Shares in World Wrestling Entertainment fell the most in more than 10 months on Monday after reporting online subscriber totals that disappointed investors.
The WWE Network had an average of 918,000 paying customers in the first quarter, the company said in a statement Monday. Some 1.3 million were signed up to the $10-a-month service as of Sunday night's WrestleMania 31, the network's equivalent of the Super Bowl, held this year in Santa Clara, Calif.
But because the streaming network provides access not only to WWE archives and regular TV programming but also pay-per-view specials, observers are watching to see whether it makes up for cannibalizing WWE's traditional revenue.
"It was lower than some people wanted to see," Bradley Safalow, an analyst with PAA Research, said in a phone interview. "1.3 million subscribers is not a bad number, but it's not a number that keeps the stock climbing higher."
WWE, based in Stamford, Connecticut, fell 14.7% to $14.09 at the close in New York. The shares are down 49% in the past year.
Media companies large and small are experimenting with ways to charge their customers for direct access to programs, following the success of Netflix in video streaming. WWE, based in Stamford, Connecticut, became one of the first to do so in February 2014. The WWE Network provides access to live events as well as archived content.
WWE said about 77% of the 201,000 people who signed up for a free trial for its network last month stayed on as paying customers.
"We believe that exceeding 1.3 million subscribers reflects the successful execution of our strategy and puts us on the path to transformative growth," Chairman and CEO Vince McMahon said in the statement.
~ Bloomberg News ~