World Wrestling's Management Presents at J.P. Morgan's 41st Annual Global Technology, Media and Telecom Conference (Transcript)

World Wrestling Entertainment Inc. (NYSE:WWE) J.P. Morgan’s 41st Annual Global Technology, Media and Telecom Conference Transcript May 16, 2013 12:00 PM ET

Executives

George Barrios - Chief Financial Officer

Analysts

Mark Strauss - J.P. Morgan

Mark Strauss - J.P. Morgan

Hello. Thank you all for coming. My name is Mark Strauss. I cover Applied and Emerging Technologies here at J.P. Morgan. Very happy to have George Barrios, the CFO of WWE. This is a stock we don't cover. So please feel free to interrupt and ask questions whenever you guys have any.

We are going to do this one a little bit differently. So, George has prepared some slides, so if, I think, Michael, has the slides, if nobody has the presentation. I’ll turn it back as well.

And with that, George do you want to get stated.

George Barrios

Sure. So, what I thought I do is just level set everyone with some basic facts around WEE and then we can just open it up to Q&A.

Mark Strauss - J.P. Morgan

Yeah.

George Barrios

And if anybody slipping the deck that that’s out there, it’s a good source of questions as well. So the basic facts that WWE is a global entertainment company. We are about $500 million in revenue. Our EBITDA margin over last few years has been between 13% and 18%.

We are very diversified in terms of platform so we generate that $500 million in revenue across just about every medium of entertainment platform that exists, live event, tickets, Pay-Per-View buys, television licensing, advertising, toys, DVDs, electronic sell-through. So if it can be, if I’d be can be monetized at the consumer level, we’re doing it.

And then we are also very diversified in terms of geography. So we generate that $500 million across 40 countries, about 25% of the business today come from outside the U.S. and it’s doubled over the last seven years or so, and it’s a big part of our longer-term strategy, so emerging markets.

So that’s the business. If you look at the kind of what way we view ourselves in terms of core competency, it's a big global brand, a large addressable market for us, we are content rich company, over 100,000 hours in our library that we own and we have very strong attractive financial profile that allows us to invest for the future.

And the way we look at the future, we think over the next 18 to 24 months, we may have the ability to double our 2012 EBITDA, double or triple through three key levers. Number one, the launch of a pay network that would take our Pay-Per-View business and in essence build, use that 100,000 hour library to build out around Pay-Per-View’s and create a subscription service similar to an HBO.

Number two, the renewal of our four largest content agreements, two in the U.S. for Raw and SmackDown, currently with NBCU, and our deal in the U.K. and our deal in India will be renewed over the next 18 months, and we think given the way, the value of content has risen, the way the numbers that we deliver, we think that augurs well for us.

And then the third element over the next 18 months is digitizing this massive social presence that we have. We currently have about 150 million Facebook and Twitter followers. It’s more, as an example, its more than the NFL and its 32 teams combined on a global basis.

John Cena is the number three, most followed North American athlete behind Kobe and Michael Jordan. So real massive social presence and we think we can monetize that, gaming, gamification, mobile apps, to just --to name just a few. So that’s over the next 18 to 24 months.

And then beyond that, we continue to make investments in some large emerging markets, China, Brazil, Russia, Middle East specifically for us, so we got really great presence in EMEA, good presence in Mexico, good presence in India, they said to me three to five years, I think those countries that I just mentioned kind of add another wave of growth.

So that's the company. Those are our core competencies and that's the -- what we’re focus on both short and intermediate term in terms of growth.

Mark Strauss - J.P. Morgan

Got it. Okay. So, I mean, obviously, I think, everybody is familiar with WWE. I mean, I’ve seen you on TV and everything you’ve been on TV for long time.

George Barrios

Actually, we are the number one and number two longest running shows in terms of episodes in U.S. history. I think number three is Gunsmoke and number four was Lassie, I think number five is Simpsons, number one and two is Raw and two SmackDown.

Mark Strauss - J.P. Morgan

It’s amazing.

George Barrios

So it’s been a long time.

Mark Strauss - J.P. Morgan

Right. Recently, I mean, obviously as MMA has become more popular? Can you just describe the trend in popularity? I guess from 10, 20 year ago to the last five years or so?

George Barrios

Sure. Yeah. I mean, the way I look at it is, if you are in entertainment, I read -- I don’t know if anybody read Reed Hastings’ recent post, the four, five-page letter kind of on the content industry I thought it was pretty interesting if you're in content, or you follow it, I think it’s good reading.

But he talked about the way Netflix views competitors and they said, they have competitor in the acquisition for content and then competitor for time. And in the acquisition for content was very narrow. It's HBO, essentially it’s Netflix views and I’ll get your question, I’ve forgotten.

But in the battle for time, there's millions of competitors. So when you ask me about MMA. I’m not sure, but there's a million things that I’m fighting for, it’s video game, it's cat videos, it's hundred different shows that people spending their time watching.

So, yeah, MMA's we don’t view them as a unique competitor, but they are entertainment and they are out there and so, but for us not something that we takes spend a lot of time focusing on.

I will mention, I mean, when you talk about the longevity and the strength. More important is the relative strength of the shows themselves. So if you look that the number one by primetime viewership network, cable network in U.S. last year was USA. They averaged about 3, just over 3 million across their primetime hours.

The number 10 network was Adult Swim, which average about 1.5 million across primetime. So USA is number one with three. SmackDown average 3.1 million. So our number two show average more than the number one network on cable across primetime. Raw which obviously helps USA with being number one averaged 4.7 million. So 50% more than the average of the number one network and about triple with the number 10 network.

So not only have we been on a long time which creates a habit and a strong fan base, but we deliver great numbers and we do it between those two shows that’s 250 hours of programming, nobody else does that. I’ll give you an example, NHL delivers about 300 hours, NBC Sports they average 600,000 viewers across those 300 hours.

If you took Raw and SmackDown, our number three show Main Event and average all that we do, it’s about 300 hours a year we deliver and we average about 3.5 million across all three, so just to put that scale.

So, it's, we deliver a lot of programming. We do great numbers. We all leads the way obviously, and it's built then, this is not a test. You don’t have to worry that the pilots going to work. When you put Raw and SmackDown on, it’s going to deliver big numbers and actually like Main Event is going to be the number one show on the network like I have.

Mark Strauss - J.P. Morgan

Got it. So WrestleMania is the big premiere event every year.

George Barrios

The Super Bowl, yeah.

Mark Strauss - J.P. Morgan

Right. Can you just talk about the latest event that you had and how we can extent with that?

George Barrios

Other than saying, it was awesome, you want me to talk about all. So, yeah, it’s our biggest event every year. It's a week long event where we do it. We haven't done the economic impact study in New York yet, but over the last four WrestleMania's we have and they’ve all generated more than $50 million to the community more in town, so it’s wide communities bid to have WrestleMania come to town for the week.

So we just did it in New York, which was every WrestleMania week is amazing for all of us. But obviously having it in your hometown, we are in Stamford, Connecticut, so just outside New York, and also where the roots of the company where. Vince’s grandfather started, what -- different name, but what eventually became WWE, working as a booking agent for the Garden back 60 years ago and that’s how professional wrestling kind of came to be.

So it meant a lot. The event itself was an amazing success. It will be the most profitable WrestleMania in our history. We broke the attendance, as well as gross record for MetLife.

So we had almost 80,000 in the stadium and we grossed over $12 million. The old record was held by YouTube, I think it was in 2011. I think they grossed around 8 million. So we beat by about 50%.

So the event itself was amazing. The live event was incredible. We set merchandise records at WrestleMania. Pay-Per-View will do over million buys when it’s all set and done. Yeah, it was a great event, highest grossing event we've ever had all in and most profitable too.

Mark Strauss - J.P. Morgan

Okay.

George Barrios

You didn’t go. You got to come next year.

Mark Strauss - J.P. Morgan

I wasn’t there.

George Barrios

We’re going to be in New Orleans. So that should be fine.

Mark Strauss - J.P. Morgan

I’ll take my kid. Okay. So can we just….

George Barrios

The highlights for me by -- it wasn’t the highlight. I’m walking around, taking one of our board members from one of the suites down to the arena because it’s cool, it’s more fun. You got to be in the arena and also I hear chants of Bueller, Bueller. And I kind of look around and there's Matthew Broderick running down with his kids. I think they came from the box too to come see the match of those, pretty surreal.

Mark Strauss - J.P. Morgan

Okay. Can we just talk about different regions? How much your revenue comes domestically versus internationally and what’s kind of the trend there?

George Barrios

Sure. About 75% is in the U.S., about 25% outside the U.S., about two thirds of that 25% is in EMEA. So we are very bullish long-term internationally over the last three years because of our concentration in EMEA. The economy has taken its toll. So we haven't seen the growth that we had seen previously.

Some of that is not just international element. It is some of the things that have impacted the company overall like our videogame business, which has struggled over the last couple of years. As THQ struggled, we recently moved that to Take-Two and we’re really excited about the future of that. But the really strong foothold in EMEA, Mexico is one of our -- depending on how many events we do in a year that will be our fifth or fourth largest market in the world and then India.

As I mentioned, before four largest content deals are Raw in the U.S., SmackDown in the U.S., the deal in U.K. and the deal in India. So after cricket in sports entertainment, we’re ahead in India. So we do really good numbers. We’re really excited about the potential there. We don’t do, I mean, we make $0.05 in consumer products today and we have this very rich content deal because our show does well. Obviously, India has got its very unique infrastructure around consumer products and retail but that’s changing.

Our partner in retail is starting to do more in India. So he said to me next year India is going to be a big consumer products, no. Five, six, seven years, I think it will. I mean, as long as the brand stays healthy and we do really well in India.

Mark Strauss - J.P. Morgan

Okay. Is there any strategy to introduce local entertainers like a Portuguese speaking wrestler in Brazil or something?

George Barrios

Well, if you look that -- you like -- are you Portuguese? That’s an interesting one. I never heard that as the example. I gave Mexico, India never Portugal. It becomes a small market, niche markets. So I’m not sure we’ll do that. But if you look at the shows, I mean the shows reflect our audience. We've got Chinese, Japanese, Indians, Scottish, English, obviously American, Mexican wrestlers. I do not think we have a Portuguese one yet. I’ll see, may be we work on that. I may focus on Brazil as opposed to Portugal.

And we track ratings across the world and one of the things that you see is when Wade Barrett of English descent is a key storyline contributor, our ratings in the U.K. do better. When one of our Indian superstars is key in storyline, our ratings in India do better. So kind of managing all that is tough. To your question specifically, we talk about it. We don't think today it makes sense because one of the key value propositions, we believe the reason the show travels internationally is because of catchiness of it, the Americana of it.

I don’t think you can just take it and say all right, let’s take 20 athletic people of X descent, put them in that country and people are going to say it’s WWE. You got to be on TV. You got to be made a star and people then want to see the stars. Everybody likes Cover Bands but I think Rolling Stones would draw better in China than for Chinese guys playing Rolling Stones music. So we’re kind of the same thing. So we never say never but strategically we don’t think it works.

Mark Strauss - J.P. Morgan

Okay. So the…

George Barrios

Now, I will tell you this. If we launch a network in bigger country Mexico and now we have a form of built-in exposure, could that change that because now you can make stars because you own -- you have the real stake. Yeah, then I could see that maybe getting a little -- some likes.

Mark Strauss - J.P. Morgan

Got it. Okay. So you talked about doubling to tripling your EBITDA by 2015. And I know you just introduced this earlier this year. So still early days but what can you point to kind of give investors confidence that you're making inroads there?

George Barrios

Yeah. So I mean if we take them one by one, I talked about the first, those four agreements, probably other than the people in the NHL, no one can tell you more about the NHL deal that was signed with NBC Sports. I talked about those 300 hours, 600,000 average viewers at 200 million.

I look at the NASCAR deal which is about 300 hours. They average about 3 million. I believe is between 500 million and 600 million a year. And then I look at our numbers. If you combine them all in, we’re about 300 hours. We average about 3.5 million across that. We’re nowhere near those numbers. We haven’t given out exactly what our numbers are. But those four deals represent about 100 million today globally.

So each -- we don’t talk about each individual contract but the four deals I mentioned, we’ve got 100 million globally. I just mentioned the domestic deals for NHL and NASCAR. If you look at scripted entertainment you see the same thing, different scale that you’re talking about, a 12-hour series with 80 hours of replay. So it's maybe 90 hours. It’s something like Royal Pains or Suits will do but even the cost there is significantly more than where we’re at today.

So I -- we’re not particularly good negotiators. We say we’re great partners and average negotiators. But I think if you just looked at the Raw numbers, there’s a real opportunity there. So I’d say investors look at what other folks do NHL, NASCAR. You guys can do your own math and then look at our numbers and say do you think those are there. So that’s number one.

Number two on the network, we said we’re going to take our Pay-Per-View business in the U.S. other than WrestleMania, which today cost about $45 in SD and $55 in HD. So it would cost consumers about $600 to get our best content. Those 11, we’re going to package them. We’re going to take that 100,000 out of our library and we’ve already done -- started doing this.

We’ve got three shows in the can already. So we’ll create new original content, create a subscription service, price it somewhere between 999 and 1499 a month. And we think that just opens up not only our Pay-Per-View s but the rest of the content to an audience who today can't afford to buy the Pay-Per-View s because it’s a $50 hit on your cable bill every month when average people bills in the U.S. are about $100. So it’s too big hit.

We think some where 999 or 1499 works. If you look at the U.S. there are -- of the 100 million homes in the U.S., 50 million identify themselves as either passionate, casual or lapsed fans of WWE. So you have 10 million of passionate, 20 million of casual and 20 million of lapsed, very round numbers but to give you the scale.

If we can do 2 million to 4 million subscribers from that audience and we've done a lot of research, it says we can. We’ve done a lot of consumer research. You're talking about anywhere between $50 million and $150 million of incremental EBITDA to WWE. So that’s a second one.

The third one, I don’t it’s a scale of the first two because today we don't generate any economics, it's accretive and it's important to us on multiple levels is that social audience that I mentioned. And you look at 150 million followers across Twitter and Facebook, you look at what other folks have been able to do with gamification. We know how much our audience loves to engage with us on these platforms. We think there's a way to monetize there. Again that is a scale of the first two but if you said to me should we be able to do somewhere between $10 million and $15 million a year there.

I think that's reasonable on $60 million base of EBITDA, which were roughly in 2012. It's meaningful as well. So those three things over the next 18 month and I say that you should have a little checklist, if you’re investor and following. Did they announce the renegotiation of Raw and SmackDown? Did they announce the renegotiation of the U.K. deal? Did they announce the renegotiation of the India deal and what are the economics around that? Did they get a carriage agreement on the network? What’s penetration of that? Check those things off.

And we hope to be announcing that at all. It isn’t going to come on at once. But as we said over the next 18 months, it will come. And if we’re as successful as we think, we can be by 2015 that’s how we double and triple. And the other thing which is less about success, it’s more about stopping -- starting to breed on our movie business. We've invested a lot there.

We think we've figured out the model. We had one movie that didn’t work so well recently, Dead Man Down with Colin Farrell. But we had one that was a home run for us, The Call with Halle Berry. So that has really hurt our -- constricted our earnings over last couple of years as we released movies and they haven’t performed.

We took a little bit of a hit with Dead Man Down, but the performance of ‘The Call’ overall, we think to slate that we will deliver this year with round about 15% IRR. So, I would say if I’m an investor and we got to prove it to people, because we've invested a lot over the last 18 months and taken our earnings from 90 to 60, because we want to take advantage of this growth opportunity. So we put a lot of overhead in the company to do that. If we are successful, you will see us start checking off those boxes.

Mark Strauss - J.P. Morgan

Got it. Okay. You kind of touched on this earlier about the video game business. THQ has now gone away. You are partnering with Take-Two. What does Take-Two bring to the table and…?

George Barrios

Yeah. There were three things, when THQ went through its bankruptcy and obviously, then our deal was, we could go wherever we wanted and obviously we are a successful franchise so and we are an evergreen franchise. You can release our game every year and you are going to sell millions of units. So there is a lot of bidders.

The things we liked about Take-Two were really three things. Number one, their focus on quality and it's measurable. It's the Metacritic score on games. They do very, very well. Our game had slipped into the high 70s as an analog. The NBA, which we view as -- which we view as an analog has been in the 90s and that’s Take-Two’s games so. And that Metacritic score tends to historically track with game sales if you look at the overall industry.

So their focus on quality was huge. Their focus on brand was huge, we loved. Again going back to the NBA game, we share a lot of the same demos with the NBA. We like the way they brought in music stars, I think it was like Jay-Z, if I remember that was on the cover of the last NBA game of last year. So it was more than just about the sport. It was about the lifestyle. We kind of like that, so we love their focus on brand and they’ve also been successful in 360 degree monetization.

I listened to their earnings call last week and Strauss said that 27% of the revenues in the quarter were digital. If we looked at our revenues, digitally over the last couple years it sat around 5 or maybe got as high as 8% or 9% in particular. But we were lagging the overall industry in the composition of our game revenue with THQ. So we liked their success -- Take-Two success in monetizing 360 degrees. So obviously, we’ve got to cut the deal and we had to get the deal that was comfortable, that we were comfortable with on the economics and we did.

Mark Strauss - J.P. Morgan

Anyone in the audience?

Question-and-Answer Session

Unidentified Analyst

(Inaudible)

George Barrios

Yeah. So like I mentioned before, it re-imagines the Pay-Per-View. It takes a 11 of our 12 Pay-Per-View s as the core value proposition. It wraps around 10 to 15 hours of premiering content on our network, which don’t include new originals as well as second windows of things like Raw and SmackDown. Replay rate like most networks about seven to one. So that’s how you get to the program, the network.

We've done the shows. The original shows were already in the can for launch. We’ve got three series, Monday Night Wars which chronicles the war between McMahon and Turner and what was going on in the ring and outside the ring. WWE Countdown, which is a half hour show of counting down top catchphrases, top finishing moves, top this, top that, a lot of fun and have social media element to it. People get to votes even though it’s in the can. We will be able to integrate that.

And then the third show is WrestleMania rewind, kind of great moments from WrestleMania Past. So that’s the kind of stuff we will do and we’ve tested those pilots with fans. And one of the nice things is, not only do the current passionate fans like it or casual -- and the casual but lapsed fans like a lot of that stuff, because they get to relive some of the past. And are really nicely curated ways, not such putting Raw footage on it, kind of contemporize and contextualize today, either with new stars, different people in pop-culture are part of the production. So that’s the programming.

And in our view, if we get two to four millions subscribers, obviously not at launch but when you get to steady state, it's transformational for us at a price point of $999 to $1,499. We’ve done a lot of research. It says that’s doable. Again, we will see when it comes.

No -- it would be kind of like in HBO, so you would be distributed through the MVPDs, cable, satellite and the telcos. Ongoing, I mean, one of the reasons that the launch has taken longer than we would've liked is those are not easy discussions to have, if you follow the industry. So we continue to talk to them. We think, eventually, they'll see the opportunity because we think we can grow that Pay-Per-View pie pretty significantly so.

Mark Strauss - J.P. Morgan

In the back.

Unidentified Analyst

(Inaudible)

George Barrios

So, I will start with the last question first. We think it fits. As I mentioned in my opening, we've been successful, creating content and monetizing it on every platform. So we think we have the DNA to create content and monetize on that platform. We also think it brings the brand to people who are fans today. When I was watching The Call at my movie theater and the WWE logo comes up and you can hear people going, WWE, is that the wrestling and the movie comes on, can you put a price tag in that moment? No. Overtime, do we think if we are successful, does that broaden the brand? We think so.

So that's why we are in it and we think we can make money. No, we haven’t been successful doing that part. The first, if you look at our movie business, we spent about $100 million starting in 2006 through 2009, releasing seven movies and we did just better than break-even, so not good enough. We did like 3% IRR. We changed the model, hired someone from the outside to produce and run the business and we were going to self distribute because we thought we could keep a bigger share of the economic.

We released nine movies in 2010 and ’11 that we will produce starting at ‘9 until the beginning of ’10 and those movies did not do well at all. They compressed earnings in 2011 because the impairments were close to $30 million. And in our size business, obviously that's a massive hit. Got a new team in place for the first time, at least since I've been there.

We brought someone in with commercial experience in the movie industry, specifically Miramax, Michael Luisi. And he's been running the business of movies being released at this point starting late last year and we’ve released three so far this year, actually four. We just released No One Lives, a limited theatrical. We are happy with the performance. I mentioned Dead Man Down, wasn't happy with that.

But if we looked at the movies that Michael has released since the middle of last year through today and look at the current ultimates on those movies, including Dead Man Down, which hasn't performed well. But including ‘The Call’ which has performed exceptionally well, it's a 15% IRR. Not as good as we wanted, but certainly better than break-even and certainly better than the losses we took on that second tranche. And we think we’ve got the right team in place.

We are starting to see success there. I think, to prove it to investors, we are going to have a lot more than just six releases that overall work but were committed to it. And as far as the spending, if you looked on average and it's been lumpy. But if you look at since we've been in the business, we’ve averaged about $20 million or so a year, deployed. That's what we guided this year. So, I think that's four year right now. I think that’s a good assumption to make that we will invest around that level.

Mark Strauss

Can you just touch on? Sorry, go ahead.

Unidentified Analyst

(Inaudible)

George Barrios

Yeah. Yeah. It’s stayed pretty constant. I would say there was a period of time in what we call the Attitude Era, where the shows were little bit more aggressive maybe more risqué. We over indexed in that older teen, young male, so maybe that 15 to 24. I forgot exactly how we break it up on that slide, but we probably over indexed there. What we've gone back now to is, more we are, if those breakouts in the page -- can you tell me the page number, Michael? Okay, can you tell me the pages numbers?

Unidentified Analyst

(Inaudible)

George Barrios

16. So when you look at that, you see that we’re pretty evenly distributed among age groups. If you look at the indexing to the U.S. population, it's roughly equivalent. So it’s not like we are over indexing or under indexing and it's by design. We know because we’ve don’t a lot of research on it, that if we can get kids in early, they're more likely to stay longer and also come back. Even if they leave at a certain point, they will come back and bring their kids.

So it's important for us to get kids early. To get kids, you need to have moms feel comfortable with the programming, which is why all our shows are now PG. Now, they used to be TV-14 and or TV-14. Now, all our shows are PG. SmackDown has been PG for quite a while. So that’s why it’s by choice that we do enter -- it’s by choice that that pie looks the way it is because we think that's the best for our business. And on that page, you will also look, it’s almost 40% of the viewership is female on our shows, right?

So you take about -- we have 14 million or so viewers a week, watching one of our shows. 40% of that, 4 to 5 million viewers are female. That's more than the average primetime of any female centric network by a long shot. So it's not just the age, but even the gender split is we think is pretty impressive too.

Unidentified Analyst

(Inaudible)

George Barrios

I think so. I just need the guys on the other side of the table to agree but yeah.

Unidentified Analyst

(Inaudible)

George Barrios

Yeah. That’s right.

Unidentified Analyst

(Inaudible)

George Barrios

Well. There is an anchoring bias in human beings. And so when you’ve been at one place, it's hard for people to kind of get their heads around, even though if the data is pretty compelling. People throw different things out well. Hey, look we do more sponsorships in some of the sports leagues, for example, than we can do it with WWE.

And some of that is true but at the end of it, as I always say, content is pretty easy. You're aggregating eyeballs, that's all we're doing maybe some of the eyeballs are more valuable than others. But at the end of the day you are aggregating eyeballs and you are monetizing it through advertising, which is about 100 billion a year on TV and through people paying for, which is another 100 billion that people pay into the MBPD's and then get spread out among the distributors, aggregators which are networks and creators. We to your point our numbers are compelling within that construct.

Does that mean the person crossed, the way he is going to write a check that's significantly more that he has been writing. It’s tough because of that anchoring but we believe someone will. If it's not NBCU, we believe someone will and we’ll see where that goes. I agree -- I think the numbers are and they are almost self-evident if you look at it.

Mark Strauss - J.P. Morgan

Could you just talk about consumer products? How important is that percentage of revenue and some of the recent initiatives and I think, I saw a new line in India and a partnership for construction category?

George Barrios

Yeah. So, consumer products is about -- the mix will change a little bit depending on how many videogames we have in particular year. But it’s around 25% roughly of our business, globally. So it's very important. We've been very successful. Our action figure line last year was the number two action figure in the United States trail in Transformers. We’re always in the top five or six usually the movies of that particular year that come out of Spiderman kind of, it will take the top slot. But we’re always in the top five or six but number two was our highest placing ever last year. So we’re really happy with the toy category.

You mentioned construction. It's a category we haven't played at -- played in with Mattel. So that’s one of their strengths. So this year we signed a partnership with The Bridge. It’s kind of a new player in the category. We like them. They're aggressive. They’ve got good retail placement. We will launch this year. We won't launch at Wal-Mart this year because the deal got struck too late for us to be able to produce at that scale.

So we would be at Toys'R'Us and Kmart and Target I believe. But that's the fastest growing toys subcategory and we weren't playing. And it's really exciting. We think our thing lends itself pretty naturally to it. You can do play sets around it. You can create kind of -- our characters are kind of superhero quasi, superheroes. So we think there is a lot of cool things you can do there. So really excited about that.

Mark Strauss - J.P. Morgan

You mentioned India?

George Barrios

As I mentioned before, great content deal in India because we deliver numbers in India to our partner but nothing in consumer products. So it's somewhat of cognitive dissidence with that. The main reason is India's both retail infrastructure, actually the legal issues of retailers being able to invest. Indian parliament actually just voted a month ago to let foreign investment come in into their retail sector.

I think that's a big deal but specifically on your point, we’re trying to do more in India in target. We've opened up an office. We have three people in Mumbai and we work with Mattel to introduce a lower price point action figure, smaller action figures. It’s about per 4 inches as opposed to the six-inch that we had. And we’ve been coming lower. I still think -- and I was talking to, the guy runs CPG for us, Casey Collins. I still think the price point is too high.

So, we are still working with Mattel and may be getting that lower, so working that. But we’re starting to do a little bit more in India. Now, they won't be a big number but it’s part of kind of adapting to the marketplace that four-inch action figure.

Mark Strauss - J.P. Morgan

Any one else. Yeah. I think we’ll wrap it up. Thank you very much, George.

George Barrios

Great. Thanks Mark. Thanks everybody for coming. Appreciate it.