Monday, April 07, 2014

WWE Network announces 667,287 Subscribers

This morning the WWE announced that the WWE Network currently had 667,287 subscribers. I've written an extensive analysis of what this means over at Whatculture.

While WWE can project this as a great number using language like “fastest-growing digital subscription service” and “on track to 1 million subscribers”, this number is hardly a slam-dunk.  It's at the bottom edge of what is the acceptable number.  If the WWE Network needs 1M domestic subscribers to break even (on OIBDA), now that Wrestlemania is over, where are they going to find the last 250,000?

In recent weeks, I'd grown more optimistic about what they were going to announce so I must admit I was a little shocked when they admitted they were only at 2/3rds of a million subscribers. However, I was reminded by @voicesofwrestling that I'd actually predicted 650,000 by Wrestlemania in a piece that I wrote one week after the WWE Network launch.

If you’re interested in BREAKING NEWS AUDIO, Bleacher Repot’s David Bixenspan, Chris Harrington (and Rich from Voicesofwrestling) just did a one-hour #wrestlenomics Radio show all about the WWE Network Subscription #s:–wwe-network-subscribers-announced
Direct MP3 link:


* What Does 667,287 Subscribers Mean For WWE Network? by @mookieghana
* Biggest Takeaways from WWE Subscriber Numbers Announcement by @davidbix
* Nasdaq Dives as Investors Bolt for Value Stocks by Barrons

Somehow, someone finally woke up and started talking about how zany the stock pricing for $WWE was versus their fundamentals. I'll say it until the cows come home, while these WWE Network numbers aren't great, what matters most is the WWE Domestic TV Rights renewal.  I never expected WWE to make money on the WWE Network in 2014, so the fact it's off to an adequate (but realistic) start is fine. It's the TV rights that are completely impossible to pin down -- half of the media articles just reword WWE's talking points (WE ARE LIVE SPORTS~!) as if it's original commentary. They ignore the reality where advertisers don't spend good money to be in front of pro-wrestling fan eyeballs.  Once they can bridge that gap, we'll know what's really going on.  Until then, I'm sticking with my prediction of about 1.5x rights (~$159M domestic) and they stay on NBCU.


Anonymous said...

Does the 1M target include any (potential) rollout of the Network internationally this year?

Mookie said...

I've heard this question a number of times today.

No. The 1M number is purely for the Domestic WWE Network. They figured it would cost $55M to run plus up to $60M in Revenue Cannibalization. The int'l rollout of the WWE Network (Phase II) for Canada, UK, Australia, Nordics, HK, etc - that's a 250k for a break-even point.

So, in short, nope - they need 1,000,000 annual subscribers on the US WWE Network to break-even. Then they need another 250,000 annual subscribers for the Int'l WWE Network to break-even.

However, that number is based on guessing revenue cannibalization, so we need to know what PPV looks like before we can know for sure. As I wrote before, there's a HUGE revenue cannibalization possibility when you include all their revenue streams. I guessed $55M. They guessed $60M. That's probably a decent range, but no one knows until basically those dollars dry up.

TG Chicago said...

"If the WWE Network needs 1M domestic subscribers to break even (on OIBDA), now that Wrestlemania is over, where are they going to find the last 250,000?"

Don't you mean 350,000? Or, technically, 332,713?

Mookie said...

Technically, yes - that's the difference.

However, I really meant 250,000. I fully believed they could get another 83,713 subscribers to sign up by the end of the year. Those were the people who were waiting to see the Wrestlemania stream to prove itself or interested fans who acquire technology (Roku, next gen console, smart tv).

However, the 250,000 fans beyond that was where I had (and continue to have) my serious doubts.