"In 2011, we evaluated several paths for creating new programs and distributing all of our content in a way that optimizes its value. Executing this strategy effectively, including the potential creation of a WWE Network, has the power to transform our business," said WWE CEO Vince McMahon. "While we made significant progress toward this objective, our fourth quarter and full year results were impacted primarily by three items: significant non-cash film impairment charges stemming from the weak performance of our movie releases, strategic decisions to withhold several hours of previously licensed television content for distribution on other platforms, and initial start-up operating expenses associated with our emerging content and distribution strategy. Regarding the first item, we have taken several measures to improve the profitability of our movie business. And, regarding the other items, we believe that our ongoing investment to expand and maximize the value of our content is the most potent approach for driving our future earnings."
Here are some highlights:
* Live Event revenues were $26.9 million as compared to $26.6 million in the prior year quarter. Revenues increased 1% as an increase in overall average ticket prices was offset by the occurrence of 6 fewer events in the quarter.
* Pay-Per-View revenues were $14.6 million as compared to $13.8 million in the prior year quarter, reflecting a 2% increase in total pay-per-view buys. Buys for the four comparable events in the current and prior year quarter declined 3%, but were more than offset by an increase in prior period buys, which resulted in a 6% increase in pay-per-view revenue.
* Television Rights Fees revenues were $33.9 million as compared to $35.7 million in the prior year quarter. This decrease was primarily due to the absence of domestic rights fees for our WWE Superstars program.
* Venue Merchandise revenues were $3.9 million as compared to $3.7 million in the prior year quarter, as the impact of a 7% increase in domestic per capita merchandise sales to $9.81, was partially offset by a 5% decrease in total domestic attendance in the current year quarter.
* Home Entertainment net revenues were $6.5 million as compared to $5.8 million in the prior year quarter, representing a 12% increase that was primarily due to an adjustment in the prior year quarter. Gross domestic retail revenue declined 14%, or $1.8 million, due to an 8% decrease in shipments to 825,000 units and a 5% decline in average effective prices to $13.50. The prior year quarter included an adjustment for lower sell-through expectations of prior year releases.
* Licensing revenues were $9.5 million as compared to $12.3 million in the prior year quarter as lower sales of toy, collectible and novelty products more than offset an increase in video game sales. Revenues related to toys declined 15%, or $1.0 million, reflecting, in part, a challenging retail environment for certain toy categories. Revenues from our collectible products declined due to a tough comparison to a successful product launch in the prior year. Revenue from video games, increased by approximately $0.4 million, led by sales of the WWE All Stars video game, which launched in March 2011. Unit shipments of our SmackDown vs. Raw video game decreased 51% to 162,000 units as compared to the prior year quarter.
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