Exclusive Analysis: WWE Reveals Network Subscriber Numbers

WWE Network subscribers are down slightly from the previous quarter. The company released its Q3 earnings report today, revealing the subscription video service averaged 1,458,000 paid subscribers through the quarter, which ended on September 30. That’s marginally down from 1,511,000 at the end of Q2, which included WWE’s biggest event, WrestleMania.

The 1,444,000 subscriber number is just below the company’s earlier projection of within 2% of 1,490,000.

WWE promoted its "Free WrestleMania" campaign leading up to the event on April 3. For the first time in the history of the Network, the company allowed new subscribers to watch WrestleMania while on a free trial subscription, in hopes customers would like the service enough to become paid subscribers. The company has proven to be able to give reliable predictions for its subscriber counts, likely using a wide range of internal analytics, but perhaps overestimated, however slightly, how many free subscriptions would convert into paid.

Still, the company and the Network remain healthy. WWE Chief Financial Officer George Barrios emphasized in a press release that investors should consider year-over-year Network subscriber growth more than quarter-to-quarter changes.

“[W]e define success [of the WWE Network] by the achievement of sustained year-over-year increases in this measure,” Barrios said.

This guidance seems reasonable when considering WWE Network subscribers are driven most prominently by the pay-per-view events, with subscriber activity likely to peak around WrestleMania each year. In another era, WrestleMania could earn three to four times as many pay-per-view buys as most other PPV events in a given year.

WWE projects average paid subscribers for Q4 will slightly decline again to within 2% of 1,400,000 to end the year.

The quarter’s OIBDA (a profit-like metric) was $24.5 million on revenues of $164.2 million. Both of those figures are essentially flat from Q3 2015. Through nine months of 2016, the company is on track to exceed both OIBDA and revenue from the entire year of 2015. WWE projects $20 to $24 million in OIBDA for Q4, which would give it a total of at least $80 million for 2016, exceeding 2015’s $61.6 million.

Stay tuned here at Fightful.com for more coverage and analysis of the WWE Q3 2016 earnings release and conference call. You can follow Brandon on Twitter at @adecorativedrop.

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