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#21 mookeighana

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Posted 07 April 2014 - 02:17 PM

If you're interested in BREAKING NEWS AUDIO, Bix & I (and Rich from Voicesofwrestling) just did a one-hour #wrestlenomics Radio show all about the WWE Network Subscription #s: http://www.blogtalkr...ibers-announced
 
Direct MP3 link:


#22 mookeighana

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Posted 07 April 2014 - 02:18 PM

Also, Bix's piece about the WWE Network subscriber numbers is up at Bleacherreport: 

 

http://bleacherrepor...rs-announcement



#23 jdw

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Posted 07 April 2014 - 02:22 PM

I am less pessimistic about the number, unless the "1M" for the end of the year was a bullshit number that the WWE set that could but easily topped with a more impressive number such as 1.25M-1.5M mentioned earlier.  If 1M is a real goal, then 2/3rds of them being paying customers right now is perfectly fine.

 

That 300K estimate for initial subs isn't a valid on: that was a trial, and there likely always was going to be some who just didn't pay.  There always are a chunk of people who sub to something that's "free" and then opt out before it's time to get hit on their credit cards.

 

This is all a bit odd: I'm typically the most pessimistic jaded person on that board. :)



#24 mookeighana

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Posted 07 April 2014 - 02:22 PM

I feel like moving Wrestlemania off of the network -- or raising the price -- would backfire in an enormous way. How do they justify that to the people who are already subscribing? That's not what they signed up for.

I think messaging is a huge piece.  Part of this is that hardcore fans aren't going to skip Wrestlemania, even if it costs them more. If you have the right main event (something wacky, like Cena vs Austin), you could definitely justify it.  

 

I fear that putting WM on the Network every year basically commoditizes it so it's not a special event. That's what Dana complained about and I think he's right (in this instance).  In lieu of a price increase, I'd rather WM was not on the Network and just took two weeks until it was up for replays. Especially if the Network focuses more on older content (Nitros, Raws) or even up-to-date replays (next day Raw, next day Smackdown) they can keep people hooked without leaving everything dependent on a single variable (i.e. Wrestlemania).

 

The key is that you can't just bait & switch people.  But you've a year now to figure this out.  I would imagine with the int'l launch being late 2014, they won't endanger things by stripping WM off in 2015, but if they did, they'd have a powerful bargining chip to offer the MVPDs for the rest of the year about why they should keep carrying their b-PPVs.



#25 mookeighana

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Posted 07 April 2014 - 02:35 PM

I am less pessimistic about the number, unless the "1M" for the end of the year was a bullshit number that the WWE set that could but easily topped with a more impressive number such as 1.25M-1.5M mentioned earlier.  If 1M is a real goal, then 2/3rds of them being paying customers right now is perfectly fine.

 

That 300K estimate for initial subs isn't a valid on: that was a trial, and there likely always was going to be some who just didn't pay.  There always are a chunk of people who sub to something that's "free" and then opt out before it's time to get hit on their credit cards.

 

This is all a bit odd: I'm typically the most pessimistic jaded person on that board. :)

 

Last night I told my wife that I expected to feel really, really stupid this morning when they announced the subscriber number. I was worried that I had been too pessimistic and that I was going to look foolish for ever suggesting they wouldn't be near a million by Dec 2014. After all, the Wrestling Observer Radio was practically promising that numbers looked great.  So, I part of this is probably just my version of a huge sigh of relief that even if I don't really just the zany stock price assumptions, at least some of this still makes sense.

 

As for the 300K first-day(s) estimate, I am hoping we'll learn more in the next financial filing or KPI release. I still think the cancel rate was only 10-15% for the free trials, but wrestling fans can be a bitchy & stingy bunch. ;)



#26 jdw

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Posted 07 April 2014 - 02:36 PM

From Bix's piece:

 

Replace the segment with the announcers showing off the network in the app and on WWE.com with Renee Young at a TV backstage and all of the major compatible devices on a table.  Show her using the network on one of them (the interface is pretty much the same across all devices), pointing the remote at the TV, and other little thing you can do to get the message across that the service is designed for lean-back viewing on a TV.

 

 

It's kind of funny: I don't watch WWE programing, but when I did flip over for some reason in the past week or so, I did happen to hit it during that segment. And I have to say... it was an *awful* segment in getting across the network. In fact, it probably risked turning off some fans because it wasn't easy for Cole to get stuff.

 

What they really should so is akin to what you say: a taped segment walking through the Networks.  It's freaking WWE Production, so they should be able to make a segment (or several of them) that make the Network look easy, fun, smooth, etc.

 

The problem is that WWE Creative, and most of the folks running the company, have such a massive boner for LIVE~! So they think Cole & Co. would suck the fans in. That's dumb ass, and they need to get beyond it.  Use Raw & SmackDown to market to product like you would, you know... marketing a product. :)

 

John



#27 Bix

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Posted 07 April 2014 - 02:42 PM

From Bix's piece:

 

Replace the segment with the announcers showing off the network in the app and on WWE.com with Renee Young at a TV backstage and all of the major compatible devices on a table.  Show her using the network on one of them (the interface is pretty much the same across all devices), pointing the remote at the TV, and other little thing you can do to get the message across that the service is designed for lean-back viewing on a TV.

 

 

It's kind of funny: I don't watch WWE programing, but when I did flip over for some reason in the past week or so, I did happen to hit it during that segment. And I have to say... it was an *awful* segment in getting across the network. In fact, it probably risked turning off some fans because it wasn't easy for Cole to get stuff.

 

What they really should so is akin to what you say: a taped segment walking through the Networks.  It's freaking WWE Production, so they should be able to make a segment (or several of them) that make the Network look easy, fun, smooth, etc.

 

The problem is that WWE Creative, and most of the folks running the company, have such a massive boner for LIVE~! So they think Cole & Co. would suck the fans in. That's dumb ass, and they need to get beyond it.  Use Raw & SmackDown to market to product like you would, you know... marketing a product. :)

 

John

They can even do it live, whether it's backstage or she has an area by the stage.  The point is that as much as WWE thought they needed to hold everyone's hands with videos like "here's how to connect to wi-fi," it wasn't nearly enough.  They need to see someone (preferably Young, who's better for this than Cole/Lawler/JBL anyway) watching on a TV, pointing the remote, moving through the UI, etc.



#28 Loss

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Posted 07 April 2014 - 02:45 PM

On a side note, John, have you caught Renee Young on WWE TV? I think you would like her. :)



#29 jdw

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Posted 07 April 2014 - 02:50 PM

 

I am less pessimistic about the number, unless the "1M" for the end of the year was a bullshit number that the WWE set that could but easily topped with a more impressive number such as 1.25M-1.5M mentioned earlier.  If 1M is a real goal, then 2/3rds of them being paying customers right now is perfectly fine.

 

That 300K estimate for initial subs isn't a valid on: that was a trial, and there likely always was going to be some who just didn't pay.  There always are a chunk of people who sub to something that's "free" and then opt out before it's time to get hit on their credit cards.

 

This is all a bit odd: I'm typically the most pessimistic jaded person on that board. :)

 

Last night I told my wife that I expected to feel really, really stupid this morning when they announced the subscriber number. I was worried that I had been too pessimistic and that I was going to look foolish for ever suggesting they wouldn't be near a million by Dec 2014. After all, the Wrestling Observer Radio was practically promising that numbers looked great.  So, I part of this is probably just my version of a huge sigh of relief that even if I don't really just the zany stock price assumptions, at least some of this still makes sense.

 

As for the 300K first-day(s) estimate, I am hoping we'll learn more in the next financial filing or KPI release. I still think the cancel rate was only 10-15% for the free trials, but wrestling fans can be a bitchy & stingy bunch. ;)

 

 

I thought your original 650K number was a reasonable, and none of the bullshit since them made me think it was likely the number would be off the chains larger than that.

 

I also think that some probably overrated the conversion rather of WWE Domestic Mania PPV Buying Households to WWE Domestic Network Buying Households. I thought it unlikely that there would be an insanely massive mad dog rush to sub, and instead that we'd still see a chunk of people buying the PPV.  Why? Because it's Mania, which is the biggest (and frankly only) major "house party" even of the WWE's.  There's always going to be a chunk of fans who don't want to risk the network going to shit when they've got 6+ buddies coming over to what the show.  It would flat out suck to host, and then not be able to hook up, and then scrambling to try to order it through your cable company.

 

I think Mania was a terrific hook to get people to sub.  667K is a really good hook.  Now they need keep hooking folks who bought Mania via PPV, and entice them with "you get these next PPV for free" when ordering the network.  And of course retain subs.

 

I don't think retention will be a massive problem unless the Product (not the network, but all of the WWE) drives fans away. It is as we've all said too good of a value.  People who are of the habit of buying Mania, say the Rumble, and maybe 2 other PPV in the year now have access to All of them. They might not watch all of them live, but the ability to watch the PPV that they in the past would have skipped because the $$$ ran up pretty fast at $49.99 a pop... that's pretty alluring.  If the Product stays enjoyable enough to draw the ratings that Raw and SmackDown currently do, then retention at $9.95 isn't that hard.

 

The hard is sucking them in.  They just sucked in 2/3rds of them.  That's not bad at all.

 

* * * * *

 

On the point of taking Mania of, I tend to think it's a bad idea.  PPV is slowly dying, and will eventually eat away at Mania as well.  Converting traditional Mania buyers into Network buyers is a smart long term plan.  There's far more money to be made long term on the Network.

 

* * * * *

 

On the "rise the price", this is wrong time for it.  I would avoid it until forced like Netflix to pay for premium speed. The WWE will have to take a chunk of their $9.95 and hand it over to the carriers.  That is the time to raise the price.  They want to hold off on doing that until there's flat out the need, rather than doing it before and then having to do it again.



#30 jdw

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Posted 07 April 2014 - 02:55 PM

 

They can even do it live, whether it's backstage or she has an area by the stage.  The point is that as much as WWE thought they needed to hold everyone's hands with videos like "here's how to connect to wi-fi," it wasn't nearly enough.  They need to see someone (preferably Young, who's better for this than Cole/Lawler/JBL anyway) watching on a TV, pointing the remote, moving through the UI, etc.

 

 

Totally disagree about doing it "Live".  They're selling the network, and having a limited time in each segment to sell it.  You want everything to be perfect. You don't want botched lines, you don't want someone getting nervous as they're clicking away... you want it to be perfect.

 

As a Buyer, do you give a shit if it's live?  I'm looking at that Audi commercial with the British Heels, and do you think anyone watching it goes,

 

"I wish Loki, Gandhi and that other dude were doing this spot live."

 

No, they don't.

 

Tape. Take as many takes as need to be done to nail it, and edit the shit out of it. Then create another one. Take as many takes as are needed. Wash, rinse repeat.  Screw feeling the need that everything needs to be Live~!

 

Not Live, but probably the best commercial of the holidays for a product that drawfs what Vince in his wildest wet dream will ever make:

 

 

:/

 

John



#31 Bix

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Posted 07 April 2014 - 03:05 PM

Just saying if it's a hurdle for them like you suggested it might be, it doesn't have to be.  I'm sure Renee Young can hit time cues.



#32 jdw

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Posted 07 April 2014 - 05:09 PM

On a side note, John, have you caught Renee Young on WWE TV? I think you would like her. :)

 

As in she's good, or she's cute, or she's cute & good?  :)



#33 Loss

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Posted 07 April 2014 - 05:11 PM

Both, actually. I'd be very interested in hearing more on what you think of her when you get the chance to check her out.



#34 JNLister

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Posted 07 April 2014 - 05:16 PM

I don't buy losing a significant number of subscribers in August/September, simply because you have to actively make the decision to cancel (and remember to do it before the six months is up.) If they were relying on people having to actively resubscribe, it would be a different matter.



#35 Matt Farmer

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Posted 07 April 2014 - 05:44 PM

I am less pessimistic about the number, unless the "1M" for the end of the year was a bullshit number that the WWE set that could but easily topped with a more impressive number such as 1.25M-1.5M mentioned earlier.  If 1M is a real goal, then 2/3rds of them being paying customers right now is perfectly fine.
 
That 300K estimate for initial subs isn't a valid on: that was a trial, and there likely always was going to be some who just didn't pay.  There always are a chunk of people who sub to something that's "free" and then opt out before it's time to get hit on their credit cards.
 
This is all a bit odd: I'm typically the most pessimistic jaded person on that board. :)


I am too John, it probably boils down to how long we have been following the business. Being a pessimist is something he need to have to follow the business end lf the industry because everythings a work. That's how Vince's mind works so I'm pessimistic about numbers the company reveals publicly.

if the 600,000k number is accurate I would be extremely happy if I was WWE. I've always felt a subscription service like this has a ceiling
on it, and I think that ceiling is lower than WWE thinks.

#36 jdw

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Posted 07 April 2014 - 06:12 PM

Both, actually. I'd be very interested in hearing more on what you think of her when you get the chance to check her out.

 

At some point I'll get the Network. I'd have to find a show she's on that I'd actually want to watch.  :)



#37 jdw

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Posted 07 April 2014 - 06:15 PM

I don't buy losing a significant number of subscribers in August/September, simply because you have to actively make the decision to cancel (and remember to do it before the six months is up.) If they were relying on people having to actively resubscribe, it would be a different matter.

 

If it's just an auto-renew on the card, they'll have little bleeding. If you have to once again "opt-in", then they might have some bleeding.

 

We'll likely get a loaded up SummerSlam and Survivor, and probably will from here on out. I wouldn't say that they'll downgrade the Rumble, but it's so close to Mania that it adds just 2 months to a subscription. It's going to be in the area in the six months *after* Mania when subs will expire each year where they will make the effort to spike renewals and new subs.  In a sense Off Season, while Mania would been the Season.

 

John



#38 jdw

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Posted 07 April 2014 - 06:41 PM

 

I am too John, it probably boils down to how long we have been following the business. Being a pessimist is something he need to have to follow the business end lf the industry because everythings a work. That's how Vince's mind works so I'm pessimistic about numbers the company reveals publicly.

if the 600,000k number is accurate I would be extremely happy if I was WWE. I've always felt a subscription service like this has a ceiling
on it, and I think that ceiling is lower than WWE thinks.

 

 

I tend to think the eventual ceiling is quite a bit higher than 600K at this price point ($9.95 a month).

 

I had a Double Whopper with cheese, medium combo for lunch with a couple of co-workers. It was somewhere between $8.50 to $9.00 with tax.  That's lunch... one day.  If we went to Togos, I would have spent more for a combo. When we go to our favorite sit down Mexican place, it's going to be $12+, then toss in some tip for my combo.  While I can get food for a hell of a lot cheaper, and of course do when I bring something in from home, a $10 meal isn't terribly uncommon, and isn't like I'm splurging. We spent a lot more per person at Wood Ranch Grill on Saturday night, and that's not even an really expensive BBQ/Steak place.

 

$9.95 a month is insanely cheap.

 

When thinking back in the past about the WWE pricing the Network to cover for PPV's moving there, I don't think any of us thought it would be $9.95. PPV dvd's weren't even that low.  That's priced to move.

 

So at that price, they have quite a ceiling.  They also haven't even begun to scratch the surface of "content" to put on the Network.

 

Think of it in these terms.  Let's that once the WWE Network gets to Subscriber Equilibrium under their current model of PPV + Modest New Content.  They get to a certain number, and it makes them a certain profit.  So okay... they're looking for something to spike some addition new subs.  Let's say...

 

They have a new Programing Idea that costs them $10M a year to produce.  That spikes subs by 200K.  Nothing through the roof, but a new 200K that are drawn in by that.

 

200,000 * $9.95 a month * 12 months = $23,880,000 New Revenue

 

$23,880,000 - $10,000,000 cost = $13,880,000 "Profit"

 

Their current PPV Revenue is $82.5M, of which $66.9M was domestic.  The profit (OIBDA) was $34M, which was down quite a bit from 2012.  Anway, if you can spike 200K a month in Subs on something you invest $10M a year on, that's not a small chunk of revenue... and it's right into your own pockets without the middle men.

 

That's where the WWE wants to get to: (i) find Subscriber Equilibrium, and (ii) then figure out what low cost "exclusive" things they can do to add more subs.  On some of this, they don't really need to think big.  Down the road they might want to see if they can find their Walking Dead or Duck Dynasty that is an insane cult hit drawing millions and millions. But really it's probably wiser to after finding Subscriber Equilibrium to find some additional small hooks that start pulling in more of the viewers who regularly watch Raw & Nitro, but have been holding out on the Network.

 

This being the WWE, of course they're far more likely to try to Think Big and instead piss away $20M on something that adds only 100K subs, which only makes them just under $2M in profit.



#39 Bix

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Posted 07 April 2014 - 06:53 PM

 

I don't buy losing a significant number of subscribers in August/September, simply because you have to actively make the decision to cancel (and remember to do it before the six months is up.) If they were relying on people having to actively resubscribe, it would be a different matter.

 

If it's just an auto-renew on the card, they'll have little bleeding. If you have to once again "opt-in", then they might have some bleeding.

 

We'll likely get a loaded up SummerSlam and Survivor, and probably will from here on out. I wouldn't say that they'll downgrade the Rumble, but it's so close to Mania that it adds just 2 months to a subscription. It's going to be in the area in the six months *after* Mania when subs will expire each year where they will make the effort to spike renewals and new subs.  In a sense Off Season, while Mania would been the Season.

It'll auto-renew like these services always do.



#40 jdw

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Posted 07 April 2014 - 07:30 PM

 

 

I don't buy losing a significant number of subscribers in August/September, simply because you have to actively make the decision to cancel (and remember to do it before the six months is up.) If they were relying on people having to actively resubscribe, it would be a different matter.

 

If it's just an auto-renew on the card, they'll have little bleeding. If you have to once again "opt-in", then they might have some bleeding.

 

We'll likely get a loaded up SummerSlam and Survivor, and probably will from here on out. I wouldn't say that they'll downgrade the Rumble, but it's so close to Mania that it adds just 2 months to a subscription. It's going to be in the area in the six months *after* Mania when subs will expire each year where they will make the effort to spike renewals and new subs.  In a sense Off Season, while Mania would been the Season.

It'll auto-renew like these services always do.

 

 

Most do. I've seen a number of file sharing sites that had 30 day non-renewable.  Now that probably is due to the credit card companies not autorenewing with the site (i.e. it needing Visa Verify), so the sites force you to renew.  Something like the WWE... yeah, it make sense and I certainly would have set it up that way if I'm the WWE.  :)






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