This guy is a little more optimistic about wwe.
http://www.fool.com/investing/general/2014/05/20/when-will-the-wwe-network-break-even.aspx
Mostly the same stuff, but still interesting.
This guy is a little more optimistic about wwe.
http://www.fool.com/investing/general/2014/05/20/when-will-the-wwe-network-break-even.aspx
Mostly the same stuff, but still interesting.
"The break-even number, Barrios explained, assumes that all global revenue for pay per views (about $80 million a year) would be cannibalized by the network."
ReplyDeleteExactly what i've been saying all along. That 80 million dollars generated by PPV in 2013 will obviously be taking a big drop in 2014 but it won't go down to zero or anything close to it. So if they hit 1 million subs and still generate say 30-40 million in PPV money then they'll lose less than 10 million in year one.
The TV deal was drastically less than they hoped for so there's no real way to shine that turd but 3 million extra a month aint nothing to sneeze at either.
Reading between the lines in this article, it sounds like the $45-52 million in losses the Network is projected to cost the WWE includes and assumes the total cannibalization of the PPV market, which was $80 million last year. In other words, that $45-52M loss assumes that not a single person on planet Earth will buy a WWE PPV from now until forever. Highly unlikely, as Gorilla used to say to Bobby. The article noted that WM XXX did 400,000 buys on PPV despite its availability on the Network. Obviously, WM draws a lot of casual fans that won't be buying Payback, Night of Champions, etc. etc. but that's still a pretty healthy number. It may be that WWE is just way out in front of its fanbase on the technology here, and the "late adapters" (probably a majority of their fan base) will still throw them some money on PPV every 4 weeks. If you add that number on top of Network subscriptions, we're not looking at too big of a bloodbath.
ReplyDeleteAlso, the CFO said that some of the Network expenses were variable rather than fixed, so the WWE may be able to pare those numbers down in the future. Obviously, they spent money on the assumption that 1 million fans would sign up off the bat. If the real number stays around 600K, they can dial down the variable expenses accordingly.
Fool.com?
ReplyDeleteWhat WWE should have done and should continue to try to do is get themselves on a sports cable package and get revenue from the customers who pay for cable along with revenue from commercials and advertisements.
ReplyDeleteThe selling point of having these internet channels like WWE Network or a Netflix was that it was cheaper than cable. Well, now Netflix are saying that they want to increase their prices. Well, so much for being cheaper than cable.
The WWE network should have been on a cable channel. The over the top WWE Network was a foolish and risky idea.
It sounds like WWE really needs cable TV to go away ASAP IF, that's a big IF, they cannot grow their WWE Network. Since they just signed a deal with NBC Universal, that means Raw will still be on free cable TV for 5 years (or whatever the length of the contract is).
ReplyDeleteSo the real question is...will fans pay for WWE Network to watch Raw within 10 years? I'm not sure I would. First, the current product sucks. Second, I am used to not paying for my wrestling, except for PPVs. Third, even if cable went way, I'd rather pay for Hulu, Netflixs, or another type of streaming service to watch things like Game of Thrones, Walking Dead, sports, Animal Planet (even in it's sorry state currently), Discovery, Comedy Central, etc. I'm actually not really willing to pay to watch Raw unless it's like $5-10 a month. I'm pretty sure that the WWE Network will not be $5-10 in a few years.
The way things are going, we're going to lose these massive cable packages, and instead move towards more of a small package/pick 20 channels type model for $30, instead of like 200+ channels for $100 like the current model.
ReplyDeleteThis seems to be the absolute definition of "we need to play it out and see where it goes." WWE is doing something that, as far as I know, hasn't been done (at least to this scale) before. They will definitely have to make adjustments along the way, but that's how it goes with any new venture and they don't have the luxury of seeing what someone else did and avoiding their mistakes. This is part of the problem with being a publicly traded company. Everyone expects that your earnings this quarter will be better than your earnings for the last quarter or the sky is falling.
ReplyDeletewill wwe ever accurately predict its money?
ReplyDeleteanother one crawls out:
Annother Law Firm Investigating WWE for Stock Fraud
Posted by Jeffrey Harris on 05.20.2014
More legal trouble for WWE…
- Ademi & O'Reilly, LLP has put an official press release announcing that they are investigating possible securities fraud claims against WWE. You can read their full press release below:
We are investigating possible securities fraud claims against World Wrestling Entertainment Inc. resulting from inaccurate statements WWE made regarding its business practices, financial statements and prospects.
Our investigation focuses on the extent to which WWE issued false and misleading statements regarding its business practices, financial statements, past and future business performance and prospects. Specifically, WWE's statements that it would double the value of its domestic contracts for its two most popular shows, Monday Night Raw and Friday Night Smackdown, and that the prospects for its recently launched streaming video network were strong were false and misleading.
soon to be acquired by i-pity-the.com
ReplyDelete"WWE is doing something that, as far as I know, hasn't been done"
ReplyDeletepresenting an all around compelling product not focused on john cena?
nor will Netflix or Hulu be anywhere near $10 if they are paying extra for premium internet speeds (see debate on net neutrality) and if they are having to pay for significantly more original content like House of Cards because cable TV isn't producing it or atleast enough. Our internet bills will become our cable bills with cutting the cord. Still have to pay to produce content, still have to either have ads or pay enough to make up for it and stil have to pay for the bandwith (or in the case of cable, airwaves).
ReplyDeleteI'm actually very impressed that WWE has been able to deliver a good working streaming service themselves. They pay a smaller fee to Roku, Netflix, X-Box Live, or whatever.
ReplyDeleteBut the way things are evolving, WWE Network probably needs to be packaged with sports packages, or like Tier 4 entertainment package (with Spike, Outdoors Channel, ESPN 8, etc).
sports channel packages are junk. Unless they get on Fox Sports One or maybe NBCSN then it's a joke. Any other station usually relegated to 2nd tier packages. I know on Dish you have to pay signifcantly more to get the 4 major sports league networks and by doing that they toss in Foxsports2 and a few others. But it's not part of the main package. And of course regional sports network packages are junk. Since MLB, NBA, and NHL games are blacked out except for your local sports channel, there isn't much beyond poker shows and car shows. Affiliating themselves wtih that kind of package and the extremely low penetration they get would have been suicide. And that is where cable companies were willing to put a WWE network. They didn't want to pay for it and they didn't want it as as part of their top packages.
ReplyDeleteOnce again, until I see "Securities and Exchange Commission" on the investigation, these mean JACK and SHIT.
ReplyDeletewrong. ESPN alone gets $15 bucks a month per subscriber from providers. The difference is a lot of channels get almost nothing or nothing and just get to be carried (and make money off of advertising) You go to an ala carte type plan and the smaller channels simply die while ESPN, TBS, MTV, etc. will charge more and more. Fewer channels for little savings.
ReplyDeleteSo in other words you expect people to pay 20 dollars more a month for a bunch of channels they don't want just to get the WWE network, which won't have on-demand programming but instead will basically be the current live feed? Don't think you would get too many takers. Cable companies were willing to put a WWE network on the regional sports channel package, but generally not on the tier 4 type package with Foxsports2, BEin, MayTV, etc. And they weren't wiling to pay a carrying fee, but rather would carry the station and let WWE make their money on advertising. With the low penetration of that kind of sportschannel package, the advertising money wouldnt' even cover the overhead of producing a few original shows.
ReplyDeleteThen WWE should go on and get their own very cable channel. They have enough clout to get their very own channel. Especially now with the help of NBCU, they can get a channel whenever they want.
ReplyDeleteIf Esquire can get their own channel, so can WWE.
Esquire bought an existing channel, which was style TV. That is an option for WWE, but cable networks due evaluate channels each year and cancel some. WWE would still have to negotiate a fee with the providers, which would almost nothing. And I can only speak for Dish but Esquire was bumped from channel 115 down to 191, which I would consider a less prime location, right after they bought the Style Network. I doubt they get any subscriber fees from the providers, and instead live of ad revenues, which explains why most of their programming consists of Parks and Rec reruns (not a bad thing) and endless showings of Rocky movies.
ReplyDeleteIf that stock takes another hit and goes under the $9 range I'm totally buying.
ReplyDeleteSo what you're saying is WWE Network is dead. Oh well.
ReplyDeleteYeah, this means about as much as DiBiase and IRS investigating.
ReplyDeleteThis is weird. We can probably all generally agree that folks under the age of 30 are getting more and more of their video content through sources that are not cable television. Some of those people even cancel their cable entirely.
ReplyDeleteSo I think the thing to keep in mind here is that this is a rare-display of forward thinking on the part of the WWE Network. They may end up taking a theoretical hit now - I mean it's not like the 350 million Vince lost was stuffed into his mattress, and they have their bets hedged for the future. If wrestling falls out of favor or USA Network gets a new President who doesn't like that rastlin' crap, They have a place to go.
Thus is the WWE ever going to make money? Like, turn a profit? Who knows. But it definitely adds value to the company and is a way to get more eyeballs on more WWE-related things and is undoubtedly cool as hell for fans who simply like to watch good matches.
I WILL SAY that business is complicated. Publicly traded business is complicated-er. A publicly traded entertainment company that's pretty much a theatre troupe? There's no way to predict that kind of thing. It's completely unique - there's no other company in my head I can think of like that. Does UFC trade with shares? Cirque? Andrew Lloyd Webber? The Boxing Commission?
Thus I think the WWE knows what they're doing here. Less and less people are going to have cable, and more and more people are going to be moving to boxes that allow them to select whatever content they want delivered to their eyeballs. WWE is already ahead of the game with an actual 'live' stream feature that Hulu and Netflix doesn't have.
So, TL;DR? Whether or not the WWE Network makes money is important, but also beside the point - it's an insurance policy with an added bonus of taking in revenue and generally helping fans (casual fans) mark out.
I'm saying a WWE network on regular cable is dead. The jury is still out on the network on a streaming basis. On a personal basis I'm enjoying it, although I would love to see more older content added. On a financial basis, only time will tell.
ReplyDeleteAmazon was valued far higher than WWE at a time when they were losing far more money than WWE.
ReplyDeletePeople invest for the future. If the WWE has truly found a self-sustainable path to profitability, then losses in the now don't mean much.
That said, it's a high risk/medium reward play, so I wouldn't play it for anything more than a short-term bounce.
I didn't read the article but isn't there a fairly good chance the bump they get from the overseas subscribers will get them near their break even goal?
ReplyDeleteEvery consumer is hoping for this model but i still have my doubts, as Comdukakis says below if they go this route 75% of cable channels will just outright die.
ReplyDeleteYou and i might not care if they do but the cable industry sure does!
I'd say it's a certainty. But that bumps probably not coming until next year.
ReplyDeleteIt will be offset by those that choose not to re-up in the US.
ReplyDeleteAnd when PPV isn't available to even purchase in the U.S. come sometime next year then what?
ReplyDeleteYou assume.
ReplyDeleteSo who does everyone think was an A+ wrestler?
ReplyDeleteThat will be interesting. Some people might choose to tune out of the product, some may not care (probably a large number since WrestleMania and Rumble are the only events that really draw anymore), and some might get the Network for the shows. We'll just have to wait and see!
ReplyDeleteHulk Hogan and Steve Austin.
ReplyDeleteMan you really need to have everything spelled out for you don't you? The point was all of the WWE stock/business talk over the last week has gotten boring and repetitive, just like the A+ conversation did a few months ago.
ReplyDeleteEvery other article is basically saying this is it for the WWE. This one is actually more optimistic.
ReplyDeleteUnderstood. Just expressing my boredom at the topic in general. It has been more beaten to death than Nancy Benoit.
ReplyDelete