May 4, 2017
Operator
Hello and welcome to the webcast entitled WWE First Quarter Earnings. We have just a few announcements before we begin.
[Operator Instructions] I will now turn the call over to Michael Weitz, SVP, Financial Planning and Investor Relations. Please go ahead, sir.
Michael Weitz
Thank you and good morning everyone. Welcome to WWE's first quarter 2017 earnings conference call.
Leading today's discussion are Vince McMahon, our Chairman and CEO; George Barrios, our Chief Strategy and Financial Officer; and Michelle Wilson, our Chief Revenue & Marketing Officer. We issued our earnings release earlier this morning and have posted the release, our earnings presentation and other supporting materials on our website, corporate.wwe.com/investors.
Today's discussion will include forward-looking statements. These forward-looking statements reflect our current views, are based on various assumptions and are subject to risks and uncertainties disclosed in our SEC filings.
Actual results may differ materially and undue reliance should not be placed on them. Additionally, the matters we will be discussing today may include non-GAAP financial measures.
Reconciliation of non-GAAP to GAAP information is set forth in our earnings release and presentation, which are available on our website. Finally, as a reminder, today's conference call is being recorded and the replay will be available on our website later today.
At this time, it is my privilege to turn the call over to Vince.
Vince McMahon
Good morning, everyone. As you could obviously see, we've delivered pretty strong revenue growth of 10% and that of course is due to our live event and as well as network and television businesses, generally speaking.
And speaking live event attendance, that's always been one of barometers [ph] since day one. And we've increased our attendance by over 100,000 for the quarter as compared to last year which is pretty amazing; 91 events as compared to 72.
Another barometer of course as you know I always use is our content in terms of our social media, as well as digital. Our content had more than 4 billion video views on social and digital combined platforms for the first quarter, up 8% and it continues to be -- as you know for many, many years now we've been trying to be a part of that land grab; I'm happy to say we're still grabbing and holding on to ours and it looks well.
Social media itself; 774 million followers, that's up 23% which is extraordinary and speaks to the power of the brand and the health of the brand ongoing. And many of you know, the WrestleMania results were excellent in terms of all aspects and as far as our Monday Night Raw and SmackDown television show is concerned, they continue to hold their own and do better than that.
And generally speaking, we're -- with the network averaging 1.49 million paid subscribers over the quarter, that's 16% above 2016. And right at WrestleMania, right after a 1.95 million; so we just missed 2 million which we were hoping for.
But nonetheless, the business is very, very healthy and look -- bodes well for the future.
George Barrios
Thanks, Vince. There are several key topics which we'd like to review today.
These include management discussion of our financial performance, the progress of key strategic initiatives and our business outlook. For the first quarter, our adjusted OIBDA of $18.6 million was within the range of our revised guidance as provided on April 3, 2017.
As a reminder, we revised our original guidance to reflect an increase in stock compensation expense that was driven by the rise in our stock prices in the first quarter. Additionally, the revision reflected the timing about the result.
As previously indicated, we anticipate that these timing elements will reverse over the coming months and we're maintain our full year adjusted OIBDA target of $100 million which would be an all-time record. To review our performance in the quarter, let's turn to page 5 of the presentation which shows a revenue, operating income, and adjusted OIBDA contribution by the business as compared to the prior year quarter.
Our reported operating income reflects non-recurring items that impact comparability on a year-over-year basis. These included $5.6 million in expenses, primarily related to certain legal matters and other contractual obligations and $2.1 million in film impairment charges.
As such our discussion will describe our performance on the basis that excludes these items focusing on adjusted OIBDA. As shown in the presentation, revenue increased 10% to just over $188 million with growth driven by the performance of our live events, network and television segments.
The growth in revenue however did not translate into increased profit as the top line growth was offset by the timing of expenses in our corporate and other network segments; and the impact of increased stock compensation expense across all segments. These factors contributed to the quarter to $9.1 million decline in adjusted OIBDA.
On an adjusted basis, corporate and other expenses increased $11.2 million reflecting $2.2 million of the aforementioned increase in stock compensation expense, as little bit with the timing of key strategic initiatives. Importantly, over the remainder of the year, we expect lower corporate and other expenses than in a comparable nine-month period of 2016, obviously excluding the impact of increased incentive compensation due to company overperformance or stock price appreciation.
And show on page 6, network segment OIBDA declined $1.5 million as growth in subscription revenue was offset by the timing of higher expenses within the quarter to produce life in the ring and reality programming; including our UK Championship tournament and the series, Holy Foley. For the full year we continue to expect that the network's programming expenses will be essentially flat to 2016.
During the quarter network revenue increased $6.2 million with growth in subscription revenue to $43.7 million as the network average paid subscribers increased 16% to 1.49 million. We continue to increase the global distribution of WWE Network.
As measured on a year-over-year basis, the network has 1.57 million paid subscribers at quarter end, including 1.16 million paid U.S. subscribers and 409,000 paid international subscribers.
Partially offsetting the decline in profit as just described as the performance of our live event in television segments, OIBDA from the licensing of television content increased $2.5 million reflecting higher right fees in our key distribution agreements. As shown on page 7, OIBDA from our live events increased to $2.2 million based on a 27% increase in revenue of $6.8 million.
The growth was primarily due to our performance in North America where we held 19 additional events, and as Vince mentioned increased our total attendance in North America by over 100,000 from the prior year quarter. All this while achieving a 7% increase in our average effective ticket price to over $51.
In terms of WWE's overall performance; changes in other business segments were largely offsetting and as such didn't have a material impact on consolidated results. Page 9 of the presentation shows selected elements of our capital structure.
As of March 31, 2017 we held approximately $270 million in cash and short-term investments that reflected the proceeds of the company's first convertible note financing. Additionally, we estimate that WWE has approximately $100 million in debt capacity under the company's revolving credit facility.
Importantly, we believe this capital structure enhances our ability to execute our long-term growth strategy. Our free cash flow improved approximately $4 million from the prior year quarter, favorable changes in CapEx and working capital requirements offset lower operating performance.
I'll turn the call over to Michelle to provide some additional perspective on the quarter's performance.
Michelle Wilson
Thanks George. Our first quarter reflected some important operational achievements including the robust consumption of our video content across all platforms to sustain year-over-year growth of WWE Network and the recent record breaking attraction of WrestleMania.
During the quarter WWE content had more than 4 billion video views across our network, digital and social platforms. WWE Network averaged 1.49 million paid subscribers which was in line with our guidance and represented a 16% increase from the first quarter last year.
We produced more than 75 hours of original content for WWE Network; this included the continued production of our new weekly series 205 Live which brings more live in-ring content to our most ardent fans, and the U.K. Championship Tournament in January that featured a rooster of local talent to further engage our global audience.
Over the coming months, we expect it to be [indiscernible] other captivating original programming on WWE Network such as new episodes of WWE 24 that will take viewers on a journey through regain the life of WWE's most intriguing superstars and an all new action-packed women's tournament that will feature 32 athletes from around the world. On television we continued the big season of Total Divas which airs on the E-Network and our flagship television program Raw and SmackDown maintained their dominant positions as the highest rated prime time programs on USA Network.
On social and digital platforms, our YouTube Channel, UpUpDownDown, surpassed one million subscribers reaching gold play button status. And our recently launched channel exceeded 500,000 subscribers; as that as proof of the compelling nature of our content, WrestleMania set the attendance record with the Orlando Citrus Bowl and achieved new heights in terms of viewership and social media activity.
While WWE Network reached 1.95 million total subscribers who watched 22.5 million hours of content during the week of WrestleMania; that's an average of about 13 hours per subscriber. WrestleMania also account for more than 30% of all social TV interactions on Sunday, April 2, surpassing the Country Music Award, The Walking Dead Season Finale, and Major League Baseball's Opening Day.
The power of our brands to engage a broad global audience on multiple platforms has attracted an increasing level of blue-chip sponsors over the past 12 months. We have completed integrated deals with KFC, Cricket Wireless and Nestle; and of course Mars Snickers who are the presenting sponsor of WrestleMania for the second consecutive year.
All of these partners took advantage of our reach across all of our platforms. The development of new video content and it's increasing value to advertisers represent critical strategic initiatives for WWE.
The outcomes that I described represents just a few of the examples of the increasing strength of our brand and our potential to capitalize on these strengths to drive a long-term growth. I'll turn the call back to George to discuss our growth expectations.
George Barrios
Thanks Michelle. Looking at the second quarter, based on the performance of subscribers following WrestleMania, we're raising the low end of our projected range of subscribers for the second quarter.
Specifically, we now project average paid subscribers of at least 1.63 million for the upcoming quarter. We also estimate second quarter 2017 adjusted OIBDA of approximately $13 million to $17 million; this range represents an expected year-over-year increase that can be attributed to three primary factors; continued revenue growth, driven by the growth of WWE Network subscribers, and contractual escalation of television rights fees.
Year-over-year reduction in network programming expenses due to the timing I mentioned before and more favorable year-over-year comparison than other fixed cost; also due to the timing I mentioned before. Now for the full year 2017; achieving this range of second quarter financial performance that I just mentioned would result in adjusted OIBDA for the first half of 2017 that's essentially flat for the first half of last year.
In contrast to this outcome we anticipate significant year-over-year adjusted OIBDA growth over the second half of 2017 from continued revenue growth and more favorable year-over-year comparisons in our fixed cost base. Specifically, this includes continued year-over-year growth in WWE Network subscriber levels, contractual increases and television rights fees, and lower production cost and professional fees.
Based on these factors we continue to target record financial results for 2017 with adjusted OIBDA of $100 million. For the remainder of the year we're going to continue to focus on creating new content across all of our platforms, strengthening our engagement with a broadening audience and continue to support our digital and direct-to-consumer transformation.
As we continue to transform our business, we continue to expect to achieve record revenue, record adjusted OIBDA and record subscribers levels. That concludes this portion of the call and now I'll turn it back to Michael.
Michael Weitz
Please open the lines for questions.
Operator
[Operator Instructions] We'll go first to Brandon Ross with BTIG.
Brandon Ross
Good morning, thanks for taking the questions. First question is for Michelle, since we have you on the call now.
It seems like you took a more data intensive approach in marketing the network this year in customizing offers, especially for WrestleMania. You have a lot of data on your customers compared to; I'd say most other entertainment businesses; can you talk about some of the other opportunities you see to leverage that data in the future?
And -- also I had -- and then I'll follow-up.
Michelle Wilson
Okay, great. So to your point Brandon, we've obviously have a built a strong muscle around data analytics internally and we believe that we are ahead of our counterparts in this regard.
Obviously to your point, leveraging that data to do specific offers on both, on the win-back front which we think is a tremendous opportunity; I think the other side of that and however we are looking at it is the engagement level and the key on how we continue to retain these subscribers overtime. So again, our customized marketing -- as you know, it's the right message to the right consumer at the right time and the analytics are really allowing us to capitalize that, not only on targeted promotional offers for win back and prospects but also keeping those subscribers engaged.
So custom messaging on what other programming to watch, new programming that's coming, what that subscriber is tending to watch. So again really customized marketing is our goal on a one-to-one basis.
Brandon Ross
I noticed that I think by my calculations churn came down at the network over 100 basis points for the second quarter in a row. Do you think your data analytics played a role in that or...
George Barrios
Yes, Brandon, a couple of things. That's an impact of what Michelle mentioned, kind of at the cohort level.
And then as we've mentioned before, in any subscription business once you're bringing in new subscribers, time is your friend because the duration of the subscriber base keeps increasing which drives down the average churn; so you get the improvement at the cohort level but we can't lose fact of the time of the fact that just as the duration of the subscribers increases, that's an incredibly powerful driver of reducing the average churn in any period.
Brandon Ross
Alright, got it. And then in your press release you mentioned extending your reach in China and India.
Could you give us an update on your initiatives in those markets? And do you think bringing the network to China is actually a possibility?
And I'm going to have one more after.
George Barrios
Yes, we've been working real hard on the e-commerce front, so we mentioned about the partnerships in both China and India; and obviously, WrestleMania, which is a core part of the programming on the network was made available in China for the first time on a paid basis, both in English and in Mandarin. And an interesting fact as everybody on the call knows, Vince launched the first pay-per-view in the United States.
WrestleMania was the first sporting event offered on pay-per-view in China; so we've knocked two countries off the list.
Brandon Ross
Great. And then just -- more on the quarter, any more details on the one-timers?
Are there outstanding legal issues now after I guess this one-time charge or does that put it to bed? And you mentioned other contractual obligations as a one-time hit; can you explain a little more about that?
Thanks.
George Barrios
Yes, that's a couple of things. Obviously, you can't predict the future, it's unknowable.
The items in question are subject to confidentiality agreements but we can't say it has nothing to do with any pending legal matters of the company has; other than that we're not going to comment on it.
Brandon Ross
Great, thanks very much.
Operator
Thank you. We'll take our next question from Daniel Moore of CJS Securities.
Unidentified Analyst
Hi, it's actually Lee [ph] for Dan, good morning. So just looking at the TV contract contract, can you remind us of the deal -- the next renewal date for your TV contract as it relates to Raw and SmackDown, and when you might start the process of negotiating or reviewing that contract?
George Barrios
Yes, remember that we mentioned before the domestic deal expires at the end of the third quarter 2019 and our two other largest deals in the U.K. and India expired three months later at the end of '19.
We have not been public on the negotiating timeline thing, we're not going to be.
Unidentified Analyst
Okay. And any update around as it relates to the network around tearing the plans for various people and options?
Michelle Wilson
We can't -- you know, we continue to research that evaluate it on no specific time the we're ready to announce yet.
Unidentified Analyst
And last one for me; as it relates to the free trials, are you seeing stronger and longer conversion rates from those free trials or any other color around that?
Michelle Wilson
Yes, we continue again as we've said on previous calls, the free trail continues to be a terrific way to bring in those who are considering the network; and again, we've seen the conversion rates remain at the same as they had been historically.
Unidentified Analyst
Got it. Thank you very much.
Operator
Thank you. We'll go next to Eric Handler of MKM Partners.
Eric Handler
Thanks very much for the questions, just two questions. First, you've had a number of announcements in the last month with various regions throughout the world; and I'm curious how you are -- how would you prioritize or rank your near-term opportunities to monetize the various regions?
And secondly, it was I guess teased in 205 Live early in the month, last month, that there is going to be a weekly WWE UK Show; any updates on when that might occur and I'm assuming that's going to be on the network?
George Barrios
Yes, on the first one Eric, you know, it's kind of a double-edged sword for WWE is that the brand has just global scale and is so popular in so many reasons that that prioritization is a key part of what we have to do. And we've said it before, India today is our third largest market in terms of revenue, it's one of our largest on a weekly basis, more going to weekly basis on traditional for additional TV and the second largest market on digital, it's got $1.7 trillion GDP [ph], that's growing somewhere between 8% to 10% a year; so we've been public before.
We've got a hell of a headstart in India and we think there is lot of tailwinds there for us; that's an incredible opportunity over the long-term. And similarly, we're really strong in the Middle East, we're really strong in Latin America; and with a great casual businesses in the UK and elsewhere in Western Europe.
So we've got a lot of opportunities and both markets that I just mentioned are one's where we're really strong and focused on.
Michelle Wilson
On your second question regarding that UK weekly show, as we mentioned in the comments that UK Championship Tournament in January was large success, not only locally, obviously aired in local primetime but was viewed by our subscribers around the world. So again, a tremendous success for us.
We are looking at a UK weekly show, most of you may know we're headed to the UK this weekend and obviously continue to follow back and his team continue to look at local talent and the opportunities there to produce content. So nothing yet the announce but absolutely on our development schedule.
And I mentioned also on the comments that one of the other things that Paul and his team are working on in the near-term is the women's tournament. So again, our focus right now is getting that 32-women tournament up and running debuting on the network sometime in third quarter; so that is coming as well.
Eric Handler
Thank you.
Operator
Thank you. We'll take our next question from Jason [ph] with Citi.
Unidentified Analyst
Good morning. So as I've chatted with a number of investors that are maybe less enthusiastic about your story than I am.
It seems like they're all very focused on the number of paid subs at the WWE Network being a lot lower, ultimately than where sell-size estimates are. And what's interesting to be me about that is at least when I go through the numbers it seems like you're sort of gliding towards something in the mid '17 for pain-subs.
So I was just wondered if you could just take a second and sort of just remind us what your long-term subscriber aspirations are? And then what are the sort of mile markers over the next few years that you think could cause that sudden number to change its current trajectory which seems like it's sort of gliding towards something in the 18 range when all is said and done.
Thanks.
George Barrios
Yes, so I'll provide a little bit of context and then get specific to the questions. So context number one, as you know, about two-thirds of the business today is media monetization, the remaining one-third is selling products and tickets.
The two-third monetization in media, that's what Vince, Michelle and I always talk about those three platforms; it's our direct-to-consumer platform, it's the digital and social third-party platform, and its traditional pay TV. And our strategy has always been to be really, really strong in all three and so as the media sector evolves, we'll go where it's best for the WWE brand to go and we'll control our own destiny.
So I think that's an important context. The second piece of important context is we've talked about the network today as the direct-to-consumer video service, Brandon touched on it.
We now have a stronger relationship with our most passionate fans than we've ever had before because of that connection; and we're able to serve them in a way that we never been able to serve them before. Overtime we believe the video service, it will expand to include the entire www.ecosystems; so it won't just be direct-consumer for video content, nobody directed consumer for all of the WWE.
And so that's really, really strategically important. And then when you get to some mile markers, we still think over the long arc of time, we get to the 3 million to 4 million subscribers on the network and as long as we're growing on a year-over-year, we feel good about the progress.
Unidentified Analyst
Okay. Are there any sort of specific things that you think would cause the number to inflect; in other words like changes in the type of spending you're doing or marketing in international markets or changing the type of content internationally?
George Barrios
You know I always see we kind of instructed to look at the history of other subscriber businesses. I think a lot of them have now been around for a lot of time; so kind of see these steady state businesses but if go back in time, what you see is nobody got, his or ultimate subscriber level; I'm talking about music, video, software as a service, you pick the subscribers; they don't just go their ultimately steady states immediately.
It actually takes quite a bit of time to get there. Netflix is a great example right, they said could get over one arc a time, 60 to 90 million serves in US.
Thereabout six years and they're up to low-thirds to low end of that range. So and they keep growing year-over-year, so we've got to take that long view and we're not going to get caught up in this quarter, next quarter, last quarter; as long as we're growing and deepening that relationship, we think the economics are powerful and we think their economic that we haven't envisioned yet it gets -- got back what Michelle was talking about the data.
So we get smarter and smarter and connect more and more; we think there is economics unlocked that we don't even know yet.
Unidentified Analyst
Understood, thank you.
Operator
Thank you. We'll go next to Laura Martin with Needham & Company.
Laura Martin
Hi, can you guys hear me okay?
George Barrios
Speak loudly Laura, it's little tough.
Laura Martin
Okay, great, let me try. So I'm hoping Vince would address this issue.
We're under margin pressure here where revenue is growing faster than we hope but [indiscernible]; and were writing and we think that you guys are doing a good expanding the TAM but a lot of this money is to invest and going international, bringing in women to the wrestling world or going younger with NXT [ph]. And I guess that I'm really interested in hearing from Vince is, you know, Vince, are we just making that up or are you really trying to expand the TAM or you're trying to drive deeper engagement with the clients you already have and more money out of these super fans that you already have?
I'm interested in that from you.
Vince McMahon
We're supposedly grow in every conceivable way whether or not it appears as what's a direct correlation or not. And again, through 70s efforts and Michelle and corporately, there is a huge [ph] on our part to grow our base and you can start growing the base, you continue to grow the base.
As far as women is concerned, again they are the gatekeepers many times to do programming and what have you and likes of whether or not they enjoy the brand. You know, there is an initiative now and it has been for a while; the notion of it is everyone is trying to get to the younger audience; it's one of our secrets of course, it's been generation after generation.
So again we continue to broaden our platforms on an overall basis. And at the same time as Michelle and George were talking about, we capital on the data that we do have and who are current super fans.
So you have to grow and we're looking at all those areas and continue to invest in all of those areas. Whether it's direct, okay, we're going to invest $1 here, it comes right back to us tomorrow; that's not necessarily or point of view, we have a long-term point of view, we try to get as many different areas, as many different demos and what have you -- if we possibly can, whether if we see our initiative, whether or not it's you know consumer interest direct back to back.
So I mean there are many different ways we're doing it but generally it's taking into broader audience.
George Barrios
And Laura, just a fine point on the quarter and the margin expansion specifically; I don't want to lose track of the fact of the timing, the translation wasn't in the first quarter because of the timing, the lack over the next following nine months in total, especially the second half of the year you will see much greater translation we expect. So I don't want to lose that as well.
Laura Martin
Okay, let's stay on cost for a second and margin George; I'm very interested specifically in cost items for the model and are you going to have to sort of expand the performance center? And how much you guys spending on localization of your programming into individual markets?
George Barrios
Yes, so little thing -- a separate point just to keep in mind; if you look at last year, look on the quarter and other line where a lot of the cost you just mentioned actually live, things like our performance center. First quarter last year was up $41 million, this year it's $57 million reported; $52 adjusted.
So you have the lowest corporate other last year in the first quarter in the year and this year we think the first quarter is going to be high; so that timing issue is really driving a lot of that. Then to your specific question, I'm not going to itemize every area but we've -- you know, we talked about a lot, we're going to continue to invest in creating content, specially more local content.
We think the opportunity there is incredibly important. We talked about some of the priority mortgages and we think there is real opportunity to do that.
We're going to keep investing in on the tech and data side. As Vince mentioned, as we get more digital, more direct-to-consumer, that becomes now a core part of our infrastructure.
So we're going to keep investing in those areas; content, regions, data and technology. And we think both the long-term is pretty bright for us.
Laura Martin
Thank you very much.
Operator
Thank you. We'll go next to Curry Baker with Guggenheim Securities.
Curry Baker
Thanks for the question guys, this is related to your TV ratings. In aggregate between Raw and SmackDown, you're outperforming both, the USA network and cable networks in general; both in the first quarter and in the past couple of quarters however all ratings have been up fairly consistently down year-over-year for the past few quarters.
Can you share why you think wall ratings have been down especially, given the strong growth the SmackDown and what are you currently doing? What do you think you still need to do to improve Raw ratings going ,forward especially heading into the 2019 renewal negotiations with NBC.
George Barrios
Yes, great. And again as contacts, we produce between Raw and Smackdown, 250 hours of live content and when you focus, specifically on the U.S.
In the U.S. we're one of the largest [indiscernible] in quantity of live content as also in the quantity of live viewership, right.
We average about 3 million viewers for those 260 hours, so we're almost 800 million hours consumed over 12-month period. We have great talent, there is slip among these great brands; from time to time one may be doing a little bit better than the other but back to Vince's point about the long-term, we don't worry you so much about this month or this quarter; overtime we're driving that level of engagement especially relative to our peers on the platform, we're excited.
But we're excited about the story lines on Raw and reflect about the story lines in SmackDown.
Curry Baker
Thanks.
Operator
[Operator Instructions]. We'll go next to Mike Hickey with The Benchmark Company.
Mike Hickey
Thanks for taking my questions, I appreciate it. Curious on your social media, obviously it's important barometer then she said in terms of the strength of your business.
But I'm also sort of curious, you think at some level it could be cannibalistic to your TV network segments, purely anecdotal but my nine-year old; I mean she's a huge fan of WWE but she primarily watches it all through YouTube and we don't have TV; you know core cutting obviously is a trend that has grown significantly and trying to get her to turn the network seems impossible. So I'm sort of wondering how we should think about sort of kids today that have changed their media consumption patterns and seemingly are finding a wealth of content on social media versus perhaps on the surface like better monetization efforts through the TV and network?
And I have a couple follow-ups. Thank you.
Michelle Wilson
So I'll take that. So as Vince mentioned with the next generation, I think our strategy on social and digital is that absolutely we have to be there, Vince mentioned it the land grab, not only for monetization in the long-term but also bringing in those new consumers.
So you mentioned your nine-year old daughter, we know that's where they are discovering brands and where they become attached to brands. So they are not necessarily turning on the TV for us, that's absolutely imperative to our growth and nine years old she's is watching it on YouTube; at some point she will be engaged in long form content, who knows where that will live in the long-term but we still see that as a strategic imperative to bring them in.
So again we don't worry about the kind of -- if they're cannibalizing or not, we really see it as a rising tide and that you have to be there to grow the brand long-term. So that's our view on it and as George mentioned, we think all parts of the ecosystem were important, the digital and social, bringing the next generation, ultimately moving them to long form on Pay TV and then obviously upto our direct-to-consumer WWE Network.
So in our view it all works in concert.
Mike Hickey
Okay. So Michelle just to clarify, you think there is sort of a bridge between kids today consuming social media as their primary content for WWE or window for WWE.
I think there is a bridge eventually to TV, is that correct?
Michelle Wilson
I wouldn't necessarily say that's the clear path, I think there is crystal ball, we're clear we could tell you the exact path; I think our priority is to bring them into the brand and then present them with a path overtime. That could change, but I'm not saying it's the direct bridge to Pay TV; I think we have to be in both, but certainly as they get older we will look at what platforms they're on and we'll plan to be there.
George Barrios
Adding to that, we talked about this, for the 100 years of media, eventually money follows eyeballs, it takes time, alright. Usually the money is slower than the eyeballs, so to Michelle's point and Vince's point, we fit -- our view is, we dominate on these three platforms; we'll have the choice of where to go with -- where the viewers are.
And so we control our own destiny. It's important to know them, we mentioned this before, five or six years ago, if we created a piece of video content, the only way we could get in front of a fan was to find a partner with a limited shelf of inventory to put it on.
Today we can get a piece of video content to any broad-band enabled home in the world, it is through an ad-supported model or through a subscription model, that's an incredibly liberating place to be.
Michelle Wilson
And just to add from the analytics perspective, I mean we're getting smarter about measuring total video consumption. So again, our metric is not Nielsen rating, that's not the only way we're viewing whether we're succeeding or not in terms of growing overall consumptions.
So when you ask the question about cannibalization, we look at it in totality and the analytics are giving us a much clearer view that year-over-year as long as we're growing total video hours consumed then we're doing the right thing and that's the direction that we're headed. So again, we don't see it as kind of a direct trade out or cannibalization as long as it's all increasing, then we are going in the right direction.
Mike Hickey
Okay, thanks. One more possible.
I mean certainly kids are changing, entertainment is changing, one of the biggest global phenomenon at least I'm directly tied to is the growth of e-sports. I think you're -- I know you're partner that helps develop and publish video games as a JV with the creation of e-sports leak [ph].
And of course you think similar e-sports teams and so forth across more traditional sports programming. But I'm curious if you feel that you have the sports opportunity with your video game?
Michelle Wilson
Yes, so take to the partner that you're refer to, Take Two and 2K who is obviously doing the join arrangement with the NBA. Obviously produces our video game and we've had multiple conversations with them about the passionate gaming fan base that we have and the opportunity in e-sports.
So absolutely we're looking at that, obviously some development work to happen, so nothing -- again, definitive to announcement, trust that we are absolutely looking at that with 2K and Take Two.
Mike Hickey
Good, good, good to hear. Thank you.
Last one from me. I know Stephanie, I think she is primarily the lead, has done a lot to sort of evolve your brand since caught the attitude.
I guess you're making it more compatible to media buyers and I think you've had a lot of success there. I'm just sort of curious how you think about your brand today as you feel like you sort of arrived at that goal in terms of make it family-friendly enough but edgy enough to sort of raise your audience but also get media buyers or if you feel like there is still work to be done in that direction?
Thank you.
Michelle Wilson
I think there again, our -- the comments that I made about the blue-chip partners coming on-board is one of the greatest metrics to determine our success in that area. As to your point, Stephanie has done a tremendous job as our Chief Brand Officer, getting out to the higher level decision-makers and the median and advertising world and sponsors, CMOs around the country and around the world; and we think we've made tremendous progress.
As a reminder, our content has been family-friendly since 2008; what I think our opportunity is and what we've been able to do is get that message out there in a much bigger way, certainly domestically through our partnership with NBC Universal; we've also seen over the last two years that we've added 50 new advertisers and they are quality blue-chip companies that we've added. So we've made tremendous progress on that front, we plan to continue those efforts globally, so -- yes, I think we've made tremendous amount of progress on that front, obviously we're going to continue to get that message out there and make sure that the world knows that we're family-friendly sports entertainment brand.
So again, we won't take our foot off the gas pedal per se but certainly tremendous progress has been made over the last few years.
Mike Hickey
Alright, thanks guys. Best of luck.
Operator
Thank you. We'll take our next question from Eric Katz with Wells Fargo.
Eric Katz
Good morning, everyone. To come back to expenses a bit, I was trying to get our arms around that one as a lot of moving pieces, particularly on timing; I'm not sure how much more you can offer there.
But I guess first, you mentioned network program expenses expected to be flat this year; and I'm hearing a lot about more of local programming, new shows; so I'm wondering how you're keeping that flat and do you see a need for more program expense grow substantial? And then secondly on cost, should we expect corporate expenses to be flat year-over-year?
I know you mentioned some timing on Q1 but anything you can help us model that out and anything maybe on the strategic spends you could add?
George Barrios
Yes. So what we said was on the corporate and other, there will be a favorable for the next – over the nine-month period, we're not going to guide to a specific number but you're not going to see another number starting with five in Q2, Q3, or Q4, we don't expect.
And then on the network programming, it's a matter of timing; so we think we've got the right level of investment and it's just a matter of sometimes, period to period, we will make some changes. But we think it's the right level to keep growing the network.
Michelle Wilson
And the point I'll add to that is the type of content that we're doing again to brand this point, the analytics that we have are tremendous -- so we have full visibility on what our subscribers are viewing, and so we make those programming decisions accordingly. What we're finding is that obviously localization, more in-ring content is what they are looking for and we are able to produce that incredibly efficiently and if you look at some of the other programming that we've done that is done well, reality series and those others genres tend to be a little more -- you know, requite a little more investment.
So I think over what we're focusing on now, we're able to reduce that more efficiently and that helps support that flat year-over-year.
Eric Katz
Okay. And as far as the local content, so is the local content very clearly performing better than some of the scripted stuff or just more program shows that you would do?
And then secondly just sort of collateral that we noticed when you're Indian wrestlers on the roster is getting a big push, I'm wondering if you're see any changes in viewership in India since that push? And is that really something strategic or am I reading too much into that topic?
George Barrios
Well, I think as you could imagine, WWE superstars are WWE superstars in every country in the world; so John Cena is popular in India and the Middle East and Latin America and the U.S. However, we're all human beings and there's a certain level of ethno-centricism and when a local character is really popular, it kind of pushes up in that country maybe a little bit more but we love the story line and drive kind of who is hot or not, both the one specific geography but it certainly doesn't hurt in India.
Eric Katz
Okay, thank you.
Operator
Thank you. With no further questions, I'd like to turn the conference back over for any additional or closing remarks.
George Barrios
Just wanted to say thank you to everyone. We appreciate you listening to the call and certainly if you have any questions, don't hesitate to reach out to us, Michael Weitz, or Michael Blido [ph] at 203-353-8600.
Thank you.
Operator
Thank you for your participation. That does conclude today's conference.
You may now disconnect.