Vince McMahon and WWE Chief Financial Officer George Barrios held a conference call with investors on Tuesday morning to discuss the WWE Network. I was on the call on behalf of WrestlingNewsWorld.com and compiled the following notes:
- Michael Weitz opened the call by reading a prepared statement to open the conference call. He announced Vince McMahon and George Barrios. The presentation for the call is available at corporate.wwe.com. The call will feature forward looking statements and actual results may differ.
- Vince McMahon opened the call by thanking investors for their patience over the years. He said they almost did a linear model, then looked at a premium paid model and finally decided on the right model. The right model, being the over-the-top network we’re getting. Vince said they’re not advocates of anyone cutting the cord. He seemed to be referencing comments explained here.
- Vince talked about the WWE Network bringing back lapsed fans as well as bringing in people that couldn’t afford the higher price. Vince said the WWE Network will increase their television ratings, hopefully with the USA Network if they’re still with the USA Network. Vince reiterated their TV licensing fees are going up.
- George Barrios took over the call to talk the financial elements of the WWE Network. He mentioned being the first network broadcasting 24/7 exclusively on an over-the-top platform and put over a tailored experience through their on-demand video library.
- Barrios said the WWE Network will feature a 24/7 scheduled stream, live programming [through their 12 PPVs], original programming, access to a deep video library of programming. He said the $9.99/month price was very competitive.
- George Barrios said there are three main drivers their fans are ready for an over-the-top network – increasing consumption of OTT video content, very large active fan base and fans are already digitally engaged.
- Barrios noted on-demand video library will launch with 1500 hours of programming that will increase.
- George reiterated fans can subscribe to WWE Network beginning at 9 AM EST on Monday, February 24, 2014 on WWE.com and will be offered a limited of time one week free trial.
- Barrios noted WWE has entered into an agreement with MLB Advanced Media, a proven provider of OTT video services. He said they powered more than 25,000 live events in 2013. They’ve engaged with Harte-Hanks to provide customer support.
- Barrios noted the “stage one” international countries (United Kingdom, Canada, Australia, New Zealand, Singapore, Hong Kong and the Nordics) the WWE Network will launch in late 2014/early 2015 will provide an additional 750,000 – 1,500,000 subscribers at a steady state.
The call then went to a Q&A session with investors.
- Vince McMahon noted the value of Monday Night Raw from the USA Network has to do with live programming. There are no repeats of Raw that air on USA and they too feel the WWE Network will increase television ratings. Vince said the WWE Network will increase interest in their programming.
- George Barrios said they hope to announce a new TV licensing agreement in the United States by the end of April/early May. There is no equity agreement with MLB Advanced Media but they are providing a service for WWE. Barrios refused to discuss specifics of the agreement.
- Barrios said tiering their content has been something they’ve been good at. Their live programming is their first tier but the second tier on the WWE Network is for more passionate fans. Barrios said they are “pretty creative marketers” and will do things to promote the Network, starting with the one-week free trial. The one week free trial period will not be a week in which there is pay-per-view, Vince McMahon clarified.
- Barrios expects faster growth rates outside the United States but he’s still bullish on domestic growth.
- A lot of testing went into establishing the price points to come to the $9.99/month with a six month commitment.
- Vince McMahon said the positive response to the WWE Network has been “overwhelming”
- Barrios said they didn’t want to miss the run up to Wrestlemania in announcing the Network but the timing had to do with contracts. Barrios didn’t want to get into “contract gymnastics.”
- George wouldn’t divulge the response from their current pay-per-view providers. He said WWE is willing to work with them to continue distributing their pay-per-views. DirecTV’s public statement was acknowledged by a caller but George Barrios called the discussions private.
- In theory, the consumer could signup with the 6-month commitment at $9.99/month and cancel but George Barrios doesn’t think that will happen. Barrios said he’s confident in the company’s ability to execute. WWE doesn’t think consumers will back out after signing up.
- Barrios wouldn’t discuss specific agreements with streaming partners (such as Roku and Apple) but he said it’s a standard 70/30 split depending on where the subscription happens. If it happens outside the device, there will be no split.
- 1 million subscribers by the end of 2014 is a “pretty good target.”
- One unknown is how many providers are going to carry the WWE pay-per-views. Another is, how many consumers will adapt to the new technology.
- Daily WWE studio show is planned to hit the WWE Network “in a few months.”
- Subscribers will be able to prepay annually for a discount and will be able to give gift subscriptions to their friends.
- They’re holding to the $9.99/month rate, everything is included. There won’t be up-selling for more content within the WWE Network. The incorporation of their second screen experience through the WWE App gives them abilities to engage the viewer.
The call was closed by Michael Weitz.