Want to know how to build a fortune of $750 million? Well, if you’re Vince McMahon, you start with $1.5 billion and then make a bad decision!
Presto – $750 million fortune.
Here’s the deal from one my favorite websites, CelebrityNetWorth.com …
Why the WWE Stock Has Crashed – and Cost Vince a Fortune
Back in February 2014, the WWE launched a streaming subscription service called The WWE Network. The channel, which had been in the works since 2011, costs $9.99 a month. Subscribers get tons of WWE content on demand, and more importantly, they DON’T have to pay $49.99 for the big monthly Pay Per View events.
With the network, the WWE is betting that they can earn more off the $9.99 subscription fees than the monthly $49.99 PPV fees. Presumably more people can afford to pay a consistent $10 a month for lots of content AND the events, as opposed to periodically paying $50 for a one time event.
On Friday, company executives announced that in order to break even on these PPV losses, the network needs 1.3 million subscribers. Some analysts put that break -even number closer to 1.5 million.
Unfortunately, after being live for a little under five months, only 670,000 people have signed up.
Friday’s crash comes just months after investors were swooning over WWE.
In the preceding 12 months, shares of WWE had risen 230% thanks largely to high expectations with regard to the WWE Network. Shares hit an all time high of $31.39 on March 20, one month after the Network debuted. Vince’s net worth had increased more than $800 million in under six months and now he’s LOST it all.
This proves just how HARD it is for anyone – even established brands – to sell recurring revenue products, even when they have past customers, and even when the Recurring option is a BETTER deal.
It shows that people HATE being locked into recurring payments.
Use this info wisely!
Personally, I’m rooting for Vince to make a comeback.
Should be interesting to see what happens next,
“I’m not afraid of failing. I don’t like to fail. I hate to fail. But I’m not afraid of it.” – Vince McMahon