Subtitles section Play video Print subtitles In the world of professional wrestling, there's something called a "Swerve." ANNOUNCER: "HULK HOGAN HAS BETRAYED WCW!" Some examples: These tag team partners are called "Baby-faces", or the good guys. Then one of them swerves, when he super-kicks his tag-team partner in the head, quickly assuming the role of the bad guy, or what the wrestling world calls the "heel". ANNOUNCER: "ARE YOU KIDDING? WHAT A DISPICABLE ACT THAT WAS!" Or a match is almost lost, when… what's that? The superstar wrestler appears out of nowhere sprinting down the aisle to save the match. ANNOUNCER: "THAT'S THE WARRIOR'S MUSIC! IT'S THE ULTIMATE WARRIOR!" That's a swerve. So it should go as no surprise that World Wrestling Entertainment, known as the WWE, the most popular brand of sports entertainment in the world is prepared for any swerves that come their way. So here's the story of how the WWE learned to see the swerve coming. So I spoke to Bloomberg reporters Felix Gillette... Gillette: I'm a writer for Bloomberg News for the global business team. and Kim Bhasin Bhasin: And I'm the U.S. luxury reporter at Bloomberg. To find out exactly how the WWE is positioning itself for an all-out global invasion. Which starts with a massive change to their lucrative pay-per-view model. Gillette: WWE basically pioneered the pay-per-view model on cable. I remember as a kid when the pay-per-view events came up all of our friends would scramble around and try and get one of the parents to, to pay for it. But in 2014, they took a HUGE risk. Gillette: They saw a little bit sooner than some of the other entertainment brands that where this whole thing was moving was away from cable and satellite television, and towards on demand streaming video apps. Gillette: They made this risky decision in essence cannibalizing that pay-per-view model, which they had essentially built. And after some early turbulence it's working. Roughly 1.5 million people are paying a $9.99 a month for the WWE app, making it the fifth-most popular streaming OTT service. This "adapt or die" approach is in the WWE's DNA. Over the past 30 years the company always seems to think two steps ahead. In the early 90s… Bhasin: WWE was at its most threatened when Ted Turner took them on with WCW Which stands for World Championship Wrestling. And back then, the WCW was winning the ratings war. So in order to compete with them… Bhasin: WWE had changed its product from a family-friendly kind of cartoonish style to this really raw, that's why they called their show RAW. It was this raw style of wrestling. with violent, outrageous reality inspired plotlines and aggressive personas. ANNOUNCER: "FROM A 16 FOOT LADDER!" Bhasin: And they won that fight against Ted Turner. And they bought WCW. The early 2000s ushered in an era of testosterone-driven programming aimed at the red-blooded American male… Bhasin: Bra and panties matches and people smashing each other over the head with like barbed wire bats and things like that. Until 2015 when WWE fans started a hashtag #GiveDivasAChance. Since then, WWE hired 40 more female wrestlers. And that growing cast of female characters was part of a much larger plan. Bhasin: They started to try to appeal to a broader set of people. Gillette: Let's attract more female fans. And after we've attracted more female fans, let's attract more international fans They're broadening their base and they're doing that in large part to make it more advertiser friendly. And not just friendly to advertisers… Gillette: They're trying to build up their fan base in China, they're trying to build up their fan base in Europe, they you know already have a pretty good fan base in India. Bhasin: India is a place where they already have an established wrestling culture. Because of the gigantic Indian wrestler The Great Kali. But there's still a lot of work to do. While the WWE set a revenue record in 2017, only 30% of it is coming from overseas audience. And there's one person whose responsibility is to grow that number. Bhasin: The buck eventually stops at Vince McMahon no matter what's happening within WWE. Gillette: Yeah, he's a very controlling guy, and it's a very, very, very tightly scripted company. Bhasin: And that goes down the board to big stars' entrance music, and their outfits and things like that. So with a CEO like McMahon always planning two moves ahead and an aggressive push into multiple international markets, a big issue... is money. Gillette: It's hard to do all those things simultaneously without committing a huge amount of capital to it. And that's where the WWE becomes an attractive company for buyers. Gillette: Potentially one thing that could happen with WWE is they could benefit by being acquired by a bigger technology or telecom company. An Amazon, or a Facebook, or a 21st Century Fox. So with a market cap of $2.8 billion, the advantage of owning 100% of their own content, and a rapid consolidation spreading throughout the entertainment industry, it looks like the WWE is well positioned, even if there are swerves ahead.