The WWE Network subscription numbers have been updated for the second time this year, and so far it hasn’t been good news for the WWE. Vince McMahon may be forced to make even more cuts based upon the slower than expected signup rate, so what could this mean for WWE profits into the future?
In a related report by The Inquisitr, with the advent of the WWE Network, it was rumored McMahon was ripping off wrestler’s pay with their PPV bonuses. Now the company is saying the overhead cost of the WWE Network is forcing layoffs and the WWE Network price is expected to go up in September.
This is the official statement on the WWE Network subscription numbers:
“WWE Network has attracted an extra 161,000 subscribers since WrestleMania on April 6th and ended the quarter at 700,000 subscribers, reflecting a net addition of 33,000 subscribers.”
To put things in perspective, when the WWE Network launched it had around 250,000 people sign up immediately and was adding about 25,000 subscribers per day right before WrestleMania 30, which is typically their biggest WWE PPV every year. Right after WM 30 ended, the company revealed the network had 667,287 subscribers and was on track to hit its target of a million subscribers by the end of 2014. Although WWE was able to get nearly 670,000 subscribers in only six weeks, this was actually bad news since they’d initially hoped to reach the one million mark with just WrestleMania 30 alone.
The company reported a net loss of $8 million in the first quarter of 2014 due to the higher operating costs of the WWE Network streaming services in addition to lower results from its video game licensing business. Since the second quarter did not include the additional income of WrestleMania, it’s not surprising to hear the losses increased to $14.5 million. At the same time, the company had already been cutting costs before the recent bout of layoffs. There’s also the fact the WWE deal with NBC increased one of their biggest sources of income from $90 to $150 million, which is a very respectable 70 percent raise.
The reason the one million mark keeps coming up in relation to the WWE Network subscription numbers is because it’s projected the company needs somewhere around one to 1.3 million committed fans in order to break even. The goal for 2015 is to reach 1.5 million subscribers, although if they ever manage to reach two million, the company should be transformed based upon the math.
Unfortunately, the math is not favoring Vince McMahon’s plans at all based upon the WWE Network subscription numbers they just released. The figures of 700,000 total and a net addition of 33,00 is just a nice rounded off number since that’s actually 32,713, but who is complaining about accuracy? The major issue is that they’ve had 116 days and yet, once you include the people who cancelled their subscriptions, the number of WWE Network subscribers has only increased about 282 per day.
This is pretty bad considering financial reports in May were expecting the 750,000 mark to be reached by Extreme Rules and estimates concluded the lowest average daily signup rate to be somewhere closer to 1,000 per day, not one-fourth that amount. With 152 days left on the calendar, if the WWE Network maintains the same rate that means they would add only around 43,000 more subscribers.
The good is that is probably the low estimate. The only major WWE PPV events left in 2014 is SummerSlam 2014 and Survivor Series, so we might expect the subscription numbers to pick up again this month. The cancel-at-any-time membership expected for September also sounds like a marketing gimmick that will go away by time Royal Rumble 2015 and WrestleMania 31 come close. There’s also talk of going global with 170 countries, but it’s hard to say just how many international viewers will be enticed into signing up.
Do you think Vince McMahon will continue the WWE layoffs if the WWE Network subscription numbers don’t reach one million by 2015?