As noted earlier, WWE Strategy and Financial Officer George Barrios discussed the upcoming WWE Network at Tuesday’s UBS Global Media and Communications Conference. Barrios discussed the possibility of the Network being available over the Internet rather than through cable carriers, which appears to be the direction they’re going.
“One of the things that happened over the last 12 months has been happening for quite a while and we have been monitoring it for quite a while, is the consumption of long form video over-the-top [Internet] and we all have Netflix to thank for this,” said Barrios, transcribed by Seeking Alpha. “They have done the spade work of creating the environment and the consumption habit of consumers to watch long form video over-the-top. So this, earlier this year we said where two years ago we didn’t think there was enough of that happening to make a network viable over-the-top, we now believe it is viable over-the-top.”
Dave Meltzer noted on Wrestling Observer Radio last weekend that the Network would need 1 million subscribers to break even, as opposed to 2 million if they were to distribute it through cable carriers. He also said that the company will still likely offer WrestleMania 30 to subscribers of the Network, however customers would have to sign up for at least six months. The Network launch date is still expected to be February 24, 2014, the night after the Elimination Chamber pay-per-view, and the announcement is expected to happen on January 8 in Las Vegas, the week of the 2014 International CES consumer and electronics trade show.
Barrios said that the plan was still to have “ala-carte” pay-per-views [non-WrestleMania shows with the exception of WrestleMania 30] available on the network, and that while it would cannibalize their pay-per-view business, they would break even with the aforementioned 1 million subscribers with a price tag between $10 – $15 / month.
“The network for us is taking those ala-carte pay-per-views, bundling them together, using our live range, our production capacity to program around those pay-per-views 24×7 linear as well as a large VOD component,” Barrios said. “Home entertainment library, previous pay-per-views, everything our fan is always clamoring about, all in one place. So that most valuable content that today costs $600 or $700 at retail, more linear content and VOD packages at somewhere between $10 and $15, we’ve done a lot of research.
“If we get to about a million subscriber even with the cannibalization of that pay-per-view business we break even. 2 million to 4 million subscribers, incremental $50 million to $150 million of OIBDA. We’ve been working at this for a while. We’ve been working with the MVPDs, the same pitch I just gave you here, let’s transform the pay-per-view business together, grow the business for both of us. Quite frankly it’s been a bit of a slog, having those discussions but we continue to have them.”