Notes & Highlights From WWE's Conference Call Reporting Network Numbers

I listened in on WWE's conference call yesterday when the company reported the WWE Network numbers and here are some of the highlights below. A lot of it was related to their ongoing strategy with the Network but some interesting questions were asked about their programming as well as talent such as Ronda Rousey. They were also asked about UFC and the Conor McGregor incident.

  • Michael Weitz introduced George Barrios, who wanted to give an update on the WWE Network and outlook. He said WrestleMania was a success, breaking several records.

  • He announced that WWE Network has reached a new record of more than 2.1 million subscribers, up 9% from last year and their overall guidance was up for the rest of 2018, revenue wise.

  • He said expected a further 8% increase in paid network subscribers in quarter two year-over-year. This would be under the assumption of past trends.

  • He stressed that the Network is the hub of their consumer strategy moving forward.

  • The first question asked what WWE attributes the trends to and the US vs. international trends. Barrios said that they will talk in more detail on the US/global results on the Q1 call in a few weeks. As far as international strategy, it's not just about tapping into a country, but going local and he pointed to India with 30+ languages as an example. He then said that they are looking long term and not worried so much about quarter to quarter results.

  • Another question asked about Facebook metrics getting better and better and whether that platform could be a partner for Raw and Smackdown, especially in light of the recent privacy concerns around Facebook. Barrios said that they were the first to do live sports on Facebook and are satisfied with the numbers and that people are getting comfortable watching on that platform. In terms of the privacy, it doesn't impact WWE directly but they will watch and see how it develops. Michelle Wilson added that they are happy with Facebook, but the real opportunity is to use that engagement to drive WWE's other lines of business.

  • They were asked about the ten year deal with Saudi Arabia and whether it is a template for future deals. Another question was asked about the increased number of hours watched on the WWE network leading into WrestleMania, specifically why the engagement length grew faster than the subscription increase. They said the Saudi Arabia event will happen in Q2 and they will talk about that at another time but different markets have stronger platforms and Saudi Arabia is one place where YouTube usage is high. They commented that the engagement length is due to the number of new subscribers that signed up leading to WrestleMania 34.

  • They were asked whether gaining more data has helped the company in lowering subscriber churn. George commented yes that the smarter they get in engaging folks learning of their viewing habits, they will get better and better retention numbers. Michelle added that because they know what people are watching, it affects what sort of products they will continue to roll out.

  • Someone asked them what drove the success of the quarter and subscriber base and what they did differently this year. George said came into this year with a lot of momentum and it has intensified in the quarter. Live events are up, digital advertising is also up as well as sponsorship revenue. Some of it is timing that they will give back at the end of the year. Michelle said they are constantly refining their marketing but with WrestleMania, there was a great card with Ronda Rousey making her debut and Daniel Bryan coming back to wrestling. Those attractions let them get the message out and that obviously gave them a tremendous opportunity to drive new subscribers. She talked about how they communicated the free trial in different ways than in the past. As far as retention of subscribers, they were able to understand what subscribers want - what they want on cards by keeping them on board. There is a lot of new content coming and one of the feedback they heard was to bring the two brands together on one PPV so that starting with their next event, the PPVs will be represented by both brands and she attributed that to direct market research.

  • The next question was on their plans to tier content on the WWE Network and how they will monetize beyond subscription fees. George said there is no launch date but stay tuned as it's coming sooner rather than later.

  • They were asked about other plans to expand into other markets, apart from Saudi Arabia. George said it doesn't take a lot to see where WWE is popular like India, the Middle East and Southeast Asia. He talked about how the GDP of a country grows, the media sector grows and it's hard to predict but the trends are pretty clear. He said they will keep trying to go deeper and deeper and there will be opportunities like the one in Saudi Arabia.

  • A caller asked about the additional subscribers that WWE has been gaining and how much of that increase is first time subscribers vs. returning. George said they don't get disclose those statistics or to that level of detail but they get both. He then asked about the women's matches on WrestleMania and said that based on online reviews, whether there is a problem finding airtime for the women. Barrios talked about Rousey's debut but didn't really answer the question. Michelle chipped in said there is a lot of internal discussions on the women and they are looking to present the females in ways they haven't done before.

  • They were asked about their perspective on the UFC deal with Fox and the Conor McGregor incident and whether that is a potential negative as it relates to UFC's TV negotiations. George said there isn't any relationship as WWE focuses on what they do and he doesn't have any comment on UFC or their talent. The same caller asked if Ronda Rousey is open to other roles beyond wrestling. George said let's wait for the data to come in but the general consensus on social media is that Rousey's debut was great and her focus is being the best wrestler. Whether anything further comes down the line, they will deal with that later but for now, it's just wrestling.

  • The final caller said that going into this year's WrestleMania, TV ratings were strong and whether they were more optimistic on their retention numbers. George said they have made a lot of investments in their talent acquisition and development as well as all the different areas they are recruiting from. They believe the more diverse and deeper the talent pool, the greater the opportunity for the company. He talked about in the past, there was an issue in getting the talent exposed on TV but today those limitations don't exist and they are able to get their talent in front of their fans. He expects more and more talent to continue to come through their pipeline.