WWE's online video gamble, WWE Network, has crossed its first big subscriber benchmark, passing 1 million subscribers this week.
The number is a crucial goal for the company's bottom line: WWE Network needs at least a million subs to make the service profitable, and it was hoping to meet that number before the end of its first year.
"Break even for us on a global basis … is about 1.3 or 1.4 million subscribers," George Barrios, chief strategy and content officer for WWE, said at an investor conference last May. "Our pay-per-view used to generate on average about $40 million. … With that 1.3 or 1.4 million we think we can generate about that same $40 million of OIBDA."
After an initial, heady rush of signups--WWE Network touted more than 700,000 subscribers within six weeks of its launch, and came within sight of its goal by September at 971,000—the service struggled to keep those numbers on an upward track as its first year progressed. Once their initial six-month contract expired, 255,000 subs dropped the SVOD service. WWE saw just 31,000 new customers in the third quarter.
The company shifted its pricing strategy to attract more subscribers, dropping the six-month commitment and adding a $12.99 "cancel any time" plan in August. It then started a Netflix-style, first-month-free promotion for new subs in November, and dropped its monthly price to $9.99.
Its recent launch into Canada on Jan. 20 likely helped boost WWE Network's subscriber rolls as well. The online service is available only on desktop and laptop computers there, but should it become available on more devices, look for signups to rise.
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