The WWE had a conference call yesterday with Vince McMahon and the company released their latest WWE Network numbers. According to ABC News on Thursday, the video streaming service has now hit 700,000 subscribers, which is still lower than many in the company hoped it would be. In the wake of the lower than expected numbers, the WWE laid off seven percent of their staff.
The panic is a direct result of Wall Street overreacting to the numbers. The WWE originally said that they need over one million subscribers to break even with the WWE Network. The problem is that the WWE Network will cannibalize their pay-per-view revenue, which was a major source of income. With the WWE Network costs $9.95 a month and all pay-per-views are included, whereas the original format saw fans paying up to $70 for a single pay-per-view event.
The WWE lost $14.5 million in the second quarter of the year. Even more telling was that Vince McMahon himself lost close to $500 million when the WWE stock dropped heavily after the original WWE Network subscriber numbers were released. The original numbers were 667,000 subscribers, so only 33,000 more people subscribed to the WWE Network in the last three months. This is not the WWE news that stock holders wanted to hear.
However, this is all overblown. Many fans might be waiting to see how the WWE Network is accepted before making the jump to subscribing. While there are only about 300,000 people who purchased many WWE pay-per-events in the past, the fact is there are five million households who watch the WWE on television each week. There is also the flawed sentiment that current product is all the subscribers are interested in, when the WWE Network has every pay-per-view from WWE, WCW and ECW plus original shows, classic wrestling television and more.
While the WWE Network will never reach the 40-plus million subscribers that Netflix gets, that streaming service had very similar numbers to the WWE Network when it started out. It took a while for it to catch on, but when it did, it was a huge success. It is not unreal to believe that the WWE Network will hit one million subscribers within the next year and continue to grow, especially since they are starting the international rollout on Aug. 12. 1.5 million WWE Network subscribers would earn a $100 million profit for the WWE.