- WWE Studios recognized revenue of $1.8 million as compared to revenue of $1.9 million in the prior year quarter reflecting the timing of results generated by the Company's overall portfolio of movies. Here is the breakdown…
Five films have been released during the first nine months of 2013, which compares to three releases during the first nine months of 2012. Revenues for current projects will be recognized on a net basis as participation statements are received from distribution partners rather than upon release as was the case with the Company's self-distributed movies. In general, for movies that are not self-distributed, the Company does not expect to begin recognizing revenue until four to six months after release. As such, the recognition of revenue related to the most recent releases, including 12 Rounds 2: Reloaded and The Call is not expected to begin until the fourth quarter 2013 or early 2014.
Based on an evaluation of the Company's film assets, an impairment charge of $7.0 million was recognized in the quarter. The impairment charge, which primarily relates to the movies released over the 2010 through 2012 period, was driven recent performance of these titles. As a result of the impairment, WWE Studios generated a loss of $7.4 million compared to a loss of $2.0 million in the prior year quarter, which included no film impairment charges. Excluding the impact of film impairment charges, the WWE Studios' movie portfolio generated an adjusted loss of $0.4 million compared to a loss of $2.0 million in the prior year quarter.
- WWE saw revenues from Digital Media businesses increase 15% to $8.6 million as compared to $7.5 million in the prior year quarter.
WWE.com revenues increased 19% to $5.7 million in the quarter due to higher sales of advertising and digital content, including the Company's pay-per-view events, across various digital platforms. Supporting the growth in advertising, key digital metrics such as unique visitors to the Company's website and mobile app, average monthly page views, and CPMs (a measure of pricing) increased from the prior year quarter. The Company launched digital distribution of its pay-per-view events on the Microsoft Xbox Live on the Xbox 360 in April 2013 and on the Sony Entertainment Network on PlayStation 3 in August 2013.
WWEShop revenues increased to $2.9 million in the quarter as compared to $2.7 million in the prior year quarter based on an 11% increase in the volume of online merchandise sales to approximately 59,800 orders. The average revenue per order increased 2% to $48.87 in the current year quarter.
- WWE saw revenue from their Consumer Products fall 15% to $13.4 million from $15.8 million in the prior year quarter, primarily due to declines in the Company's video game licensing and Home Entertainment businesses as described below.
Licensing revenues were $5.7 million as compared to $7.1 million in the prior year quarter, driven primarily by a 24% reduction in video game shipments that resulted in a $1.3 million decline in video game royalties. Shipments of the Company's annual franchise video game, WWE '13, which was the last release developed by THQ, declined to 178,000 units as compared to 233,000 units for the corresponding game in the prior year quarter. Royalties from the sale of toy and apparel products were essentially flat to the prior year quarter, as modest growth in the U.S. was offset by lower sales in international markets. Additionally, a new installment of the Company's video game, WWE 2K14, was released by Take-Two Interactive in late October 2013.
Home Entertainment net revenues were $5.2 million as compared to $6.4 million in the prior year quarter. Domestic home entertainment revenue fell approximately $0.8 million, or 15%, reflecting a 23% decline in shipments to approximately 720,000 units with 5 fewer releases in the quarter (7 in Q3 2013 vs. 12 in Q3 2012). The decline in shipments was partially offset by a 4% increase in the average price per unit to $11.41.
Revenue from international licensing activities declined by approximately $0.4 million reflecting lower sales in Canada and the transition to a new licensee in the EMEA region.
Magazine Publishing net revenues were $1.5 million as compared to $1.6 million in the prior year quarter.
- WWE saw revenues from Live and Televised Entertainment businesses increase 13% to $89.5 million, primarily due to the expansion of rights fees from the production and licensing of new television programming, contractual increases from existing programs and changes in the mix of live events. Here is the breakdown…
Live and Televised EntertainmentHere is the breakdown of WWE's PPV business for the third quarter…
Live Event revenues increased 10% to $25.0 million primarily due to changes in the mix of events, with a higher proportion of international events, which are typically characterized by higher average attendance and ticket prices than events in North America.
There were 76 total events in the quarter, including 62 events in North America and 14 events in international markets, as compared to 77 events in the prior year quarter, including 70 events in North America and 7 events in international markets.
North American events generated revenues of $17.5 million as compared to $17.0 million in the prior year quarter representing an increase of $0.5 million as a 9% rise in average ticket prices to $46.78 and 6% higher average attendance to 5,500 attendees were partially offset by the scheduling of eight fewer events in the quarter.
International live events generated revenues of $7.5 million as compared to $5.8 million in the prior year quarter, with the scheduling of 7 additional events in the quarter.
Partially offsetting the impact of holding more events, average international ticket prices decreased 26% to $72.30 and average attendance decreased 20% to approximately 6,700 from 8,400 in the prior year quarter. The decreases in average ticket price and average attendance were due in part to changes in territory mix as the incremental events in the period were concentrated in South Africa, a region that has shown a high proportion of WWE fans, but that has experienced significant economic challenges. In addition, changes in foreign exchange rates contributed to the reduction in average ticket price.
Venue Merchandise revenues decreased 11% to $4.0 million from $4.5 million in the prior year quarter primarily due to a 9% reduction in total domestic (U.S.) attendance, reflecting fewer events during the quarter and an 11% decline in per capita merchandise sales at those events to $9.53 in the current year quarter.
Television revenues increased 30% to $44.1 million from $34.0 million in the prior year quarter primarily due to the production and monetization of new programs, including Total Divas and WWE Main Event, and to a somewhat lesser degree, contractual increases for existing programs both domestically and internationally. Total Divas, a new original series, began airing on the E! Network in July, 2013 while WWE Main Event was licensed to and began airing on ION Television in the fourth quarter 2012.
Pay-Per-View revenues were $14.6 million as compared to $16.3 million in the prior year quarter, down 10%, primarily due to the performance of the Company's SummerSlam event, which contributed to a 9% reduction in buys for the comparable quarter events.
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