For some reason investors are seeing good news here, when the reality appears to be a very weak quarter with more on the way. The company added just 33,000 new subscribers to its WWE Network during the second quarter and now claims that it has 700,000 subscribers, well short of the 1 million it has said it needs to break even.
WWE kicked out a week’s free trial promotion at the beginning of July and is now preparing to roll-out the network programming to virtually any country that is connected to the Internet beginning next month. That would be fine except there’s little indication that the rest of the world is clamoring for pro wrestling.
There could be more pain in store for WWE as it cannibalizes its pay-per-view business in favor of its video-on-demand and network business. Pay-per-view buys were down by nearly 500,000 in the second-quarter and the average paid per event was down 6% to $22.51. A subscription to the WWE Network costs $9.99 a month and a subscriber has been required to pay for a six-month subscription to offset the lower cost relative to the pay-per-view cost.
The company is facing the same problem that a single media company like The New York Times Co. (NYSE: NYT) faces: how do you adjust to a revenue model that is slowing decimating traditional sales? WWE hopes that the bargain pricing will spread to a much larger audience, but so far, at least, the evidence has not supported this hope.
Shares are up on the staff cuts and lower-than-expected loss, trading at $12.46, up about 3%, in a 52-week range of $9.62 to $31.98.
ALSO READ: GoPro Earnings Will be Key, and Do Not Forget Ambarella
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.