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Major WWE Network Update, Wrestlemania Success & More

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Vince McMahon and George Barrios hosted a conference call with investors to discuss the status of the WWE Network following Wrestlemania 31 on Monday. I was on the call on behalf of Wrestling News World and compiled the following notes:

Michael Weitz opened the call by reading a prepared statement. He reminded listeners of the presentation on their corporate website that can be accessed at

Vince said Wrestlemania was a big success and touted nearly 77,000 in attendance and 142 worldwide trends on social media. He said they have surpassed 1.3 million WWE Network subscribers. They didn't want to just announced that, which is the reason for the call.

Vince went over the new original programs for the WWE Network, which we detailed at this link.

George Barrios took over the call and went over his notes about the aforementioned topics. He went over the success of free February, which converted over 70% into paid subscribers the following month. Barrios announced the WWE Network will be free to people that signup in April 2015. He talked about the WWE Network subscriber growth possibly following the seasonal variations they saw with their traditional pay-per-view model.

After Barrios wrapped, they began a Q&A session with callers.

The first person wanted to know about the eight new shows on the WWE Network. Is the overall budget going up for the new programs? Vince said their budget is flat for the projects. He said it's so much easier to attract talent now. He said they were first in this platform and they're way ahead of the curve and they're going to stay way ahead of it. It's easier for them to attract third parties as a result and it's good for growth.

The same caller asked about 1.3 million paid subscribers to the WWE Network. Barrios talked about Royal Rumble and WWE Fastlane over performing expectations. He talked about making less money with pay-per-views now $9.99 but talked about elasticity on the way to 3 million subscribers.

What percentage of the subscribers that were added in February are still with the Network? They haven't went public with that number.

Without putting a number on paper, what would they consider successful by the end of 2015? Barrios said that's a great question and said one day the Network will give them a ton of visibility and they can build their business on it. But today's isn't the day, it's so new and they were pioneers. Barrios said as long as they're showing good year over year growth, they're going to feel very good about WWE Network. He said they're going to look at it year over year, which is why they thought it was important to have this call because they can look at it from a one year benchmark.

A caller asked about a total number of new original series. Barrios started crunching budget numbers, which Vince McMahon said earlier in the call would remain flat. Barrios isn't getting in to line items but said they feel really good about their 8 new series but they'll learn from them.

The same caller asked what it would take to get to 3-4 million paid subscribers and a timeframe. Barrios talked about 100 million people being their total available market, so it's converting 3-4% of that to paid WWE Network subscribers. He would love to give the caller a timeframe but they obviously do not have that.

A caller asked if they were comfortable with WWE Network pricing. Barrios said they spent a lot of time thinking about what the right pricing model would be, which is what drove $9.99. Over the long arch of time and as the Network grows, a different price point could be but right now $9.99 is the right price.

The same caller wanted to know about differences in churn on international reach compared to what they experienced domestically. Barrios talked about it being different due to different macroeconomic conditions.

Barrios talked about China and India having unique opportunities for WWE. Barrios said they are already a strong brand in India, which is evident by it being their third largest TV deal. He said in China, because of it's scale and what you see happening, especially the digital players taking a more positive approach, it's been an interesting change from their perspective. A lot of western content has taken advantage of that as to how they go into China. Barrios talked about Netflix going in alone in China, which he found interesting.

A caller asked if they would need talent out of China to help the push into the region or if the western talent they have is strong enough. Vince McMahon said the star quality of their western talent is what people want to see. Vince said John Cena and Brock Lesnar are who they want to see. He said a Chinese talent would work if they make it. He said their audience can look at a talent on TV and tell whether or not they are a star, despite post-production.

Barrios said they would consider deals with other services such as Netflix to carry their original programming. Barrios said they're broad and really good at engaging.

With the slate of new programming, are they giving more consideration on new price points for the network? One that includes the pay-per-views and one that does not. Barrios said they are not and over time as they learn more, they might do different things. Right now, Barrios said they like the simplicity.

A caller wants to know about WWE's deal with TapouT. Barrios talked about it not working at first and finding the right opportunity. Barrios talked about demand for high performance fitness gear and said 2016 will be the real launch. Barrios said you'll see TapouT in a lot of places.

Barrios said they didn't give a WWE Network international subscriber number but will give it at the quarter.

They do not have Wrestlemania 31 data and won't get it for several days. Barrios talked about the declines through Royal Rumble because that has been published but they'll see where it is for Wrestlemania. $120 million is in the WWE Network segment and that's what it was last year and what it's going to be this year. Barrios didn't want to talk about line items.

Barrios said free November and free February worked very well but they'll have to wait and see over the next twelve months to see how the subscribers behaved. But the early success is why April will be free for new signups.

A caller asked Vince about criticism to the Wrestlemania 31 build but how the show is being praised as possibly the best Wrestlemania ever. Vince said it's all about content. He said you have to take what's going on social media with several grains of sand. He realizes they have their doubters but every Wrestlemania exceeds the one prior. Vince said they knew the drive to Wrestlemania 31 was more of a last-minute one and they knew that. He talked about things occurring last night (at Wrestlemania) that will carry into Wrestlemania 32 next year (which makes me thing about The Rock, Ronda Rousey, Triple H and Stephanie McMahon).

Asked about realigning with the cable providers, Barrios pointed to what they did in Canada with Rogers and what they did in the Middle East.

Barrios said they monitor streaming performance on the WWE Network in real time and it's performed rock solid.

Vince was asked about Sting being brought in because of what WWE Network subscribers were watching on-demand. He talked about taking Sting from obscurity to one of the main events at Wrestlemania. He said they're good at that and will continue that. He said that wasn't the only reason they brought Sting in.

Barrios said the WWE Network is now fully distributed across Canada.

With no more questions, the call was ended.

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