WWE Network Subscription Price & WWE Ending PPV Events ?

wwe-network

WWE CFO George Barrios spoke to 4-Traders.com today and revealed some new details on the . Notably, the subscription will run $12.99-14.99 per month, the break-even point for WWE is around 1 million subscribers and the company will eventually phase out pay-per-view events entirely. Here’s the full transcript of what Barrios said about:

Where WWE’s Future Growth Will Come From:

“Well, over the last few years our core business has been performing well. We generate $75 million to $95 million of EBITDA. Those EBITDA margins have been 16% to 19% so the core business performed well. We have invested a lot in the last couple of years to take advantage some of that growth that we see. And the big strategic thesis for us is the value of content. There is more and more distribution alternatives available. Netflix is one everyone talks about. YouTube not being part of just social video but now real original content. So there’s more and more distribution alternatives and it’s on a global basis. As a content creator and owner, which makes us unique, we own 100% of the rights of our content. We license them out, we’ll license windows but we own it all. And that’s a unique position to be in. We think the rising distribution opportunity is driving up the valley of content. In fact, you look at what HBO does to produce Game of Thrones, right? You’re talking $10 million to $20 million an episode for 13 hours, right. So now you’re in the $150 million to $200 million. That’s incredible value. Raw and SmackDown are two franchised programs, average more viewers than any cable network average of prime time. So USA is a number one cable network in the US. It averages about 3 million viewers a week in prime time. Raw and SmackDown, our two top programs, averages more than that. We create a lot of value with the content. That’s going to be a big driver for growth.”

How WWE Will Monetize The Network & The Break-Even Point:

“Sure. So on the first part, continuing on with our core products, we’re going to keep them fully distributed. We think that’s a great platform for a network. And we think there’s a lot of value as those shows come up for renewal. Our four biggest contracts will be renewed over the next three years. We think that’s a great opportunity for us because of the value we deliver. Then to the network, we said we’re going to take our pay-per-views. We’re one of the preeminent pay-per-view providers today and our pay-per-views are priced anywhere between $49.95 and $59.95 today and we’re going to make that the core of a value proposition with a lot of other new content and put it on a premium network so that our fans can subscribe. We said the price will be somewhere between $12.99 or $14.99, to be determined as we go to market but we think that’s a real great opportunity. And to your question about breakeven, about a million subscribers because the pay-per-view buyers will migrate over to the network. That’s our belief. About a million subscribers, we breakeven at 2 million, it’s a really good business; at 3 million to 4 million, for us it’s transformative.”

Will WWE’s Pay-Per-View Business Eventually Go Away?

“We believe over time. We believe the value proposition will be much more powerful to subscribe to a network at $12.99 to $14.99, 24/7, you have the pay-per-views, a lot of great content, our library, a lot of retrospective programming that we’re doing that’s testing really, really well, we’re producing it right now so over time, I think the pay-per-view does go away.”

  • 3Tears

    If ppvs go on the Network I might consider getting it, also depends what kind of shows are on.

  • Puppet H

    One thing: Fail

  • http://www.facebook.com/profile.php?id=16734450 Brandon Sco??

    So essentially for the price of 3 PPV, you get them all as well as all the other content. But, they must also carry WM on this network… otherwise there is no benefit PPV wise.

  • I Believe

    Until it is launched and produces good results with positive feedback, I’ll hold my tongue on it as a whole. But I will that say the idea of having the PPVs dissolve sounds good as long as added charges aren’t secretly stuffed into the subscription. To be honest, I won’t be subscribing due to budget constraints as is. My friend will likely do so, which would give me the chance to check it out, but I can’t help but think that this idea can still fold. “We said the price will be somewhere between $12.99 or $14.99, to be
    determined as we go to market but we think that’s a real great
    opportunity.” From his own words, the idea of pricing is not even determined as of yet, so there’s also that to look out for. For now, I will wait and see what happens.

  • http://www.facebook.com/stephen.wadelin Stephen Wadelin

    People are saying the PPV business is dead and that’s why they plan on phasing it out, well the UFC can pull big numbers and do when they put the right promotion on.

    And that’s the WWE’s biggest issue, this ‘Mania will do well based on star power, it would do a lot better if they promoted it more, and built to it. And that’s why their PPV numbers don’t compare to old minus ‘Mania because they don’t hype and build. And over exposure to the product in general.

  • http://www.facebook.com/profile.php?id=732542390 Donte Shoshona Gopual

    It sounds awesome when he says it but ill have to wait and listen to feedback before jumping on. If most PPVs are free on the network then it will stop me from going on streams.

  • Ares

    Honestly, I would get this LOL. We will see how it works out first though, then the WWE can take my money.

  • Mike C

    if i have to pay to watch Raw and Smackdown WWE is gonna go slowly go outta bizness. why dont they just focus on making an entertaining 3hrs.

    i dvr it and just fast forward to see punk, rock or lesnar. all the cartoony bullshit between is stupid. WWE is getting big headed if u ask me.

    i dont like the idea of paying 15 bucks a month for WWE that isnt even that good anymore.

    how r u suppose to gain new viewers? i was a kid who flipped around on saturday in 95′ and found wwf, how r kids suppose to discover if they like it and then i couldnt see wwf ppvs for 20bucks, now ur gonna make a 9yr old ask their parents to add to their monthly for some wwe?

  • Mike C

    ppvs are dead! especially with UFC giving real fights no one wants to pay for scripted shit anymore. how many viewers do ppvs get? if raw is getting 3 million or so, wat does a ppv get? 70,000? lol. we all get the results online anyways. ppvs are just wrestling. no promos or segments. raw is more entertaining as a show than a PPV nowadays

  • http://www.facebook.com/people/Rick-Yuhnke/100002079499044 Rick Yuhnke

    1 million subscribers? Not a chance. They have had WWE 24/7 and it is cheaper, has a lot of programs, and has little to no followers/subscribers. I think this is not the best decision on he part of the WWE. They need to keep the ppv model, it makes a lot of money and people get to pick and choose.

  • http://www.facebook.com/profile.php?id=100001177411091 Seth Bob

    I will 100% subscribe, especially if it’s anything like the programming on WWE Classics ondemand.

  • wwefan

    when wwe gets its own network, i smell TV-14

    • Dickcheese

      One can only hope and dream for this. I guess they’ll still do cheap plugs during shows for additional revenue, but with a steady flow of income provided this service does well, WWE can tell kiddie advertisers to go $^#! themselves as they will not have to depend on advertisement revenue as much.

  • askbillmitchell

    Time to find a new CFO. If this gentlemen honestly thinks that the pay per view model is going to be phased out, he needs his head examined. You are can’t have two contradictions, on one hand you are saying the price point is going to be $12.99 – $14.99 on the other hand, you are saying that at least four pay per views are worth a premium. Anyone actually bother to look at the price point for Wrestlemania lately? To do away with the pay per view model, you have to turn your back on approximately 1 million buys at $50.00 a pop. What’s 1 million x $12.99 and $14.99. For a Chief Financial Officer, this individual seems to be fiscally illiterate.

    • http://www.facebook.com/steve.demain Steve Demain

      I think his strategy is that a cheaper per month price point for much more content will drive people to stop streaming expensive programming and actually purchase their shows. I’m not sure how the numbers would work out, but it seems like sound reasoning to me.

      • askbillmitchell

        People are going to stream regardless. That’s a battle they need to forget about fighting, there is no way to win. IF and that’s a big IF they can get 1 mil + to sign up (assuming that the service is offered by the big name cable providers and is NOT bundled in with some worthless package) it might stay a float, it will take them longer to break even but it’s doable, less than 1 mil and they might as just chalk up as another XFL like venture.

    • Joe Schmo

      Napkin math but here goes:

      The questions are: How many people subscribe to pay per view now? How many in a year?

      1 million x 12.99-14.99/month x 12 months = 155.88 – 179.88 million / year. Plus still charge extra for Wrestlemania which I believe has been reported earlier will not be included in the subscription. So if you have 2-3 million subscribers you are doing just fine.

      • askbillmitchell

        I was attempting to take the article at face value. Either WWE is changing the way they plan to implement the network OR this guys simply misspoke. From the article it sounded like WWE’s long term strategy was to move all the pay per view shows on to the new network. I concur that if WWE leaves the core PPV’s (the 4 that essentially drive the stock) on a PPV model, they will do just fine but I cringe when I read moving PPV’s to network and charge $12.99 – $14.99 and yes, if you account for all the pay per views – the b shows which normally don’t attract a broader audience more revenue will be generated on those which is good but revenue is lost if you are talking about the core four.

    • http://twitter.com/theEricRichmond theERICrichmond

      I think fiscally this idea could work. Especially if you look at, as he states in the video, the costs as it relates to other premium networks and their weekly shows. WWE probably pays less than and I am sure does not get over 50% of the advertising revenue. So coupled with them gaining the majority of the subscriber revenue and the costs of productions I believe this could work.

    • WWETNAFAN

      Well you have to understand, WWE has been in the PPV business for many years now. I think they can clearly see that the ppv model is definitely a thing of the past. Namely because of 1 thing called “The Internet”. WWE now knows that most of the PPV content is being streamed online for FREE! Which gives viewers the option of rather or not they want to spend money on events. Entertainment companies such as WWE and TNA, know they have lost control over the PPV method. They are not generating as much money as the “Attitude era” days of wrestling. So they are forced to change strategy, and move towards subscription content. And I have to admit, I’m glad the internet has brought so much power to consumers :))

  • http://twitter.com/ToricoUK Jamie Hawker

    Be lucky to get 10k subs.

  • Mr_DJ

    Having a PPV every month isn’t good for business anyways…

  • dae

    Question is…
    Will ‘Mania be part of the package if/when the PPVs move to the Network, or will that still cost us $70 because they want the money?

    • Joe Schmo

      I think it will be separate but at a reduced price for subscribers to the premium channel.

  • http://www.facebook.com/dromanoski David Romanoski

    So when are WWE going have it come on @ how Wrestling fans can get it

  • http://twitter.com/theEricRichmond theERICrichmond

    I definitely think this is a revolution idea for professional wrestling and entertainment like sports (UFC, Boxing, etc.)! I think as a business model, this will work very well but it will be interesting to see how the network will change relationship with third party content providers such as Netflix, Hulu and YouTube.