Wrestling entertainment company has said over-the-top network could hit 4 million subs in five years
And the wrestling king said viewing on the $10-per-month OTT network now outranks that of every traditional cable TV network: Over the course of 2015, WWE Network subs watched an estimated average of 188 hours of content per household. In addition, the brand generated more than 8 billion YouTube views.
“These metrics demonstrate the unique power of our brands and our potential to capitalize on a multiplatform-content strategy to drive long-term growth,” CFO and chief strategy officer George Barrios said in announcing the results.
Still, WWE Network’s sub count was down sequentially from 1.31 million in the third quarter of 2015. Engagement for the OTT network in Q3 was driven by live event specials including “Beast in the East” and “NXT Takeover: Brooklyn,” the company said.
Moreover, investors have been expecting a faster ramp-up for WWE Network, which launched in February 2014. Barrios has previously said the service could hit as many as 4 million subscribers worldwide within the next five years. WWE shares opened 4.4% higher Thursday before investors pushed the stock down as much as 8% in morning trading, amid a broader market decline.
WWE Network revenue for the fourth quarter of 2015 increased to $37.2 million from $23.3 million in the prior-year quarter.
Overall, the company slightly topped Wall Street expectations for the fourth quarter. WWE reported revenue of $166.2 million (up 18%) and a net loss of $1.2 million, or 2 cents per share, versus a net loss of $1.6 million in the year-earlier quarter. Excluding charges, adjusted net income was $3.4 million versus a net loss of $0.6 million in Q4 2014. The most recent quarter included a $7.1 million write-off for the value of costs related to a media center expansion project that WWE said it has abandoned.
For the first quarter of 2016, the company projects average paid WWE Network subscribers of 1.28 million, which would be up 38% year-over-year. WWE noted that its flagship WrestleMania event will occur on April 3 this year, falling in Q2, whereas last year’s event occurred in the first quarter.
WWE projected Q1 adjusted operating income of $15 million to $19 million, versus $21 million in the year-ago quarter, primarily because of the timing of WrestleMania which grossed approximately $15 million last year.
Internationally, WWE Network had 277,000 subscribers as of the end of 2015. It launched across the Indian subcontinent in November 2015, and last month WWE Network debuted in Germany, Austria, Switzerland and Japan. The company plans to launch in other territories, including China, Thailand and the Philippines.
In Q4, WWE Network premiered more than 85 hours of original content and increased its on-demand library to more than 4,300 hours. Among the content that debuted during the quarter were the original series “Breaking Ground” and two live specials, “Live from Madison Square Garden” and “NXT Takeover: London” from Wembley Arena in the U.K.
The company expects to add more than 300 hours of original content to WWE Network’s featured programming in 2016, including more than 1,000 hours of archival content.