WWE have announced another strong quarter for the 2015 figures in their quarterly earnings conference call on Thursday and among a raft of positives, the biggest is the number of WWE Network subscribers has maintained at its 1.2 million, with the average being around 1.17 million.
The negative continues to be that of the television ratings are at an all-time low, dropping close to a 2.2 at some points in October. George Barrios said that its “Hard to tell, if the low ratings at Cyclical” and that they are “Working to change that”. Barrios also believes that the content is “Great and Fans are enjoying it” and want to determine whether the ratings will be a long term issue or a monthly one.
Barrios continued to say that the WWE are planning to invest “More than ever in company history” in forms of technological investments to cover all their bases.
During the call, The WWE Attributed the rise of NXT due to the power of Social Media, with the evidence being the WWE Network Numbers and its sell out of the Barclays center. Barrios commented saying that the NXT brand competing with RAW & Smackdown “Hasn’t entered our minds” due to the different attitude and personality of NXT.
As ever, The WWE also announced they will soon add a further 90 hours of content towards the end of 2015 with shows being “Theme & Time Period Programming”, so expect something Holiday related soon. WWE looks at year-over-year Network growth as more important than sequential. Investors seem to be looking at sequential.
And finally, Vince McMahon has noted that NXT Takeover Specials have done “Extremely Well” and that the NBCU has secured 37 new advertisers for WWE programming.
Below you can find the rest of the Quarterly Earnings details;
WWE® Reports Strong Third-Quarter 2015 Earnings Growth
Third-Quarter 2015 Financial Highlights
•OIBDA of $23.4 million increased $20.7 million from the prior year quarter
•Total international revenue increased by 43% to $119.0 million through the first nine months of 2015
•WWE Network totals subscribers increased 79% to more than 1.3million from the third quarter 2014; paid subscribers increased 7% to more than 1.2 million from the second quarter 2015
•Network segment revenue reached a record of $145.8 million on a trailing 12-month basis
Third-Quarter 2015 Business Highlights
•WWE Network premiered more than 85 hours of original content including the network’s highly rated programs,
Beast in the East, NXT Takeover: Brooklyn, Swerved and Stone Cold Podcast
•SummerSlam, Raw and NXT delivered 3 consecutive sell-out events at the Barclays Center in Brooklyn, NewYork (August 22 – 24)
•37 new advertisers were secured for WWE programming following NBCUniversal’s Upfront
•WWEwasthemost-viewedchannelonYouTubeinAugustrankingaboveotherpopularchannelssuchasBuzzFeed and Taylor Swift; WWE content (on and off-channel) garnered close to 7 billion views on a trailing twelve month basis
•WWE exceeded 660 million social media engagements to-date in 2015 and continued to rank 6th on Sprinklr’s Social Business Index, ahead of the NBA, NFL and other media properties
STAMFORD, Conn., October29, 2015 -WWE (NYSE:WWE) today announced financial results for its third quarter ended September 30, 2015. For the quarter, the Company reported net income of $10.4 million, or $0.14 per share, compared to a net loss of $5.9 million, or $0.08 loss per share, in the third quarter last year.
“During the quarter, we made significant progress on the growth of our global subscription service, WWE Network,” said WWE Chairman & CEO Vince McMahon. “We also continued to strengthen our talent base, achieved significant international growth and increased engagement across our digital and social media platforms. Over the next year, we expect to leverage our brand and content initiatives to further enhance engagement, promote network subscription, and maximize our long-term earnings growth.”
George Barrios, Chief Strategy & Financial Officer, added “Our solid earnings growth for the quarter was driven primarily by the increase in WWE Network subscribers, the escalation of our television rights fees, as well as higher effective ticket prices at our live events. Key metrics, such as the record attendance at our SummerSlam events, viewership of our original content, and social media presence demonstrate the increasing strength of our WWE brands, which are the foundation of our long-term growth.”
WWE Network Update: Third Quarter Highlights
Network segment OIBDA reached $40.2 million on a trailing twelve-month basis, which is comparable to the recent average annual OIBDA results of the Company’s pay-per-view business before Network launch. Network segment revenue increased 57% from the prior year quarter. Supporting the growth in revenue, WWE Network had 1,233,000 paidsubscribersatquarterend,andaveragedapproximately1,173,000paidsubscribersduringthequarter,representing a 62% increase from the prior year quarter.1 During the quarter, the Company premiered more than 85 hours of original content on WWE Network, increased the network’s comprehensive on-demand library to more than 3,700 hours, and continued to broaden its global distribution. From inception through September 30, 2015, WWE Network attracted nearly 2.3 million unique subscribers with approximately 54% of these subscribers active as of that date.
•Original content: WWE Network’s compelling live and original content, including the Company’s pay-per-views, originalseries,NXTLive,andotherspecialscontinuedtodriveviewerengagement.Amongthecontentthatdebuted during the quarter, live event specials Beast in the East (produced from Japan on July 4th) and NXT Takeover: Brooklyn (produced in the U.S. onAugust 22nd) were among the network’s top programs. Episodes of the original series Swerved (produced with Jeff Tremaine, Director of Jackass and Bad Grandpa) and Stone Cold Podcast continued to garner a high level of viewership, and the live event special, Live from Madison Square Garden, which was produced in New York on October 3rd, recently became the network’s most watched program to date (excluding pay-per-view).
•Acquisition & Retention: To acquire and engage subscribers, the Company utilized its sizeable social media and digital assets, including video sampling on Facebook and WWE.com, leveraged the network’s “watch list” technology,andinOctoberintroducedathree-monthsubscriptioncardexclusivelyatWalmart.Thecardisintended to facilitate subscriptions by enabling a “no credit card required” payment option.
•Customer engagement: During the quarter, 90% of subscribers accessed WWE Network at least once per month. Consumer research indicates that 91% of subscribers are satisfied with WWE Network.
•Content distribution: The Company continued to expand distribution, making the network available onAndroid TV and Windows 10 platforms inAugust. Additionally, the Company continued to broaden the global distribution
of WWE Network, which was made available in Italy and Malaysia in July 2015. At quarter-end, WWE Network had approximately 243,000 international subscribers1.
(1)Average paid subscribers are calculated based on the arithmetic daily mean over the relevant period, and may differ substantially from paid subscribers at the end of any period due to the timing of paid subscriber additions. Trial subscribers acquired during a promotional period are not counted as paying subscribers until they convert after the end of the free period.
WWE Network Update: Future Plans
To grow WWE Network, the Company is executing a five-part strategy, including creating new content, implementing high impact customer acquisition and retention programs, introducing new features, expanding distribution platforms, and entering new geographies. The Company is focused on expanding the network’s line-up of compelling original content as a critical element of this strategy.
•Programming: The Company expects to add approximately 90 hours of original content to the network’s featured programming in the fourth quarter 2015. Exciting original programming coming to the network includes Breaking Ground, a reality series in the style of HBO’s Hard Knocks, which chronicles what it takes to become a WWE
Superstar; NXT Takeover: London, a live event special produced from Wembley Arena in the U.K. (December 16th); as well as new episodes of WWE 24 and Stone Cold Podcast. In addition, the Company will continue to expand WWE Network’s robust video-on-demand library, which currently has more than 3,700 hours of content.
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•Acquisition & Retention: The Company plans to further leverage its sizeable social media and digital assets to acquire and retain new subscribers. On October 25, the Company aired the premiere episode of Breaking Ground, a network original, on Facebook and YouTube. Plans call for the increasing use of video sampling on Facebook, YouTube and WWE.com to build awareness of WWE Network and its compelling programs. The Company is also continuing investment in its data analytics platform to enable a personalized network viewing experience.
•Features/Distribution: Other important elements of the Company’s network strategy include improving the user experience and content discovery across devices and continuing to expand distribution platforms. Over the coming months,theCompanywillcontinuetoimprovetheuserexperiencebyenhancingthenetwork’ssearchfunctionality, adding the ability to organize content as themed “collections” and allowing non-subscribers the ability to explore the breadth and depth of programs available on the service.
•Geographies – India, Germany and Japan: The Company will make WWE Network available across the Indian
subcontinent (India, Pakistan, Bangladesh, Sri Lanka, Nepal, Bhutan, Maldives and Afghanistan) on November 2nd, as well as Germany and Japan in January 2016, and continues to develop plans for geographic expansion to China, Thailand and the Philippines.
2015 Business Outlook
For the fourth quarter 2015, the Company expects ending paid network subscribers of approximately 1.2 million, representing essentially flat results from the third quarter 2015 and an approximate 50% increase from the end of the fourth quarter 2014. The Company also projects fourth quarter Adjusted OIBDA of approximately $4 million to $8 million. This performance would result in Adjusted OIBDA of $62 million to $66 million for the full year 2015.2