It's WWE financial reporting day!
We'll have more analysis throughout the day, but based on the press release version of 2015's third quarter financials released this morning (October 29, 2015), the overall picture looks solid - in large part based on the company's ability to retain the customers who subscribed to WWE Network during WrestleMania season.
For the period from July 1 - September 30 of this year, the streaming service had approximately 1,173,000 paid subscribers, with 1,233,000 at the end of the quarter. The reports tout this as 62% increase over the third quarter of 2015, but doesn't draw attention to the fact that second quarter average was 1,216,000.
And that's not a bad thing. In addition to holding on to customers, WWE is reporting that more of those are paying customers (a 7% increase over the Q2) and that, overall, revenue is up. They reported net income of $10.4 million based on increased television rights and live event revenue (driven by higher ticket prices) in addition to the Network proceeds. As our own Keith Harris said on Twitter, that's "out of this world compared to last year", when the streaming service was still finding its feet and the company reported a net loss of $5.9 million in Q3.
The story of WWE will be about Vince McMahon's taking his company away from pay-per-view (PPV) and toward the over-the-top model for the foreseeable future. And while today's financials don't let them hearld a new sexy milestone like one million subscribers, their operating income is at levels comparable to when they were focused on selling individual televised events on-demand.
Less than two years after the Network's launch, that's pretty impressive.
Here's what McMahon and Chief Strategy & Financial Officer George Barrios had to say in the press release:
"During the quarter, we made significant progress on the growth of our global subscription service, WWE Network," said WWE Chairman & CEO Vince McMahon. "We also continued to strengthen our talent base, achieved significant international growth and increased engagement across our digital and social media platforms. Over the next year, we expect to leverage our brand and content initiatives to further enhance engagement, promote network subscription, and maximize our long-term earnings growth."
George Barrios, Chief Strategy & Financial Officer, added "Our solid earnings growth for the quarter was driven primarily by the increase in WWE Network subscribers, the escalation of our television rights fees, as well as higher effective ticket prices at our live events. Key metrics, such as the record attendance at our SummerSlam events, viewership of our original content, and social media presence demonstrate the increasing strength of our WWE brands, which are the foundation of our long-term growth."