WWE hits 1M subs as it moves to month-by-month plan in Q4

By Jim O'Neill on Jan 28 2015 at 11:45 AM
WWE hits 1M subs as it moves to month-by-month plan in Q4

Last January, WWE announced it was switching distribution from pay-per view to an over-the-top service, but has been wrestling unsuccessfully to reach the 1 million subscribers it believed it needed to make a profit.

No more.

Yesterday, the entertainment company said it added more than 269,000 new subscribers -- an increase of 37% -- in the fourth quarter, after a dismal 31,000 adds in Q3, just 3,000 of them in the United States.

That influx of new fans online since it deployed in February turned the stock from a dud to a stud in trading Tuesday, as it shot up nearly 20% (it’s come down about 6% today).

So, what happened?

The company attributes the subscriber gain to a free trial it’s been offering to its $9.99 a month network, strong growth in the United Kingdom and the addition of the Royal Rumble – its big U.K. event – to the online lineup. In October, WWE said the trial would give customers a chance to “explore thousands of hours of video-on-demand content.

“Our research combined with best practices in digital subscription businesses affirms our belief that a simple, single price plan will help us continue to grow WWE Network’s subscriber base,” Michelle Wilson, WWE’s chief revenue & marketing officer said at the time.

But, a more likely driver of the subscriber surge is the WWE’s decision to spur online subscriptions by dropping its requirement that subscribers commit to six-month deals.

Instead, WWE began offering a no-commitment, cancel-anytime deal for the $9.99 subscription, making it available on a month-to-month plan, a la Netflix and Hulu Plus.

That model has generally been regarded as a more attractive one for Millennials wary of being tied to annual subscriptions they might lose interest in, and, it's a case in point that shows publishers may need to evolve their model to be successful. In WWE's case, it had content it believed was well regarded.

WWE said its data has consistently shown viewers have been happy with the product, saying that, on average, close to 90% of subscribers access WWE Network at least once per week, 99% access WWE Network at least once per month and 86% of subscribers were “satisfied” with WWE Network.

The problem apparently wasn't in what was being streamed, but the business model WWE chose to launch with. 

Three months ago, WWE Chief Strategy Officer George Barrios told the New York Post that “we love the over-the-top model. It’s a great business model for us.”

Will the love continue?

Last quarter, WWE beat on earnings, but missed revenue forecasts, reporting a net loss of $5.9 million, or 8 cents per share, compared to net income of $2.4 million, or 3 cents per share a year ago.

It’s expected to release Q4 earnings Feb. 12 before the market opens.

Follow me on Twitter @JimONeillMedia and on LinkedIn

READ THESE NEXT

For SVOD, churn much less of a threat than for pay TV
SVOD, Pay TV
For SVOD, churn much less of a threat than for pay TV
Feb 06 2017 8:15 AM

OTT video viewers may be just about as fickle as traditional TV viewers, with roughly 19% churning some of their SVOD services during the past 12 months, which is down from 20% a year ago, according to a new report.

SVOD, OTT
Here’s how to avoid failing with a niche SVOD service
Jan 31 2017 1:45 PM
Ooyala’s new white paper “Why SVOD Services Fail: 5 Common Mistakes and How to Avoid Them” comes from Ooyala’s Strategic Media Consulting team. It examines the current state of SVOD services and common mistakes providers have made. Harnessing insights the team has gathered through its many global SVOD engagements, the white paper discusses what makes a service sink or swim and provides guidance on how niche SVOD providers can succeed in this highly contested space. 
 
HOOQ gets $25M more in funding as fight for APAC SVOD heats up
APAC, SVOD
HOOQ gets $25M more in funding as fight for APAC SVOD heats up
Jan 12 2017 10:30 AM

HOOQ, the other Southeast Asia subscription video on-demand (SVOD) platform that wants to go toe-to-toe with Netflix (Malaysia’s iFlix also hopes it can punch above it weight), has gotten a $25 million cash infusion from its main investors – SingTel, Warner Bros. and Sony Pictures.

Netflix original Korean content plays to markets in SE Asia, Korea & China - eventually
APAC, Netflix, SVOD
Netflix original Korean content plays to markets in SE Asia, Korea & China - eventually
Jan 11 2017 11:45 AM

Netflix has joined the long list of over-the-top services that are looking to use South Korean dramas as a lure to draw new viewers in Asia, while at the same time making its own service more competitive to local services in South Korea.

The company today announced it had contracted for a 12-episode original series based on a South Korean online comedy series. The series will debut in 2018.