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Post by Slammy Award-Winning Cannibal on Oct 30, 2014 10:38:34 GMT -5
So that means they're making $7.2m per month plus whatever the limited sponsors are paying with a much higher profit margin than when they were exclusively on PPV. I fail to see how that is "terrible". Because the internet knows more than WWE. Use your head, moron.
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Boo!
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Post by Boo! on Oct 30, 2014 10:40:07 GMT -5
I was really psyched for the tape library, but now I'm bored of that, so it's basically just buying PPVs for 10 bucks a month. Great price, but still the Network has lost it's luster already. It's why they need Network 'special events', like a random Wednesday night house show taping, an episodic 'big deal' TV programme maybe on Saturday nights etc. If you think about the number of live events they do, maybe to perk up interest in the Network they need to bring a camera along to a few of them. Not have the same production levels/crew as they do for TV but in the style of the old MSG televised house shows. I agree the archive, as much as there is of it, is soon exhausted from a subscribers stand point. They really need to produce a 'new' wrestling show every non Raw/SD/PPV night of the week. Even if it's just random matches with occasional backstage promos, interview segments and tour promotions.
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Deleted
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Post by Deleted on Oct 30, 2014 10:41:46 GMT -5
I wondered when they'd drop the subscription part of it.
I was surprised they came out of the gatewith 9.99.
Figured they would have done something $25/month (considering you get all 12 ppvs) and then some kind of bulk yearly rate where you get it for $120 a year if you actually subscribe.
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Boo!
Dennis Stamp
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Post by Boo! on Oct 30, 2014 10:46:38 GMT -5
They're competing with things like Hulu/Netflix so their prices have to compete if not undercut those. Unlike Netflix, WWE is something that chances are is just for one person in the house - the son maybe. Everyone likes movies so you can justify Netflix from the household budget as that's a family thing, a shared investment. If you've only got one person in the house who likes WWE then it's hardy to justify.
Think of the 4m who tune in every week vs the 150,000 - 220,000 domestic PPV buys they were getting. $9.99 for each PPV sounds great but the vast majority of people only paid for the occasional PPV anyway, maybe as and when circumstance and finances allowed.
In order for it to take off they of course need the product to catch fire but also at a price point that's insignificant change to low/middle income families. Is $9.99 really that? I think long-term if might have to go down a few dollars to maybe $6.99 to get bulk interest.
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Post by ben:friendship frog on Oct 30, 2014 10:49:42 GMT -5
So that means they're making $7.2m per month plus whatever the limited sponsors are paying with a much higher profit margin than when they were exclusively on PPV. I fail to see how that is "terrible". It's terrible b/c they need 1.4 million to break even, not to make money, just to break even. So judging by that, they're losing money. There's no way they're going to pick up another 700K subscribers. This is their fanbase. So you're telling me it costs just under $14m a month to run? That's ridiculous. They'll make even and make money by the plenty, it might take two years instead of one but it'll happen. From what I remember reading all 'industry experts' were thrilled with the progress. The only doom and gloom places i've seen are the dirtsheets and those who take everything from them as gospel.
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Post by bluemeii on Oct 30, 2014 10:52:59 GMT -5
So that means they're making $7.2m per month plus whatever the limited sponsors are paying with a much higher profit margin than when they were exclusively on PPV. I fail to see how that is "terrible". It's terrible b/c they need 1.4 million to break even, not to make money, just to break even. So judging by that, they're losing money. There's no way they're going to pick up another 700K subscribers. This is their fanbase. Completely oudated numbers. With the budget changes and cutbacks, it has been reported many times that 1 million worldwide is a break even number. Of course they are losing money on this to start. Almost every financial person that discussed this launch predicted this, they also predicted that if it survives, which it appears it will, it would be the start of revolutionizing the TV industry as we know it. Like people obsessed with ratings numbers and not looking at the demographics and viewership, looking at the raw subscriber numbers and just predicting total financial failure for this venture is completely pointless.
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BrianZane
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Post by BrianZane on Oct 30, 2014 11:02:40 GMT -5
Holy crap, they're GIVING AWAY SURVIVOR SERIES.
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Abdullah
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Post by Abdullah on Oct 30, 2014 11:04:00 GMT -5
So that means they're making $7.2m per month plus whatever the limited sponsors are paying with a much higher profit margin than when they were exclusively on PPV. I fail to see how that is "terrible". It's terrible b/c they need 1.4 million to break even, not to make money, just to break even. So judging by that, they're losing money. There's no way they're going to pick up another 700K subscribers. This is their fanbase. Every time this gets pointed out, I get a little sad because it would seem to indicate more job cuts yet.
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Boo!
Dennis Stamp
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Post by Boo! on Oct 30, 2014 11:05:03 GMT -5
It's terrible b/c they need 1.4 million to break even, not to make money, just to break even. So judging by that, they're losing money. There's no way they're going to pick up another 700K subscribers. This is their fanbase. So you're telling me it costs just under $14m a month to run? That's ridiculous. No but it isn't as simple as that. It does cost money to run and administer and also it's set off against money they would have been getting were they solely on PPV. The 'break even' costs are based on how much they need to compensate for loss of PPV revenues. Anything below 'break even costs' means WWE is losing money compared with solely selling on PPV.
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Post by bluemeii on Oct 30, 2014 11:09:49 GMT -5
They're competing with things like Hulu/Netflix so their prices have to compete if not undercut those. Unlike Netflix, WWE is something that chances are is just for one person in the house - the son maybe. Everyone likes movies so you can justify Netflix from the household budget as that's a family thing, a shared investment. If you've only got one person in the house who likes WWE then it's hardy to justify. Think of the 4m who tune in every week vs the 150,000 - 220,000 domestic PPV buys they were getting. $9.99 for each PPV sounds great but the vast majority of people only paid for the occasional PPV anyway, maybe as and when circumstance and finances allowed. In order for it to take off they of course need the product to catch fire but also at a price point that's insignificant change to low/middle income families. Is $9.99 really that? I think long-term if might have to go down a few dollars to maybe $6.99 to get bulk interest. Agree with the top half of this. In terms of a price drop though, past 9.99 I just don't think that's feasible. From what I've read, the back end infrastructure is being handled by another company and they are paying a flat fee for the hosting and distribution service. It's kinda why they can come up with a pretty accurate "break even" number. That number will also go down in time as I imagine initial costs are spread out over the course of the fiscal year and not one lump sum. To the point of price drops though I just don't agree with that, it appears it's something they can't do. Just to use round numbers for easy math, if the breakeven is 1 million subs and it's 10 bucks a sub that's 10 million a month in revenue generated. That number covers all of the overhead for the network operation. If you were to drop that sub rate 1 dollar, you now have to generate an additional 111,111 subscribers just to get to that 10 million dollar number. That doesn't even cover the costs if there is any type of bandwidth tiering going on with MLBMA when it comes to the increase in viewers. I imagine there would be something going on and that would drive the overhead number higher. That's just not going to happen. I think they've accepted that this is the low end price now it's up to WWE to deliver more compelling content to get people to subscribe.
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Abdullah
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Post by Abdullah on Oct 30, 2014 11:16:04 GMT -5
Holy crap, they're GIVING AWAY SURVIVOR SERIES. Going by WWE's way of promoting things, that either has to mean it will be either... The best SS in years or one of the worst.
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Boo!
Dennis Stamp
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Post by Boo! on Oct 30, 2014 11:17:43 GMT -5
They're competing with things like Hulu/Netflix so their prices have to compete if not undercut those. Unlike Netflix, WWE is something that chances are is just for one person in the house - the son maybe. Everyone likes movies so you can justify Netflix from the household budget as that's a family thing, a shared investment. If you've only got one person in the house who likes WWE then it's hardy to justify. Think of the 4m who tune in every week vs the 150,000 - 220,000 domestic PPV buys they were getting. $9.99 for each PPV sounds great but the vast majority of people only paid for the occasional PPV anyway, maybe as and when circumstance and finances allowed. In order for it to take off they of course need the product to catch fire but also at a price point that's insignificant change to low/middle income families. Is $9.99 really that? I think long-term if might have to go down a few dollars to maybe $6.99 to get bulk interest. Agree with the top half of this. In terms of a price drop though, past 9.99 I just don't think that's feasible. From what I've read, the back end infrastructure is being handled by another company and they are paying a flat fee for the hosting and distribution service. It's kinda why they can come up with a pretty accurate "break even" number. That number will also go down in time as I imagine initial costs are spread out over the course of the fiscal year and not one lump sum. To the point of price drops though I just don't agree with that, it appears it's something they can't do. Just to use round numbers for easy math, if the breakeven is 1 million subs and it's 10 bucks a sub that's 10 million a month in revenue generated. That number covers all of the overhead for the network operation. If you were to drop that sub rate 1 dollar, you now have to generate an additional 111,111 subscribers just to get to that 10 million dollar number. That doesn't even cover the costs if there is any type of bandwidth tiering going on with MLBMA when it comes to the increase in viewers. I imagine there would be something going on and that would drive the overhead number higher. That's just not going to happen. I think they've accepted that this is the low end price now it's up to WWE to deliver more compelling content to get people to subscribe. I just think of things like Netflix at $8.99 a month. Compared to what they were doing before getting $50 PPVs for $9.99 outside of any other context sounds great but vs the current market places I'm not sure it's that competitive. They've left the 'old world' now and I think long-term they have to begin to start pitching themselves against these type of services and however great a $40 saving a month sounds in theory, being more expensive than Netflix I still think is a problem for them in terms of non-traditional/occasional PPV buyers weighing up the option to subscribe. Moreover I think the shift in the last 7 years or so of making the television shows the focal point of the product hasnt helped either.
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Post by bluemeii on Oct 30, 2014 11:34:56 GMT -5
Agree with the top half of this. In terms of a price drop though, past 9.99 I just don't think that's feasible. From what I've read, the back end infrastructure is being handled by another company and they are paying a flat fee for the hosting and distribution service. It's kinda why they can come up with a pretty accurate "break even" number. That number will also go down in time as I imagine initial costs are spread out over the course of the fiscal year and not one lump sum. To the point of price drops though I just don't agree with that, it appears it's something they can't do. Just to use round numbers for easy math, if the breakeven is 1 million subs and it's 10 bucks a sub that's 10 million a month in revenue generated. That number covers all of the overhead for the network operation. If you were to drop that sub rate 1 dollar, you now have to generate an additional 111,111 subscribers just to get to that 10 million dollar number. That doesn't even cover the costs if there is any type of bandwidth tiering going on with MLBMA when it comes to the increase in viewers. I imagine there would be something going on and that would drive the overhead number higher. That's just not going to happen. I think they've accepted that this is the low end price now it's up to WWE to deliver more compelling content to get people to subscribe. I just think of things like Netflix at $8.99 a month. Compared to what they were doing before getting $50 PPVs for $9.99 outside of any other context sounds great but vs the current market places I'm not sure it's that competitive. They've left the 'old world' now and I think long-term they have to begin to start pitching themselves against these type of services and however great a $40 saving a month sounds in theory, being more expensive than Netflix I still think is a problem for them in terms of non-traditional/occasional PPV buyers weighing up the option to subscribe. Moreover I think the shift in the last 7 years or so of making the television shows the focal point of the product hasnt helped either. Think what they're aiming at is that $50 to $9.99 crowd. They don't have the programming to bring the non fan in. It's a limited market they are trying to convert into paying for the service. Netflix, Hulu Plus and the like are appealing to the entire entertainment market. My best guess is that's why they are able to keep costs where they are, the whole quantity over quality comparison. I understand your point about competitive pricing, I just don't think WWE is in a position to do anything more in terms of dropping price. Honestly I think the best thing they could have done was keep the 9.99/14.99 model in place until initial costs were funded as this would drop their monthly cost for the network and open up the chance for profit by mirroring the no commitment plans of other providers. Just feel like they are skipping a step here. One last thing just hit me like a brick. Next quarter numbers even if they don't pick up one sub will be drastically better. Forgot about the ad revenue (thank you posters at top of page 2). This revenue is probably what spurred them into the $9.99 all in one no commitment plan. That revenue didn't exist in this report and I'll be interested in seeing the P&L for the next quarter to see how much that brought in.
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saintpat
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Post by saintpat on Oct 30, 2014 11:35:40 GMT -5
I'm taking the free November ... and I'll keep paying on a monthly basis.
They got me.
For $9.99.
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Andy Martin
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Post by Andy Martin on Oct 30, 2014 11:49:58 GMT -5
And yet Canada is still f***ed for most of this. Yup. If I could get it without using erm, alternate means. I would. f*** Rogers.
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Post by Mayonnaise on Oct 30, 2014 13:22:10 GMT -5
If there is no more six month commitment, I wonder if the Network will even carry WrestleMania (at least live). Not a chance in hell. The live PPVs are the only real draw they have. Plus they lost 2 major carriers over this which would make taking Mania or PPV off the Network even more of a losing move. I think the end of the commitment signals they're looking at a price increase and don't want to worry about dealing with all the different subscription ends when ever they decide to go with it.
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Boo!
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Post by Boo! on Oct 30, 2014 13:25:31 GMT -5
The international rollout seemed surprisingly low-key. Obviously I don't live in Australia or Gambia or wherever else it happens to be but it seemed to have been done with very little fanfare, just a 'oh by the way' announcement and everything seems geared towards promotion towards the US audience (with constant mentions of the US price structure on TV). Given how keen I'd have assumed they were to push it as hard as they can maybe 28,000 from 170 different countries can explained by the lack of promotion of anything else other than the US version.
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Boo!
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Post by Boo! on Oct 30, 2014 13:27:29 GMT -5
If there is no more six month commitment, I wonder if the Network will even carry WrestleMania (at least live). Not a chance in hell. The live PPVs are the only real draw they have. Plus they lost 2 major carriers over this which would make taking Mania or PPV off the Network even more of a losing move. I think the end of the commitment signals they're looking at a price increase and don't want to worry about dealing with all the different subscription ends when ever they decide to go with it. They're waaaaaay off even contemplating a price rise. That's guaranteed not to happen for a long way off yet. They're struggling to get it going at 9.99 as it is. I'd say that'll be the base for at least another 12 months with special offers and gimmicks made along the way to entice people in.
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Post by bluemeii on Oct 30, 2014 13:32:53 GMT -5
Agreed on the price hike. That's a long way off. Feel like the ad revenue has helped out the bottom line, but they are in zero position to contemplate raising, or as I said earlier, lowering the price. Think it's in about as good a spot as they can get it for now.
The PPV's honestly are their #1 selling point so they will always be there for the foreseeable future. They just need to work on programming to entice the people in. Screwing with the pricing right now would just blow up in their faces.
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Post by Mayonnaise on Oct 30, 2014 13:35:40 GMT -5
Not a chance in hell. The live PPVs are the only real draw they have. Plus they lost 2 major carriers over this which would make taking Mania or PPV off the Network even more of a losing move. I think the end of the commitment signals they're looking at a price increase and don't want to worry about dealing with all the different subscription ends when ever they decide to go with it. They're waaaaaay off even contemplating a price rise. That's guaranteed not to happen for a long way off yet. They're struggling to get it going at 9.99 as it is. I'd say that'll be the base for at least another 12 months with special offers and gimmicks made along the way to entice people in. I'm not saying it is going to happen in the next few months, but I do think they are going to see how dropping the commitment does in terms of bringing people in. Should it not go well, I have no doubt they already have a target in mind ($12.99) and time as well (Summerslam 2015). They cannot keep up the pace they are at and expect Wall Street to stay happy.
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