Wrestlemania 30 Traditional PPV Buys

[Loss]

Looks like they did about 400,000 buys. I'm curious how this will be spun, but I see this as a big positive for WWE because it shows there are still quite a few potential customers that haven't jumped on board yet. Also, between the network and traditional PPV, they set a domestic record -- first time they've exceeded 1 million viewers.

 

I don't know what kind of data WWE gets from the cable companies other than the raw numbers, but if there's a way for them to get names, offering a free month of the network to anyone who bought the PPV traditionally and is willing to answer questions might be a worthwhile venture.

[Grimmas]

The article I saw basically said "we can met our million goal, because network and ppv buys equals our goal".

 

That's some positive news, since they were down after the Network number.

[kjh]

I'm not sure I quite buy the spin. Some people double dipped as they didn't have confidence that the WWE Network would be able to air WrestleMania 30 without a hitch. Some of those people may not have high speed broadband or are only interested in watching one pay-per-view a year. Also, it's very early to have accurate pay-per-view buy estimates, so the number could end up being on the high side. To hit a million subscribers, you'd need to convince 80-85% of those WrestleMania PPV viewers to pick up the Network. Unless they have a huge SummerSlam special attraction match, I can't see them hitting the mark until next year.

[NintendoLogic]

I'm pretty sure WM17 did over 1 million domestic.

[Loss]

Even if someone is only interested in watching Wrestlemania, they still come out ahead subscribing to the network. That's what I don't understand. Broadband access is an issue, but I think the bigger issue is fan education. It literally makes zero sense to pay six times as much for the exact same thing simply because you don't want as much of it.

[Loss]

I'm pretty sure WM17 did over 1 million domestic.

 

900K.

[kjh]

Fan education really shouldn't be an issue by next year's WrestleMania. I think an argument could be made that they made a mistake by rolling the Network out so close to WrestleMania. After Royal Rumble might have been better, but I guess they weren't ready by then.

[Jmare007]

Once they factor in international buys (500-550k aprox nornally) then this makes it the most watched PPV ever, right? (at least legally).

[Al]

Even if someone is only interested in watching Wrestlemania, they still come out ahead subscribing to the network. That's what I don't understand. Broadband access is an issue, but I think the bigger issue is fan education. It literally makes zero sense to pay six times as much for the exact same thing simply because you don't want as much of it.

It may not be as simple as that though. I watched it on my tablet, came out great. But if I want to watch it on my television, I have to invest $50-100 in the appropriate hardware. (And while I'm thinking of that, anyone have a recommendation on a Roku box?) Then there's getting the broadband data which is an additional expense, and may be capped by some ISPs. I'm perfectly happen with WWE Network, but ultimately I know it's actual cost is more than $10.

 

Let me add though that reports that Wrestlemania streamed perfectly should hopefully attract new subscribers.

[anarchistxx]

Even if someone is only interested in watching Wrestlemania, they still come out ahead subscribing to the network. That's what I don't understand. Broadband access is an issue, but I think the bigger issue is fan education. It literally makes zero sense to pay six times as much for the exact same thing simply because you don't want as much of it.

 

Watching through the traditional method is easier and simpler for customers who don't have the relevant hardware to play the network through their television. It is also guaranteed to be reliable, whereas there are always doubts when it comes to new streaming services that will be heavy on traffic. Watching on PPV doesn;t require a signup, is as easy as pressing a button on your cable remote, and it is the way people have done it for years. People are resistant to change. People will most often take the easy option even if it requires more expense.

 

The idea that fan education is the reason doesn't wash for me - they have shilled the network on Raw for weeks and weeks, with the commentators proviuding a step by step guide to how to sign up, the content and ways you can access it. People knew about the network, they knew what it entailed, yet they still preferred to stick with a tried and tested method that they know. People may have also wanted to record the show on DVR or back it up on disc, which would be very difficult with the network.

 

People may have clubbed in with friends to buy the PPV, and paid $10-15 each, way cheaper than a six month network committment that a casual fan may not use.

 

People will go out and spend £50 on a boxset of DVDs when they could subscribe to Netflix and get a hundred times the content for a lot less money. It isn't especially that they don't know about Netflix and how to use it; they just prefer to use an easy method which doesn't require any thought or change.

 

I made these points before Wrestlemania when I predicted the show would do a strong number.

[JNLister]

There's also the kids audience for whom "Dad, please can you order WrestleMania as a big special treat/Dad, I kinda hit the order button, that's OK right?" is an easier conversation that "Dad, can you use your credit card to pay for a subscription service so I can watch wrestling all day in the Internet/Dad, I borrowed your credit card, that's OK right?"

[Cross Face Chicken Wing]

Fan education really shouldn't be an issue by next year's WrestleMania. I think an argument could be made that they made a mistake by rolling the Network out so close to WrestleMania. After Royal Rumble might have been better, but I guess they weren't ready by then.

 

Never underestimate the stupidity of your fellow man. I guarantee there are a large number of wrestling fans who see all the commercials for WWE Network and still have no clue what it is.

 

"Derp, derp. Why would I subscribe to that new website? Derp, derp."

 

Fan education will remain a priority for WWE for the foreseeable future.

[Loss]

Not having the hardware is a valid point. WWE should do a cross promotional deal with Roku or one of the gaming consoles. Maybe include a promotional code for 50% the network with the purchase of a gaming console or other device. The number of PPV buyers is higher than I expected simply because I don't understand $9.99 for something versus $70.00 for something. That alone seems like it should be enough to sway everyone to the network, but I realize not everyone thinks like me.

 

Anarchist, Dave still gets letters posted on his site from people claiming they don't want to watch the network on their phones or tablets. There have been multiple reports of people calling cable companies asking about the WWE Network as well. Don't underestimate fan education. I knew people who watched wrestling every week during the Attitude Era that didn't know which Hardy Boy was which, didn't know the announcers had names, didn't know until I told them when Raw switched from USA to TNN despite it being mentioned many times, among other things. You'll never go broke underestimating how much people who watch wrestling actually pay attention to it.

 

I'm with jdw that doing those live ringside spots with Cole, Lawler and JBL is dumb. They should have a better produced pre-taped spot.

 

What I see as good news from all of this is that fan education is something that can be changed, the way the network is being promoted is something that can be improved, and 400,000 traditional buys is an indicator that the network hasn't hit the ceiling, despite the doomsday predictions of those who thought "Well, they offered Wrestlemania and still only got 667,000, so this is the best they can do." It's clearly not. I don't know if they are going to hit the 1 million number by the end of the year or not, and I don't know that those 400,000 are necessarily easy converts. This is uncharted territory. But I think it's a good indicator that there is still potential for growth.

 

If they haven't already, I suspect WWE will hire a lobbyist to push the expanded broadband access legislation that's been lingering in Congress forever. I also really think they need to find a way to survey the people who bought the PPV. We can all make assumptions on why those 400,000 bought the show, but WWE needs to find a way to hear it from them directly, which shouldn't be too hard.

[WingedEagle]

I thought 400K was shockingly positive. I would've expected something in the range of a 60-75% drop in domestic PPV buys. The hardware point is definitely interesting. I've got a PS3 which makes it easy, and if I didn't probably would've sprung for a Roku or the most cost effective means to have it on tv. But if I was limited to phone/ipad/computer? Definitely wouldn't be a fan.

 

Curious if they can get a read on how many potential customers are in that boat where the hardware makes it an issue. Or maybe I'm just jaded and watching on a small screen isn't the issue for some customers.

[KrisZ]

Darren Rovell and other sports business media types were all in on WWE's numbers yesterday and were calling it successful.

[cm funk]

Well, between the Network, domestic WM buys + international PPV buys this is going to be a huge quarter for WWE. I'm not surprised the traditional PPV did so well, streaming services are still uncharted waters for a lot of consumers. I also think the Network #'s will look pretty damn good once the international (especially UK, Canada, AUS) rolls out. Retention of that 2/3 of a million that subscribed is key now, of course.

[anarchistxx]

 

 

Anarchist, Dave still gets letters posted on his site from people claiming they don't want to watch the network on their phones or tablets.

 

I can see that. Until a month ago I was fairly unaware of things like Roku that let you stream stuff through your television, although I did know that some gaming consoles could be hooked up to do it. And I am pretty young and informed of technology/culture compared to a lot of people. Your idea of a cross promotional deal with one of the box providers is really good.

 

Personally, I think that most people are generally:

 

- Lazy

- Resistant to change

- Not engaged with latest technology

 

Fans of the WWE are also more likely to be in lower income brackets and therefore balk at the idea of having to sign up to a contract and buy additional hardware, plus might not have unlimited internet bandwith. They might erroneously consider that the traditional method is safer, easier and even cheaper - false economy is endemic in the working classes, doing something that seems cheaper at the time but actually ends up costing them a lot more.

 

There are also the people who buy on a whim, the people who club in together to reduce cost, the kids who don't care which is cheaper because the parents are paying and explaining and selling a subscription service to them is way harder than just asking them to buy the PPV as a treat.

 

 

 

You'll never go broke underestimating how much people who watch wrestling actually pay attention to it.

 

Are those type of fans ever going to sign up to the network though? If they are that casual and uninformed their attitude is likely to be 'I don't need and won't use the network, and can't be bothered to find out about it'.

[kjh]

Well, between the Network, domestic WM buys + international PPV buys this is going to be a huge quarter for WWE.

 

It will be a huge quarter for revenue for sure, but due to the costs of running the Network, it will be unlikely to be a profitable one.

[JNLister]

If you're feeling negative, you can spin the report by looking at the fact that if they could only get a million people to pay for a big and well-hyped WrestleMania in some form (PPV or network), it's hard to see how they can ever get much more than a million people subscribing to the network in the US. Certainly two million domestic subscribers seems ludicrous when you look at it that way.

[anarchistxx]

I also think they will lose a lot of subscribers after the first six months. There certainly won't be one million active subscribers by the end of the year, although they might get a million subscriptions in total at some point.

[mookeighana]

I made a bunch of assumptions and then ran all the numbers here: http://indeedwrestling.blogspot.com/2014/04/estimating-2014-profitability-for-wwe.html

 

Q1 = $13.3M (PPV) + $4.1M (OTT) = $17,446,000

Q2 = $28.4M (PPV) + $20.0M (OTT) = $48,408,000

Q3 = $10.6M (PPV) + $22.1M (OTT) = $32,628,000

Q4 = $8.8M (PPV) + $23.4M (OTT) = $32,243,000

TOTAL: $61.11M (PPV) + $69.61M (OTT) = $130,725,000

That'd be up 24% for Q1, 29% for Q2, 110% for Q3 and 123% for Q4. However, the added costs actually resulted in a lower OBIDA percentage ($37M on $130.7M revenue) than normal PPPV year (between $34.1M and $44.9M OBIDA on $78.3M to $83.6M revenue). Basically, you'd get about the same profit $ but you have to generate a lot more revenue. My calculations assumed that domestic B-PPVs would remain at 60% of baseline which I think is generous. I believe that the WM number suggests that Royal Rumble, Wrestlemania, SummerSlam have potentially large traditional PPV audiences, but with DirecTV taking a bite of the pie and the strongest hardcores (who normally buy the B-PPVs) more likely to migrate to the Network, I think we'll see a much larger cannibalization.

 

The Needham Research buy recommendation from yesterday only pegged PPV for 2014 at $40M, but I wrote my peace about how I think that paper grossly inflates some revenue streams.

[JNLister]

Also, a bad traditional PPV number for Extreme Rules could mean the cable/satellite firms feel confident about taking a stand by ditching WWE, safe in the knowledge they aren't really giving much up till SummerSlam.

[cm funk]

 

Well, between the Network, domestic WM buys + international PPV buys this is going to be a huge quarter for WWE.

 

It will be a huge quarter for revenue for sure, but due to the costs of running the Network, it will be unlikely to be a profitable one.

 

 

Well, it'll be interesting to see what the actual costs of running it end up being. All the startup investments they made were already absorbed in previous quarters. So it's going to be additional staff expenses, MLBAM, advertising and misc. costs. I have no idea what that will end up being on paper.

[Loss]

 

Well, between the Network, domestic WM buys + international PPV buys this is going to be a huge quarter for WWE.

 

It will be a huge quarter for revenue for sure, but due to the costs of running the Network, it will be unlikely to be a profitable one.

 

 

To be clear, that's not unexpected, nor is it really a bad thing.

[jdw]

I take this as a rather strongly positive number. Pretty sure I tried to get it across quite a few times in earlier threads that Mania was unlikely to crater in buys due to (i) International buys, and (ii) there still being a large number of Mania Party types who didn't want to risk it with the Network.

 

I also agree with the notion that a chunk these buys do represent potential future Network buyers. It's still the fact that:

 

"For the cost of Mania you get 5 other PPVs and all that other content for free!"

 

Selling that in the reverse is always tough: there are far fewer people interested in the other PPV and all that content than there are for Mania. But if you're tempted to buy Mania and/or even just one other Biggie a year, you're basically paying for the Network. Why not just get the Network: you get Mania, your other impulse buy or two... and all that other shit.

 

The question never really has been whether they can get to 1M subs by having Mania and all PPVs part of the network at $9.95 a month. That price point makes 1M a year very reasonable.

 

It was the 2M that was the bigger question, and how that 2M would be diced around the world.

 

Anyway... it's very difficult to call Mania at that buyrate and Network number as anything other than a success. They just now have to convert "buyers" into "subs". 1M by the end of the year remains very doable, especially if they book for spikes at SummerSlam (renewal) and Survivor (sealing new buyers).

 

John