Want more wrestling news, rumors, and results? Be sure to visit PWInsider.com and PWInsiderXtra.com.
Welcome to PWInsider.com's live, ongloing coverage of WWE's investors conference call to discuss their fourth quarter of 2016 as well as 2016 as a whole.
Michael Weiss welcomed everyone to the call and introduced Vince McMahon.
Vince was happy about the record setting revenue for the company and put over that they are "super-servicing" WWE Network subscribers with new live events and programming like the WWE UK championship tournament and 205 Live. Interesting to note that 205 Live would create new revenue for live revenue, merchandising and licensing, so the long term plan is to try and spin that off as it's own entity, similar to NXT. Vince said that they have a lot of plans for UK fans as well. He gave no timetable for anything new with UK nor did they mention when they plan to tour 205 Live.
Vince ran down some of the numbers from the earnings, pushing their social media numbers, the amount of content fans are watching on the WWE Network and said they are grabbing more "land."
Vince said they had 101,000 plus at Wrestlemania when you include "ushers and ticket takers" but noted it was not 101,000 paid.
Vince said he is satisfied with their 2016 performance and they are looking forward to their 2017 growth.
George Barrios began reading highlights from the earning release.
They are the fifth largest streaming service.
The revenue leap was due to WWE Network subscribers and additional TV rights fees, including the debut of Total Bellas.
They have added 15 new "blue chip" advertisers over the last two years.
Snickers will be the official Wrestlemania sponsor.
Their digital metrics grew. They had 15 billion video views over social media platforms.
40% of their new recruits for talent came from outside the United States.
They had over 500 events on five continents in 2016.
They were the second best selling action figure property in the United States, behind only Star Wars.
They had 1.5 million paid WWE Networks subscribers at the end of January. They don't expect a huge surge in subscribers until Wrestlemania and they will provide a new subscriber number the day after Wrestlemania.
They had a 29% rise in WWEShop orders. I am guessing that is at least partially due to holiday shopping.
They have $267 million in cash reserves and investments. They raised $193 million in their recent offerings to investors.
They opened the line for questions. Here we go!
They were asked if they could talk about the metrics around the WWE UK Tournament and what sort of momentum they received from subscriptions and whether there was an uplift from other parts of the world. They were also asked about the WWE UK brand and how soon will they continue building towards a weekly series and whether it would be on the WWE Network or on Sky. Barrios said it did well with subscriber and engagement metrics. They saw an uptick in the UK and had good consumption around the world for the tournament. It was a case of them superserving their "most passionate" fans.
In regard to capitalizing on the momentum, Vince said they already have. Vince said he has by integrating the talent from the tournament on other areas of WWE programming. He said they are thinking about a weekly show but it's not something they have announced yet. He said there might be "other Europeans who might join in the future" teasing the idea of a brand beyond just WWE UK.
They were asked about the promotion for three months free of the Network for returning subscribers and whether they were included in the current numbers. Barrios said you'll see different promotions as experiments to bring people to or back to the Network. He said the numbers include "some" of the free to paid subscription conversions.
They were asked about their strategic investments over the year. Barrios said they have timing elements to it, so the first quarter has a little more year over year. They are always working to balance their short term results with investing in the future.
They were asked if they were going to continue growing live event in 2017 and if so, what markets will they be in. They were also asked why there were more live events in the last quarter, but they were less profitable compared to previous quarters. Barrios said there would be an increase in events because of the brand split. Barrios said they increased spending in marketing for events for the end of 2016 and early 2017 so some of the timing, including the Royal Rumble push, come up as expenditures for the final quarter of 2016.
It was noted they accurately predicted their subscriber growth for 2016 well in advance and were asked to give guidance on subscriber growth for 2017. Barrios said they didn't predict the levels but gave hypocritical scenarios and it turned out subs came within that range but they won't take credit for being that accurate. This year, they feel "more and more comfortable" with giving sub growth. They won't give sub guidance beyond that. They aren't being conservative by not giving guidance for February and March but know that big events like Wrestlemania drive the machine.
They were asked about the idea of having the Network bundled by another service, similar to what Amazon Prime does with others, charging as an additional fee. Barrios said their perspective on deals like that come down to the economics, sharing of the customer information and the sharing of consumption of the content. As they grow towards direct to customer via the Network, they don't want to do a deal like that across other platforms. They are getting lots of data content and details and they don't want make moves that would prevent having that knowledge. He declined to specifically speak about Amazon, for the record.
They were asked why they are holding so much money in the war chest. Barrios mentioned potential expenditures, such as the building they acquired that houses their production facility. He said that they have found that having a balance sheet with signifigant cash on it helps them as they work with larger companies to show they have the strength needed.
They were asked where the strongest growth from international markets were. They declined to comment on that but pointed out its an English language product for the most part and doesn't offer downloadable content. They are starting to offer more localized content such as PPVs with other languages the next day and the UK content.
Barrios declined to comment on potential federal tax changes from the federal guidance.
Vince was specifically asked about the UK show and how many different markets does he believe they could do this in. She asked whether this means UK talent could appear on Wrestlemania as "Asian talent" has in the past. Vince said the UK tournament allows them to capitalize on both specific and larger pools of talents. He said it may morph into more of a European style show. He said they could do more live events and have more growth in those markets with those talents. He said it's their first attempt to do such a thing. He said Triple H has done a great job tapping international talent but this is the first time they are moving back into those markets with specific talents.
They were asked about advertising on the Network. Barrios said their best path to monetization is continuing to grow subscribers for the WWE Network. They will continue to have light ads on the Network at this time.
They were asked if they were going to do anything special to get people to Wrestlemania to help the overall Network. Barrios said they will keep the model of 30 days free for new subscribers and will be trying different strategies and experiments.
They were asked if they have a gauge of fan interest going into Wrestlemania compared to last year with so many injuries. The caller specifically mentioned "The Goldberg effect" and his momentum. Vince said there is no one talent that "keeps this big wheel turning" but they have more momentum this year compared to last year, since there are fewer injuries and more players and storylines to use.
McMahon said the brand extention is "working extremely well" and they are seeing new viewers coming on board for Smackdown, which is what they wanted and are doing. If more watch one, they will watch the other. They have fresh talent when one shifts from Raw to Smackdown and vice versa. He said the intellectual property and the creative way they use talents are fresher thanks to the brand extension. He said that it makes them develop new talents as opposed to keeping the same names on top all the time. It allows for more tours Smackdown being a live show now means the ratings have been extraordinarily good.
They were asked about the international language versions of the PPV. They put them up ASAP after the PPVs finish and they have some surprises coming and you'll probably see more localization in some form.
That was it. This was easily the longest call in some time and the most questions since I can remember.
Nothing was asked about the plan to bring independent wrestling to the Network or about increasing the cost of the network with different tiers.
Keep refreshing for the latest updates and thank you for your support of PWInsider.com!
If you enjoy PWInsider.com you can check out the AD-FREE PWInsider Elite section, which features exclusive audio updates, news, our critically acclaimed podcasts, interviews and more by clicking here!
Bang On Casino
