Wednesday, June 03, 2015

The Adventures of George Barrios in London & Buzzwords, and Sky Italia


I've registered two websites which I'd like to call out:
  • - this will redirect to this blog
  • -this will redirect to Voices of Wrestling (I spent their Q1 payment on registering this domain)

Over on the F4W board (subscription required), someone (TheVW) asked:
Does anyone actually like hearing as many buzzwords as possible crammed into answers? It seems like a lot of people could cut their word count in half during interviews if they just gave direct answers without superfluous words.
Here's my response:
Actually, in these situations, I think Barrios is trying to run out the clock.
He wants a few questions as possible. I doubt he appreciated my question brought up the revolving door in Digital with Perkins-abeyance-Schwartz-abeyance.He wants to craft a message (WWE Network has 159M potential homes!) and get out of there without being grilled on how much PPV-is-dead-but-somehow-still-generating-tons-of-OIBDA the company sacrificed to launch the WWE Network. It's investors and analysts who hang out on these things and they live this buzzword BS all day long. I felt that the guy asking questions was better than many, but he still didn't seem to have the time-table down on when they announced the WWE Network, when the WWE signed their TV contracts, and when the TV rights actually were being realized. WWE isn't going to these conferences because it's journalism - they go because it's PR and they're trying to control the conversation. Still, there's elements (especially when they do open mics) where you can actually get some good gems from even someone as granularity-avoiding as Barrios.

BARRIOS in London

CageSideSeats reporter Keith Harris did a huge favor for me and covered the BOA/ML Global Telecom & Media Conference from London where George Barrios presented on 6/2:
I'll be live tweeting globetrotter George Barrios' appearance at the BOA/ML Global Telecom & Media Conf. in London, England shortly.
George Barrios is here!
Thanks for almost making the PowerPoint slides work.
Talking about peak profitability at turn of decade, heavy investment in recent years. Pimps their strong balance sheets.
Business strategy monetizing their television IP worldwide, talks about their live events and merchandising streams, WWE Network.
Social media is an imperative! Touting the usual YouTube, Facebook, TV ratings stats, etc.
Makes up a significant proportion of USA Network's prime time blog. Talking about key foreign markets.
The WWE Network IS the most important development. $9.99 a month. Consuming 55 hours a quarter of content. Highly engaged subscribership.
90+% satisfied or highly satisfied. Lots of people following suit. Now, we have a WWE Network hype video.
Huge VOD library with live premium content.
Usual hundred of millions worldwide fan stats. Seth Green, South Park meets WWE show. Jerry Springer. Swerv'd. Creating new IP for Network.
Talking about their major TV deals in America and overseas markets. Pushing the locked in escalators in rights fees.
Barrios remembers the meeting where they were told they were not going to play in social media, they would own it.
500/600 million social media touch-points across platforms.
Looking to increase the % of revenue from overseas markets. Now to Q&A.
Why WWE Network? 1. PPV fairly expensive for consumer, didn't think growth projections were their for the future. 2. Monetize VOD library.
Hopefully no-one asks about Mayweather vs. Pacquiao.
Clearly the success Netflix drove the decision. Talks about their hardcore fanbase (gamer types) skews young.
Chose baseball advanced media as their technology partners.
Talking again about their first party research done prior to launching the WWE Network. How they came up with 3-4% subscriber goal.
Barrios has learnt that 85% of the viewership are the long tail (people are willing to watch content than just the WWE PPVs).
It is very difficult for a legacy company to leave their legacy. To enter one room to another have to go through a long dark hallway. Pivots
Grappling with the balance of where to put their content: TV networks, WWE network, social media. Need to optimize monetization.
Talking about similarities and differences with Netflix. Tactical level learnt alot from them. Strategic similarities too.
WWE PPV business had 1 million homes, think they can get to 3-4 million with Network. At similar % at similar stage.
Why $9.99 price point? Elasticity. Did a lot of research. Once they came up with a range, $9.99 became the arc in the range.
Asked about lumpiness! In a few years, we'll have a nice smooth best fit curve with a nice upward trend.
Growth hasn't been linear, due to the seasonal elements of their calendar, peaking at WM. That's why we focus on year to year growth.
We will be able to answer that really eloquently in five years.
Our primary acquisition channel is Raw & Smackdown. Sampling tool of a free month for new subscribers. Everyone does it.
December, February, April and May (June too) for free! Happy with early results. Mentions the markets they hope to expand Network into.
Including Germany, Thailand, etc. importantly to go deeper into the overseas markets they've already expanded in. Only 15% share now.
Asked about India! Their third biggest money generating market today. Talks about low pay, low broadband penetration, high broadband cost.
That's why WWE Network won't be a big money spinner there. Questioning how to launch in India? Could partner up with somebody.
Asked about China too. Even Netflix is looking for a partner in China. Talks about pivot in willingness to buy media there. Taking it slow.
WWE Network incredible EBITDA opportunity.
When are you going to have another bite at the apple at new TV rights deals? In about five years: 2019/2020 in most markets (not Canada).
Here in the UK, 60% watches Raw live. Live and branded content is valuable.
Asked about Raw and Smackdown move to WWE Network? Anything is possible, part of their 1% defensive strategy.
Audience Q&A now. Real core value of WWE is IP and the brand that we built. May be able to leverage it in other ways.
Asked about international slowing down? Barrios talks about Western Europe economic slump.
Asked about smart DNSs? How many foreigners are cheating? No rationale for people to do it in markets the WWE Network launched.
That's a wrap. Liked how Barrios ignored that the WWE Network is about $5 per month expensive in the UK. No incentives there.
This was all taken from Keith's twitter: with his permission.

(If you're serious about understanding WWE business, I highly recommend you follow Keith on Twitter and read his articles over at Cagesideseats.)

As has been discussed before, Barrios really glossed over the fact that £9.99 is not the same as $9.99. UK subscribers are paying more.

Barrios exact quote on the subject was,
"[At] conception it would have been a bigger issue before we were available in all those markets, ight because we just launched in the US. We saw some of that. Was it something I would say was material? No. At this point we're in all the markets, it is the US product, so other than the markets we're not in, there's no real rationale for someone to have to IP spoof to do that, so obviously some people just like to making things a little bit more complicated than it needs to be. So we see some of that, but nothing that is material to us."


In other news, WWE announced on 6/3 that "SKY ITALIA SECURES WWE® FOR FIVE MORE YEARS". The press release specifically mentions that 12 PPVs will continue to air on "Sky Prima Fila".

Italy is one of the handful of countries (along with Germany, Japan, India, China, Thailand and Malaysia) where WWE has a significant presence but has yet to launch the WWE Network. 

An Italian fan on Twitter, @Stefano_Summa, helpfully pointed out that Netflix is launching in Italy in Q4 2015, and WWE may be waiting to see how that launch goes before they jump in. He also noted that "good quality Internet for a service like this (WWE Network) isn't quite there outside of Big cities".

Still, WWE ends their latest Investor Presentation with four goals:
  1. Continue to grow WWE Network global subscribers
  2. Communicate plans for WWE Network in Italy, Germany, Japan, India, China, Thailand and Malaysia
  3. Monetize digital and social media prescence
  4. Increase share of revenue from international markets
Launching the WWE Network in Italy (either via OTT or as a Premium Network similar to Canada) would be on point to achieveing goals #1, #2 and #4.

-Chris Harrington

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