Wrestlenomics Radio: WWE Network hits 1 million subscribers
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WWE announcement on Tuesday, January 27 that the WWE Network had “surpassed 1 million subscribers”. The news, coming on the heels of the Royal Rumble pay-per-view and a day of #cancelwwenetwork trends, did surprise many pro-wrestling analysts.
(I was telling someone on Twitter that I didn’t believe that WWE was going to hit 1M subs for January when they replied that WWE had already produced a press release explaining that they had.)
The $WWE stock surged from less than $10.50/share to almost $12/share in a matter of minutes.
WWE Network Subscribers
Clearly, there was several factors which fueled the WWE Network growth since Q3 results:
- WWE dropped the six-month commitment clause.
- WWE only offered a single tier of $9.99 per month price point (for the over-the-top service) for most countries.
- New subscribers to the WWE Network received the WWE Network free of charge for the entire month of November (including Survivor Series).
- Existing subscribers to the WWE Network were being transitioned to the month-to-month billing (at $9.99/month) in December.
- WWE suddenly delayed the launch of the WWE Network in the United Kingdom on November 3 at the last minute. Instead, the WWE Network was launched in the UK and Ireland on January 19.
- WWE Network in Canada is available on both Rogers Cable and Eastlink (as of 12/17/14) at $11.99/month. Price for subscribers in the United Kingdom/Ireland is £9.99 and €12.99 (about $15/month).
The growth since 9/30 (+268,500) was 37% international (+100,000) and 63% domestic (168,500).
The international growth is telling. Clearly, the expansion in the United Kingdom was critical. It’s the WWE’s largest market outside of the United States (grossing nearly $40M annually). Finally, WWE Network growth by region is reflecting the strong international portion of the historical PPV trends – 20% of PPV revenue ($194.6M out of $244.4M over the last three years) and 40% of PPV buys (7,045,000 buys out of 11,594,000 buys over the last three years). Even though WWE had a large international roll-out on August 12, the 9/30 WWE Network international subscriber count was less than 4%.
WWE is also crediting their #freefreefree campaign in November (offering new subscribers the month for free). WWE CFO George Barrios noted in his recent investor presentations that they believed the “sampling” would lead to subscriber growth. Interestingly, WWE is repeating the promotion for February (free for new subscribers, including the PPV) with an interesting caveat – subscribers in the United Kingdom & Ireland – would also be receiving a free month.
The “free month” enticement is a strategy similar to the common “one-week trial” which other over-the-top subscription services offer (Netflix, Hulu, CBS All Access, etc.). In the case of the UK/Ireland subscribers, they are not only paying a premium (almost 50% above other subscribers) but roll-out was handled very poorly as the November launch was stopped at the last moment (attributed to issues with the Sky Sports TV Rights contract) – right as WWE headed overseas for their European tour.
What WWE wants most is to show a steady stream of growing subscriptions from the start of 2015 through at least WrestleMania. Having made the decision to replace Elimination Chamber with Fast Lane as the February PPV, WWE was risking that subscribers might cancel and wait until closer to WrestleMania to re-subscribe. Instead, by offering a free month for new subscribers (and UK/Ireland existing subscribers) in-between, WWE is doing their best to avoid the six-digit subscriber cancellations that plagued 2014’s second and third quarters.
(When will Elimination Chamber resurface? Rumors had it slated for this Summer but latest list of PPVs doesn’t include it at all. Stephanie McMahon appeared on the Nerdist network’s Wrestling Compadres Slamcast on January 14, where she said the logistics of hanging the “10 ton” chamber were tough because many arena’s had giant scoreboards in the way.)