers worth of equipment. This also allows their workers one to two days of rest before starting up the weekly circuit again, which includes house shows (non-televised) and monthly Sunday pay per views.

WWE is a traveling show. They come to you. They don’t have a fixed production set like a regular sitcom or drama. Or their own home stadium, like an NBA team.

Smackdown is then edited, correcting any mistakes, adding voice-overs as needed, and sometimes pumping in fake cheers and boos in post production to support their story narrative of good guys vs bad guys. And then it airs on Thursday nights.

Not airing it live also saves them money. I assume it takes a lot more effort and money to produce a live show, producing it on the go to make sure the proper camera is on the right action, equipment to broadcast live feed, and knowing that mistakes cannot be corrected later.

Recently, WWE announced that Smackdown is now moving to Tuesday nights.

It will air live and feature its own separate superstars and separate story lines. Meaning, they want their fans to know this show will no longer be relegated to the B status, which consisted of many replay clips from RAW and less prominent storylines. It will now be prime viewing. Moreover, Smackdown moved from lesser cable networks (UPN, CW, MyNetworkTV, SyFy) to premier USA starting this year.

The move also means front-loading the beginning of every week with five hours of televised wrestling. Monday 3hrs. Tuesday 2hrs. (We’re not even counting sunday ppvs or wednesday nxt shows)

So why are they changing the Smackdown format now after 17 years?

NBCUniversal (owner of USA & SyFy) wants eyeballs.
People who mostly watch live runs of wwe shows, so that they can’t skip ads. They make money by charging advertisers a fee and assuring them that their ads will be seen.

WWE wants more money from tv networks.
And there are three ways to do that. Get more people to watch their current shows, make current viewers watch longer versions of their shows, or create new shows to satisfy a different crowd. It’s like if you make toothpaste, you want your customers to buy more tubes (brush three times a day, ok?), get others to switch to your brand, and maybe also start making toothbrushes, mouthwash, and breath mints.

A couple ways WWE did this, since they can’t seem to convert new viewers for RAW, was to turn that two hour show into a 3-hour program starting in 2012. And to create a reality show in 2013, based on their female performers, which attracted a different customer base.

Prior to 2014, NBCU was paying $90 million annually for WWE’s three main shows.
Raw (3 hours per week, 52 weeks): 4.16M viewers average in 2013
Smackdown (2 hours, 52 weeks): 2.5M
Total Divas (1 hour, 15 weeks): 1.32M
Roughly, NBC got around 929M viewers per year for 275 hours. Or about 3.38M viewers per hour.

For this, they paid around $327,272 per hour to WWE.
Or about $26.63 for one viewer watching an hour show full of ads.

In 2014, WWE renegotiated tv fees with NBCU for $150M annually.

They claimed that since they’re one of the few providers of live shows (like NBA, NFL, MLB, Saturday Night Live, Nascar), they deserve more money. NBCU agreed, though not as high as what WWE initially wanted. Turns out WWE demographics aren’t high value ones as other live programs. Translated, WWE fans don’t buy expensive trucks like NFL viewers.

The problem now is that viewership keeps dropping.
RAW average for May 2016 was around 3.2M.
Smackdown May 2016: 2.3M
Total Divas 2016 (14 episodes): 0.73M

At this rate, let’s estimate a total of 749M total viewers for 274 hours for the next 12 months. About 2.73M viewers per hour.

NBCU is now paying $547,445 per hour to WWE.
Or about $54.95 for one viewer watching an hour show full of ads.

That is a big price to pay even accounting for inflation. They probably want that closer to $40 per viewer or much lower.

Thus, WWE is forced to give us live 100% original Smackdown on Tuesdays, even though it costs them more. This in hopes of attracting more eyeballs.

And they’re creating a spinoff reality show based on two of the women and their high profile partners, called Total Bellas.

I also suspect the live product placement inside RAW these days (wrestlers shilling for subway sandwiches, payday candy bars, movies, video games) are there because of NBC.

NBCU wants their eyeballs. WWE must figure out a way.

Resources:
Logistics of WWE – a crew member talks on reddit
WWE stock gets smacked down after new TV deals are unveiled – LA Times
WWE RAW 2013 Numbers
WWE Total Divas – Wikipedia
WWE RAW 2016 Numbers
WWE Smackdown 2016 Numbers