Barrios talked about the features of the Network which we mentioned last week. He stated that the Network will also monitor usage and make suggestions based off of usage. He said that the time is right to go via the internet due to the fact that so many people, especially young folks, watch TV via the internet. WWE sees that continuing in the future. They also have taken into account the effect that online distributors (Netflix, MLB TV, Hulu, etc.) have had on TV watching.
The Network will have 24/7 programming, plus the massive library of On Demand content. He reiterated that the price is very consumer friendly. He noted that Netflix has passed Comcast in penetration. That says a lot. He cited that 62 million homes either have a current or lapsed WWE fan. That is the base they are targeting. He said the people they are going after are the folks that watch a lot of TV via the internet so learning how the Network works for them will be an easy process.
He then walked us through the Network, 24/7 programming plus the On Demand. He said we would be able to see every WWE, WCW an ECW PPV, as well as every Raw and Smackdown on demand. He said that original programming will be anchored by the PPVs. He mentioned new shows like The Monday Night War and WrestleMania Rewind. He believes that the PPVs will and original shows are great draws for subscribers. They believe it offers tremendous value, especially for PPV buyers. Amen George. He said there is also tremendous upside for non PPV buyers, which is true.
He then talked about the distribution strategy. We can subscribe at 9 a.m. on 2/24 at WWE.com. There will also be a free one week trial. It will also be available on the app (for most devices if not all). Other devices will follow. He said that they brought in MLB to deliver the content since they do a great job elsewhere.
He moved on to the financial impact of the Network. According to projections, they have the potential to generate 50 to 150 million dollars after expense. They feel they can ultimately attract two to three million subscribers on a steady basis. They expect to launch outside of the US at the end of 2014 or early 2015. They expect to get 750,000 to 1,500,000 subscribers when they do that roll out. They expect that to generate 25 to 85 million after expenses.
Barrios noted that will have more information on their projections for the year at the first quarter call, as he expects the TV deals to be done by then. He expected to double or triple OBITDA.
George then turned it over to callers.
