WWE Stock Takes a Cheap Shot After Spike in TV Subscriptions

Yes, you read the headline right. WWE’s stock plunged last week following record numbers of viewers tuning into WrestleMania 31, the highest grossing live

Yes, you read the headline right. WWE’s stock plunged last week following record numbers of viewers tuning into WrestleMania 31, the highest grossing live event in WWE’s history. Why the drop? According to Investors.com, despite the spike in viewing and a 77% conversion rate from free viewers to subscribers in February, the year-old WWE Network says the spike may be temporary, which caused stock prices to plummet 15%.

Since last year’s WrestleMania, WWE has had a 97% jump in subscriptions, growing to more than 1.3 million, but WWE says the spike could be seasonal, relying on popular events to meet its revenue goals. The long-term success of the company is now relying on subscriptions rather than pay-per-view revenue it previously received for its monthly events.

Past events earned around $50 each, but now those events are included as part of subscriber’s $9.99 monthly fee. While last year Business Insider reported WWE would need 1.3 to 1.4 million subscribers to replace that revenue, WWE says the current subscription total may not remain consistent. To retain subscribers, the network will have to provide consistent and unique programming. Along those lines, WWE announced Monday that it is adding eight new series to its networking, including a talk show hosted by Jerry Springer.

Insider Take:

We think the WWE Network is onto something here. As one of the early adopters of the over-the-top TV subscription format, they knew there would be some growing pains. In spite of the expected ramp up period, the WWE Network reached its initial subscriber goal within 13 months. In addition, its free promotion for the month of February brought in 210,000 new customers with 77% converting into paying subscribers. Those are outstanding results.

Add the new programming to the mix, and we expect the WWE Network to continue growing its subscriber base, easily exceeding its initial goal. If stockholders can wait for the main event, we expect they’ll be pleased with the results. If not, they’ll miss WWE Network’s inevitable comeback.

Filed in Business Strategy, Entertainment and Streaming, News

Dana E. Neuts

Dana Neuts is Subscription Insider's Editorial Director, covering our daily subscription news as well as member features, case studies, premium content, and reports. Dana is also a writer, editor, marketer and communications professional. Her work has appeared in AARP Bulletin, The Seattle Times, Seattle Business, 425 Business, 425 Magazine, South Sound Magazine, Northwest Travel and more. Her specialties include business writing, community news, senior issues, travel and, of course, subscriptions!