WWE Chief Strategy Officer & Chief Financial Officer George Barrios attended a fireside chat at Needham Emerging Market conference. Here are the five takeaways from his presentation and discussion with analyst Laura Martin.
1. WWE is downplaying interest in the UFC sale and downplaying any of the valuations implications it has for their business.
Question from Audience: UFC is for sale. Is WWE interested in purchasing it? If it gets an elevated valuations, what are the implications for WWE’s valuation?
George Barrios: We don’t talk about acquisitions. I’m not going to answer that question. As far of the valuation, not much – it just keeps amplifying the value of content. It’s just another data-point.
2. While WWE is only generating about ten million annually in YouTube revenue, they insist that their significant social and digital media presence is relevant because:
- a. As an entertainment company, their ultimate measure is their ability to capture people’s time. It results in more action figure sales, more WWE Network subscriptions and more viewers for Pay TV (which manifest themselves when television contracts are renewed).
- b. The next generation of fans are watching YouTube and Netflix so it’s important to capture them at streaming touchpoints.
- c. Over the last hundred years of media, the money has always followed the eyeballs. The behaviour changes and the money at first stays where the old behaviour was, but there is a tipping point.
3. WWE’s biggest regret around the WWE Network launch was not doing it earlier and insisting on the six-month commitment pricing without a promotional (free trial) element in the beginning.
4. WWE still holds the 3 million to 4 million subscribers as the ultimate goal for the WWE Network. While “70%-80% of social media/digital media views are outside the U.S.” they did affirm that only 25%-30% of the WWE Network subscriptions are projected to be from outside the United States in the intermediate term. Still, they have conceded that WrestleMania is going to be the main “funnel-filler” for acquiring subscribers each year and that while there may be sequential declines (drops from quarter-to-quarter), investors should see year-over-year increases.
5. WWE has “quintupled” the amount of data they collect in the last 24 months due to the WWE Network. They continue to invest in Technology. The information they gathering is helping the company build detailed prediction models for churn (what geography are they from? how much content did they watch? when did they sign up?) and customer segmentation (what shows did they watch?). WWE emphasized this is “real data” and not surveys or Nielsen samples. Their holy grail is to link this data between social media, ticketing, e-commerce, WWE Network and so forth into a continuous chain.
You can listen to the presentation at the webcast: http://wsw.com/webcast/needham77/wwe/ or Read the notes I took about the presentation over at wrestlenomics.com: http://indeedwrestling.blogspot.com/2016/05/barrios-at-needham-emerging-technology.html and see the other portions covering Barrios’ “long dark hallway” analogy, Joseph Campbell’s “Hero’s Journey” and churn calculations.
Be sure to check out my other articles covering WWE Q1 Results (and changes to KPIs) and WWE International Strategy over at SeekingAlpha and last but not least, check out my latest episode of Wrestlenomics Radio breaking down WWE Q1 and more below:
Chris Harrington is an analyst who covers #wrestlenomics at @mookieghana wrestlenomics.com and indeedwrestling.com. His podcast about Professional Wrestling Financials (Wrestlenomics Radio) can be heard at Voices of Wrestling.