Estimating WWE Network subscriptions in 2016

As we close the books on 2015, we shall return to that central paradox which vexes all wrestlemetricians - can we accurate predict WWE Network subscriptions moving forward?

Let's start, as always, by breaking down the numbers that we know.

There's two important metrics which WWE reports each quarter:

1. Number of paid WWE Network subscribers as of quarter end
2. Average of paid WWE Network subscribers across over the quarter

These two numbers can diverge significantly. For instance, during Q1 2015, WWE had (1) 1.327M subscribers as of March 31 but only averaged (2) 927,000 subscribers from January 1 through March 31. However, the variation between these two numbers was much lower (±5%) during subsequent quarters.

As we look at the historic adoption rates, there's several variables which appear to influence subscriber numbers:

• How long has it been since the service was available domestically? [2/24/2014]
• How long has it been since the service was available internationally (outside of UK/Ireland)? [8/12/2014]
• How long has it been since the service was available in the UK/Ireland? [1/13/2015]
• When [was]/[will be the next] WrestleMania?

Moving forward, it's possible that the new influx of WWE Network launches (India, Japan, Germany) will merit their own "launch" date variable. However, as those launches were scheduled for Q4'2015 and Q1'2016, it's not part of our current data set. Likewise, if WWE ever manages a serious WWE Network in China launch, that would probably deserve a separate variable as well.

So far, we really only have seven datapoints (Q1'2014 through Q3'2015). If we're doing a regression, that's going to limit the maximum number of variables we should include to six or less.

date	paid subscribers	domestic	international	qtr avg paid
9/30/2015	1,233,100	990,200	242,900	1,173,000
6/30/2015	1,156,100	939,300	216,800	1,215,170
3/31/2015	1,327,000	1,131,000	196,000	927,000
12/31/2014	816,000	772,000	44,000	721,000
9/30/2014	731,400	702,900	28,500	723,200
6/30/2014	699,750	699,750	-	665,000
3/31/2014	495,000	495,000	-	147,000

Let's start by isolating the domestic numbers.

date	paid subs	dom	intl	dom %
3/31/2014	495,000	495,000	-	100.0%
5/15/2014	665,000	665,000	-	100.0%
6/30/2014	699,750	699,750	-	100.0%
8/15/2014	723,200	709,110	14,090	98.1%
9/30/2014	731,400	702,900	28,500	96.1%
11/15/2014	721,000	687,514	33,486	95.4%
12/31/2014	816,000	772,000	44,000	94.6%
2/14/2015	927,000	833,548	93,452	89.9%
3/31/2015	1,327,000	1,131,000	196,000	85.2%
5/15/2015	1,215,700	1,011,931	203,769	83.2%
6/30/2015	1,156,100	939,300	216,800	81.2%
8/15/2015	1,173,000	947,485	225,515	80.8%
9/30/2015	1,233,100	990,200	242,900	80.3%

I've filled in the mid-point for each quarter with the "quarterly average paid subscriber" numbers. Also, I've calculated the domestic subscriber number as the mid-point between the domestic percentage from each quarter-end. Domestic is important because it's been a constant since the start. International had huge growth spurts - once when the original global roll-out began (8/12/14) and once when the UK/Ireland came online (January 2015).

There's two trends at play. There's the general growth throughout the year and the accelerated growth (and decline) around WrestleMania.

There's a general trend of growth outside of WrestleMania: about 20,700 new domestic subscribers each month.

So, we can estimate what WWE Domestic paid subscriptions will be in Q4'2015, Q2'2016, Q3'2016, Q4'2016.

Estimated (using current trendline)

• 12/31/15: 1,040,500 domestic subscribers
• 06/30/16: 1,164,500 domestic subscribers
• 09/30/16: 1,227,000 domestic subscribers
• 12/31/16: 1,289,500 domestic subscribers

Depending on what percentage you assume, you can estimate the international subscriptions too. Q1'15 was 85% domestic. Q2'15 was 81% domestic. Q3'15 was 80% domestic. 

Let's assume that 80% is about the mix -- we'll assume Q4'15 is about 79.5% and Q4'16 will be about 78.7%.  Then, international subscriptions would be:

Estimated (using 20-21% estimated international mix)

• 12/31/15: 268,500 international subscribers
• 06/30/16: 307,500 international subscribers
• 09/30/16: 328,000 international subscribers
• 12/31/16: 349,000 international subscribers

ESTIMATED

date	paid subscribers	domestic	international
12/31/2016	1,638,500	1,289,500	349,000
9/30/2016	1,555,000	1,227,000	328,000
6/30/2016	1,472,000	1,164,500	307,500
12/31/2015	1,309,000	1,040,500	268,500

The next question is what's going to happen around WrestleMania in Q2'2016?

The growth from 5/15/14 (estimated) from 3/31/14 was about 34%.
The growth from 2/14/15 (estimated) to 3/31/15 was about 35%.

Let's assume that 3/31/2016 is about 35% higher than 2/15/16; that would be about 1,446,500 domestic subs.  International subs would be around 377,500. We'll assume that 5/15/2016 is half-way between the 3/31/16 and 6/30/16 numbers.

That brings us to this estimate:

date	paid subs	dom	intl	dom %
3/31/2014	495,000	495,000	-	100.0%
6/30/2014	699,750	699,750	-	100.0%
9/30/2014	731,400	702,900	28,500	96.1%
12/31/2014	816,000	772,000	44,000	94.6%
3/31/2015	1,327,000	1,131,000	196,000	85.2%
6/30/2015	1,156,100	939,300	216,800	81.2%
9/30/2015	1,233,100	990,200	242,900	80.3%
10/15/2015	1,235,220	988,176	247,044	80.0%
12/31/2015	1,308,898	1,040,574	268,324	79.5%
2/14/2016	1,349,541	1,071,536	278,005	79.4%
3/31/2016	1,824,178	1,446,573	377,605	79.3%
5/15/2016	1,648,356	1,305,498	342,858	79.2%
6/30/2016	1,472,088	1,164,422	307,666	79.1%
8/15/2016	1,513,575	1,195,724	317,851	79.0%
9/30/2016	1,555,167	1,227,026	328,140	78.9%
11/15/2016	1,596,864	1,258,329	338,535	78.8%
12/31/2016	1,638,667	1,289,631	349,036	78.7%

So, based on our current trendlines:

• 1.31M subs for 12/31/15 (above the 1.233M mark for 9/30/15) and above the 1.2M that WWE had originally said. (Let's assume they have a successful surge in subscriptions from the WWE Network prepaid card subscriptions).
• 1.57M subs for FY 2016 (compared to 1.256M in FY 2015, +25% growth)

The real question is whether it's reasonable to expect domestic WWE Network paid subscriptions to continue to grow despite the ratings stagnation/decline in 2015. Is this service still attracting new subscribers? Or will they increasingly be looking at international markets (Germany, Japan came online in January 2016) for the growth. Is a 35% swell for WM really realistic considering the much larger base in FY16? And will WWE continue to hold those subscribers for the rest of the year? Can WWE really manage 30% growth in such a rebuilding year?

In the past, we saw a lot more stagnation from post-WM to end of the year (10% growth in FY'14 from Q2 to Q4; 11% growth in FY'15 from Q2 to Q4). This model has only about 11% growth for FY'16.

Analysis by Chris Harrington (chris.harrington@gmail.com) - Twitter: @mookieghana