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Welcome to PWInsider.com's coverage of the WWE conference call to discuss their second quarter earnings for 2017.
Michael Weiss welcomed everyone and sent it over to the Grand Poobah, Vince McMahon.
Vince praised the quarter and put over Paul Levesque for his work on the women's division, including the Mae Young Classic. Vince acknowledged they are growing a female audience and said it was something they haven't necessarily done well in the past but they are changing and evolving that. He said the quarter hours show that fans are responding to the female talents.
Vince put over the new localized shows in the Middle East and India and that the company is seeking to do similar series in other markets. He also praised the digital view and made it clear that is part of their strategy.
George Barrios recapped the quarter's numbers.
Michelle Wilson said they had great progress in the second quarter and have had increased monetization of their content with their different partners and platforms. WWE Network produced 75 hours of new content including 205 Live and the WWE UK special. She pushed that they recently produced the Mae Young Classic, which would debut next month. She pushed the localized programming for the Middle East and India territories. The Bellas' Youtube channel has doubled in subscribers. They will debut a Snapchat series later this year (which PWInsider.com broke a few months ago) and are working with a new company to work on building new global sponsorships. They launched the Tapmania mobile game with Sega last week.
They opened up for questions.
They were asked if there were any investments they didn't see positive returns from. Barrios said they invest looking for a long-term return and take their time. They feel they have more areas they can invest in than not and they are seeking to drive future growth. They are not at a loss for opportunities to invest.
They were asked about blue chip advertisers. Michelle Wilson said they remain one of the few opportunities for advertisers that is TV-PG. She feels that advertisers have a better idea of what they are about now. They are working to secure more global sponsors via their partnership with Lagardère Sports as that is something they haven't been able to do thus far at the level they want.
They were asked about the international shows and how they are doing. They praised them and reiterated they are looking at doing more.
They were asked about getting WWE Network subscribers up. Barrios said they are getting smarter at communicating to their subscribers. They have a lot of ideas and they are going to continue to provide new, fun content for subscribers. Barrios said direct to consumer over the next ten years is a big opportunity for the company.
They were asked about the idea of moving WWE programming to a digital platform, such as Facebook, when the rights come up. Barrios said that Raw and Smackdown is their biggest and most profitable revenue stream. That is their biggest monetization. When they look at different platforms, they look at whether their fans are there and whether they would consume long form content there. They thought 5-7 years ago that they staked out a position with social and digital platforms as well as direct to consumer. He feels that eventually, those platforms will means as much as TV does now and that's why they are placing themselves there, because of that eventuality.
They continue to look at localized programming as a way to grow revenue in different areas. They want to look at ways to build personalized content for subscribers, such as delivering them content for their favorite talent. Barrios described the success of the show in India as a "big win" for WWE.
They were asked where things stand with the UK brand as a weekly series and touring brand. Barrios said they have places to invest and that includes creating new content globally as well as data and analytics. They are good at trying things and will continue to play with that and try to build upon it. So, no real update.
They were asked how big of an opportunity the relationship with Lagardère Sports is in terms of global sponsorships. Wilson said they have great relationships in international markets and they see the opportunity in working with WWE, but they are looking at working, at first, with companies that have international reach who they are already working with.
They were asked about a breakdown of original content for the Network. Barrios said they have produced about 300 hours of original content for the Network a year. Some hours are more expensive than others, which shifts some of the money from quarter to quarter.
They were asked about the Wrestlemania promotion and how it worked in terms of holding onto subscribers this year. Barrios said that they use that as a big funnel system since its a big period for the company but declined to give further details.
They were asked about the new business models for things like Snapchat and Youtube. Barrios didn't want to get into specifics but they have done both revenue sharing and licensing fees. The trend seems to be that some of these digital platforms will eventually pay for licensing but they aren't there yet. Michelle Wilson said they are looking at it as building partnerships with companies they work with, such as KFC and Crickett who want something beyond just 30 second commercials.
They were asked about the drop in the WWE Network subs and whether they were elevated. Barrios said it's only been three years but they have learned the Q2 churn is higher because you are dealing with an influx of people who want to watch Wrestlemania.
They were asked about the progress in China of late but are only doing one live show per year. They were asked about the appetitite for content there and the potential of doing more live events there. Barrios said they aren't going to get into individual countries but they are in an "early days" era for China. It's moved from an early developing market for them into something they are starting to monetize. They are putting more boots on the ground with. It's something they are working on but they only have so many days a year they can tour. They have to make choices because they are "popular in every country on Earth."
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