WWE Q2 2016 – WWE Network Churn – Inside the Numbers on latest churn & what it indicates

By James Caldwell, PWTorch assistant editor

The Churn. It’s the key to WWE’s Network business after reaching the break-even point last year.

WWE reported the latest churn figures in their Second Quarter 2016 financial report, which included WrestleMania 32 business.

In the second quarter, WWE reported an addition of 625,000 paid subscribers. They also lost 471,000 subscribers. The net result was 153,000 subscribers gained in the quarter.

In the previous WrestleMania quarter – Q1-2015 – WWE’s net gain was 511,000 subscribers. This was based on 795,000 new paid subscribers and 284,000 lost subscribers.

Three big factors to consider are that WWE was in the ramp-up phase of the Network in Q1-2015, WWE appears to have reached a “maturity level” in domestic subscriptions in 2016, and the effect of a free trial period.

– Looking at the Mania quarters, WWE attracted 180,000 fewer paid subscribers in Q2-2016 compared to Q1-2015. This was likely due to many free trial subscribers not becoming paid subscribers. There is also the factor of domestic subs flattening out, while international continues to grow quarter after quarter, but it only represents 25 percent of the total.

One other item is what WWE considers a gross addition. WWE said they include new subscribers and “win-backs,” who are subscribers who previously churned out and subsequently renewed their subscription.

Counting win-backs along with new paid subscribers and the increased international distribution meant more opportunity to add to the total number of paid subscribers, but the WM32 quarter was still down 180,000 from the WM31 quarter.

It reinforces the notion that Q1-2015 was the peak of WWE’s ramp-up phase, maturity was reached at the end of 2015/beginning of 2016, and there was not as much room to increase subs in the 2016 Mania quarter because the Network is nearing a domestic “glass ceiling.”

– Right now, WWE’s focus is on retaining paid subscribers after WrestleMania. Last year, WWE took it on the chin after WM31, churning out 171,000 subscribers (12.9 percent) in Q2-2015.

This year, WWE reported 1.454 million subscriptions on April 4 – the day after WrestleMania. By the end of the quarter on June 30, the total was up to 1.511 million subscriptions.

WWE net-gained 57,000 subscribers from WM32 to the end of the quarter. This appears to be the result of converting a percentage of the big pool of free trial subscribers (370,000) into paid subscribers to offset people who ended their sub after WM32.

– Going forward, WWE is predicting a small net loss in Q3-2016, roughly 2 percent, to land around 1.5 million total paid as part of the expected churn.

The long-term key going forward will be international subscribers, especially clearing China to reach a large population of newer WWE fans.

Domestic Paid Trendline

• Q3-2014: 703,000 subscriptions (96% total)
• Q4-2014: 772,000 subs (95%)

• Jan. 27: 871,720 subs (post-Royal Rumble) (87%)
• Mar. 30: 1.123 million paid subs (pre-WM31) (85%)
• Q1-2015: 1.131 million paid subs (post-WM31) (85%)
• Q2-2015: 939,000 subs (81%)
• Q3-2015: 990,000 subs (80%)
• Q4-2015: 940,000 subs (77%)

• Q1-2016: 1.027 million (pre-WM32) (76%)
• April 4: 1.109 million (day after WM32) (76%)
• Q2-2016: 1.130 million paid subs (75%)

International Paid Trendline

• Q3-2014: 28,000 subscriptions (4%)
• Q4-2014: 44,000 subs (5%)

• Jan. 27: 129,750 subs (post-Royal Rumble) (13%)
• Mar. 30: 192,000 paid subs (pre-WM31) (15%)
• Q1-2015: 196,000 (post-WM31) (15%)
• Q2-2015: 217,000 subs (19%)
• Q3-2015: 243,000 subs (20%)
• Q4-2015: 277,000 subs (23%)

• Q1-2016: 330,000 subs (pre-WM32) (24%)
• April 4: 345,000 (day after WM32) (24%)
• Q2-2016: 381,000 subs (25%)

WWE Network - Domestic vs. International

WWE Network - The Churn