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Operator
Good day, and welcome to today's first-quarter earnings release teleconference. At this time, all participants are in a listen-only mode. Later there willing an opportunity to ask questions during a our Q&A session. I would like to turn the conference over to Michael Weitz, Vice President and Investor Relations for World Wrestling Entertainment.
- VP, IR, Financial Planning
Thank you and good morning to everyone. Welcome to World Wrestling Entertainment's first-quarter 2008 earnings conference call. Joining me for today's call is Linda McMahon, our CEO; Michael Sileck, our COO; and George Barrios, our CFO. We issued our earnings release early this morning and will be referencing a presentation as part of our discussion. These are available on our Corporate website at Corporate.WWE.com.
We will be making several forward-looking statements today as part of our discussion. These statements are based on management's estimates. Actual results may differ due to numerous factors which are referenced on page one of the presentation and in our earnings release. Today we will review our financial results for the first quarter and will follow this review with the Q&A session. At this time I would like to turn the call over to Linda.
- CEO
Thanks, Michael. Good morning, everyone, we appreciate you joining us today. We had a strong first quarter which provides a favorable start to the year. We believe this result reflects our efforts to sharpen our strategic vision and to execute our core business model.
I would like to take a moment to talk a little bit about what we mean when we use the term "core business model." I think this will be helpful because it demonstrates how we define our strength as a Company and the way we think about building on those strengths. It also demonstrates how we evaluate our growth opportunities and thus effects how we deploy our capital. Our business model is based on established expertise in three principal areas.
First, we create and own original content that we have developed for our cultivated and passionate customer base. Second, we are an innovative marketing enterprise engaged in multiple ways to promote our brand and expand our reach. Third, we are a distribution machine determined to drive growth through traditional as well as emerging channels. Constant creation, marketing, distributions, these are the pillars of our Company, our operational decisions, our initiatives, our investments are all based on supporting one or more of these three elements of our model. As managers, our goal is to deploy our resources efficiently to support the global expansion of this, our core business. When we do this, when we play to our strengths, we provide superior shareholder return.
The power of our brands can best be seen where all three critical elements of our core business work together. The power of our premiere event, WrestleMania, exemplifies what is possible when we manage all three elements. The event is a testament to the creative and marketing drive of the Company and our ability to execute our vision. For the quarter, WrestleMania generated over $30 million in live event and Pay-Per-View revenue. Attracting approximately 75,000 fans, it also set a record for the highest grossing live event in our history. Preliminary reports from our cable and satellite partners indicate that WrestleMania generated approximately $1.1 million buys.
During the quarter, we announced several important marketing and distribution affiliations. These include our new television partnership with My Network TV. After a successful run on the CW Network, our SmackDown program will transition to My Network TV this fall. My Network TV has embraced SmackDown as the cornerstone of is line-up with a broad reach of 97% of U.S. households, this new network represents a better fit for our program and provides more favorable terms to WWE. We are confident that My Network TV will help broaden SmackDown's audience and provide financial returns for us over the long term.
Other important affiliations announced during the quarter includes our new toy partnership with Mattel which commences in January 2010 and the launch of our kids magazine which hit newsstands in April. On this last initiative, we know based on our research that engaging our fans at a younger age strengthens their loyalty to our brands and products. Our key to our marketing strategy. Over the long-term, we expect each of these developments will strengthen our ability to deliver original content, expand our audience, and extend our brands in both traditional and emerging markets.
As I mentioned earlier, a fundamental objective is to deploy our capital in an efficient manner, to expand our core business model, and provide superior shareholder returns. Consistent with that objective, we announced and paid a 50% increase in our quarterly dividend for all shares not owned by the McMahon family. The decision was based on our commitment to the Company's public shareholders and our determination to reward long-term ownership of our stock. Though dramatic, the increase was supported by WWE's financial performance in 2007 and by our confidence in the Company's future. While we place a high priority on investing in our International and Digital Media initiatives, we also intend to increase our dividend over time ultimately matching the growth that we expect to achieve in our earnings.
Before I conclude, I would like to introduce a new member of the WWE team, George Barrios who has recently come on board as our Chief Financial Officer. George's experience as Vice President and Treasurer at the New York Times Company will be critical as we build on our strength and grow our business Internationally. George replaced Frank Serpe who retired after 21 years with WWE. We appreciate Frank's commitment and dedication to the Company. With the addition of George, we continue to strengthen our executive management team and enhance our ability to embrace the challenges and opportunities of the future. We are pleased to have you with us, George. And now I will turn the call over to Michael Sileck who will update you on the progress of certain key initiatives within the quarter.
- COO
Thank you, Linda, and good morning, everyone. I would like to start by sharing my perspective on the Company's progress. For the quarter, we posted a 51% revenue growth reflecting the impact of WrestleMania, and increases from each of our business units. Our top-line performance in a weakening economic environment continues to demonstrate the strength of our business model. We believe that diversity and entertainment value of our product offerings reduces our economic exposure; however, growth in some areas of our business such as e-commerce and online advertising may be constrained by declines in consumer and advertiser spending.
As we communicated in previous calls, we have targeted average annual revenue growth of 10%, and average annual earnings growth of 12% over the 2006 through 2011 period. Basing on our investments in our core business model, we anticipate accelerating growth over the five-year period. The first quarter of 2008 marked important progress toward these financial objectives. We significantly improved our Pay-Per-View trends. In addition, we continued to increase revenue and earnings from both our International operations and our online advertising, while investing in our content production and distribution capabilities.
The results of the quarter reinforce our view that we have stabilized our Pay-Per-View business. In the first quarter, Pay-Per-View buy rates increased 22% compared to the two comparable events Royal Rumble and No Way Out in the first quarter last year. The trend compares very favorably to the 12% decline incurred during the first half of 2007. We attribute this improvement to an intensified focus on our storyline content and to the promotional benefits of streamlining our Pay-Per-View schedule. As a reminder, we have reduced the number of events in our 2008 schedule to 14, eliminating the January New's Year Revolution event. By concentrating on our creative and promotional efforts, we believe we can increase the level of our Pay-Per-View buys over time.
During the quarter, we continued to capitalize on opportunities outside the U.S. and generated a 41% increase in International revenue and a 38% increase in profits. Excluding the impact of WrestleMania, our International profits grew 23%. This performance was led by the expansion of our video game licensing, particularly in Europe. In addition, the quarter benefited by the successful expansion of our live events to new markets in Latin America, such as Chile, which attracted sellout crowds that averaged over 11,000 per event.
One particular point of success is the development of Spain as a significant and profitable market for WWE. About a year ago, we persuaded our TV partner [Sotu Cabo] to shift our SmackDown and Raw programs to a visible weekend time slot. In addition, we supported these moves with a step up in our marketing and promotional activities. As our audience for each program increased by about 40% to approximately 1 million viewers, we were able to implement a comprehensive licensing program adding 18 licensees to our previously nascent program. Our recent first quarter was distinguished by an estimated fivefold increase in our video game sales and by the advent of DVD shipments which were absent a year ago. As a result, we were able to achieve a fivefold increase in both revenue and profits from the first quarter last year.
This growth, of course, stems from the thoughtful execution of our core business model, which focuses on content, marketing, and distribution as Linda has discussed. After establishing a new International organization last year, our first-quarter results underscore our potential to extend this model and to drive growth in both traditional and emerging markets around the world.
Turning to our Digital Media initiatives, during the quarter, we saw year-over-year growth from online advertising and the distribution of mobile content. The growth in online advertising was led by the media spending of prominent advertisers such as electronic arts, Unilever and Sony. During the quarter, however, both our on-line advertising and e-commerce businesses were adversely impacted by a 9% decline in unique visitors. To address this challenge, we are broadening and evolving our content. Just a few weeks ago, we beta launched our first official community site, WWE Fan Nation. The site is a comprehensive social networking service that provides users with the ability to create profiles, share photos, create blogs, and discuss ideas on WWE's message boards. Going forward, we will continue to monitor and respond to changes in online behavior. As a result, we expect to maintain WWE's position as the preeminet wrestling-related destination for our fans. Overall, we remain excited about WWE's opportunities and the steps we are taking to ensure our progress.
At this point, I would like to turn the call over to George Barrios to review our financial performance for the quarter. George?
- CFO
Thanks, Mike, and good morning, everyone. We delivered a 51% increase in revenue to nearly $163 million in the first quarter, and a 32% increase in operating income to $27.1 million. The growth was led by the impact of WrestleMania, which added $31.3 million to revenue and $7.1 million to profit contribution. As a reminder, the comparable WrestleMania event was staged in the second quarter of last year.
During the current quarter strong growth in our licensing business was offset by increases in television production, marketing and staff-related costs. These costs were incurred to produce our programs in high definition, to broadly promote our brands, to establish our International infrastructure, and to enhance our talent development programs. Spending in these areas serves to strengthen our content creation, marketing, and distribution capabilities which are the three critical pillars of our core business model. As a result of these strategic investments, the Company's operating income does not fully reflect the continuing strength of our business. I will reiterate that based on strengths across our business, including our success in expanding Internationally, we expect to maintain our growth path and achieve our long-term markets as Mike discussed.
For a more detailed review of our performance, let's turn to page five of our presentation which lists the revenue and profit contribution by business unit as compared to the prior year. Starting with our Pay-Per-View business, strong revenue growth reflected the performance and timing of our WrestleMania event, an improving trend associated with our other Pay-Per-View offerings. WrestleMania XXIV generated $23.8 million in Pay-Per-View revenue based on approximately 1.1 million buys and a 10% domestic price increase of $5 in the quarter. This compares to $24.3 million in revenue and nearly $1.2 million buys for WrestleMania XXIIV after its first month of release in the second quarter of last year. As mentioned in previous calls, the Company is focused intensely on addressing the operational challenges to our core Pay-Per-View business. Notably, buys for our other Pay-Per-View events increased 22%. Revenue from live events including merchandise sales at these events increased by $6.8 million or 29% reflecting the high level of attendance to our WrestleMania event.
Excluding WrestleMania, average attendance at our North American events declined by 9% to 6300 fans per event. The year-over-year decline can be attributed at least in part to the timing of our touring plan and the staging of popular venues from last year's first-quarter ad subsequent quarters of 2008. Overall, excluding the impact of WrestleMania, both our revenue and profit contribution for live events were essentially flat for the first quarter of last year. For the full year, however, we expect our live events to generate growth in both measures of performance.
Revenues from the distribution of our television programming increased by 10% or $2.1 million, primarily due to increased domestic and International rights fees. These increases, however, were offset by incremental costs to produce and broadcast our programs in high definition. In our consumer products segment, our licensing business delivered an impressive 27% or $5.6 million increase in revenue. This revenue growth primarily reflects higher sales of our video game. Unit sales of our SmackDown versus Raw 2008 video game title increased by 42% to nearly 5.2 million units for the first quarter. Sales benefited from the launch of this game on the PS3, WII and Nintendo DS platforms. The addition of these game platforms aided our International expansion.
Sales in European markets such as Spain accounted for the majority of the year-over-year growth in licensing revenue. Home video revenue increased 4% to $14 million reflecting the shipment of almost 1.2 million DVD units in the quarter, 9% above the prior year period. Sales of titles from our Catalog increased by about 64,000 units to 508,000 units for the quarter. During the period, home videos profits margin was impact by higher distribution expenses, and increased reserves attributable to sell-through rates that were below last year's high levels. Our Digital Media segment comprised of online advertising, e-commerce and wireless businesses delivered revenue growth of 16% compared to the year-ago period.
Growth in this segment was driven primarily by our online advertising business. For the quarter, online advertising revenue increased 62% primarily reflecting increased sales and higher effective pricing. Traffic to our WWE.com website declined 9% to an average of 15.9 million unique visitors per month. Impacted in part by the decline in traffic, e-commerce orders dropped 18% during the quarter to under 68,000. As Mike mentioned earlier, we are working to address the underlying challenge. Partially offsetting the drop in e-commerce, the quarter saw an increase in our mobile business primarily from the impact of our AT&T agreement which became effective in February of last year.
During the quarter, WWE Films recognized revenue of $11.3 million, predominantly from continued DVD sales and licensing of "The Marine" in pay and free TV markets. Capitalized film production cost were amortized in proportion with the recognition of revenue. Based on the revenue recognized in the quarter we amortized $9.4 million of feature film assets yielding $1.9 million in profit. During the quarter, we began production on a direct-to-video project "Behind Enemy Lines: Columbia" and a feature film "12 Rounds." These will be distributed by our film partner Fox beginning in 2009. As of quarter end, we had $16.8 million in feature film assets.
Included in "other" on page five is our magazine publishing business. Here higher advertising and subscription sales were offset by adjustments stemming from lower-than-expected news stands sales for two special issues distributed at year end. Profits declined on a year-over-year basis as the magazine also incurred increased paper and printing costs. Our overall profit contribution margin declined to 39% compared to 46% in the first quarter last year, mainly due to increases in our Pay-Per-View and television production costs. These costs stems in part from the staging of WrestleMania XXIV and from increased promotion for that event. Excluding WrestleMania, our profit margin was 43%. In addition incremental costs arose from the production and broadcast of high definition programming which commenced at the beginning of this year.
For the quarter, operating income increased 32% to $27.1 million, predominantly from the timing of WrestleMania. Strong sales of our video game and improved Pay-Per-View trends. SG&A expenses increased to $33 million compared to $26.4 million in the first quarter last year, primarily due to marketing and staff-related costs which I discussed earlier. It should be noted that the effective tax rate in the current quarter was 30% as compared to 35% in the prior year quarter.
Page 14 of our presentation compares the quarter-over-quarter results and provides a summary of changes by business.
Page 15 of the presentation contains our balance sheet which remains strong. On March 31, we held $256 million in cash and investment with virtually no debt.
Page 19 shows our free cash flow which was $5.3 million for the quarter compared to $23.1 million in the prior year. The decrease reflects changes in our working capital. Primarily due to the timing of WrestleMania. Capital expenditure increased $8.8 million primarily associated with our investment in high definition broadcast equipment. In addition, the quarter reflected increased production spending for our film projects. That concludes this portion of our call, and I will now turn it back to Michael.
- COO
Thanks, George. We are ready now. Please open the lines for questions.
Operator
All right, thank you. (OPERATOR INSTRUCTIONS) We will take our first question from the site of Ali Mogharabi from B. Riley & Company. Go ahead.
- Analyst
Hi, guys. Thanks. Mike, you mentioned that you are still expecting -- actually you are expecting top and bottom-line growth over the next few years to accelerate. Am I to assume that both. You are expecting acceleration in both top and bottom line? So higher than 10% to 12%?
- COO
Yes, over time, that is what would you expect.
- Analyst
Okay. So -- so is it safe to assume 15%, 17%. I mean, can you give us an idea?
- COO
I don't think we want to tie into a specific number, but, the reason we have given sort of the five-year view on the top-line and bottom-line growth is so that you can average in both the performance beginning in 2006 all the way through 2011. And we think over that period of time we will be able to hit the milestones that we have put out there.
- Analyst
Got you. And a couple more questions. On the -- on the, where do you see SG&A going forward? I understand the impact of WrestleMania. But wondering given the new International structure that you guys have built, is it safe to assume that quarterly SG&A of $30 million going forward?
- COO
I would say quarterly SG&A,, what we saw in the fourth quarter is reflective of levels we will see throughout the year.
- Analyst
Got you. All right, thanks. By the way congrats on the success in WrestleMania.
- COO
Thanks, Ali.
Operator
Our next question comes from the site of Alan Gould from Natixis. Please go ahead.
- Analyst
Thank you. A few questions. First following up on SG&A. Wasn't there some incremental expenditures for WrestleMania in this first quarter?
- CFO
Most of the -- the incremental WrestleMania costs, most of them are above the SG&A line, certainly because of the timing of the event, being our premiere event. Other costs are generated some which that hit the SG&A line, but most of the direct costs around WrestleMania are up in profit contribution.
- Analyst
Okay. George, on the tax rate, should we anticipate it stays at the 30% level or goes back to more normalized 35% level?
- CFO
I would say normalized 35% for the year.
- Analyst
Okay.
- CFO
There were a couple of discreet items in the quarter that lowered it to 30.
- Analyst
Okay. Mike, just a quick question on the rating, I saw for the first time there seems to be a little bit of a slippage in the TV ratings. Can you tell us what might be going on there?
- COO
Well, over time, Alan, you see these kind of ebbs and flows in terms of the television ratings that affects not only our program but programs in general and it's of course driven to a large extent by the popularity of a given storyline. So we are -- we are committed to providing the absolute best program we can on a week-to-week basis. It is tough week in and week out coming up with great programs, but we really feel -- Vince has never felt better about the creative direction of the Company and the talent that we have in place. So -- and also I will comment that USA Network continues to be very pleased and thrilled with what we are providing them and as we have mentioned, we have brought on -- we are bringing on My Network TV to pick up SmackDown in the fall and that reiterates the ongoing and perceived strength of the brand out there in the marketplace.
- Analyst
Okay. Thank you very much.
- COO
Sure
Operator
Our next question comes from the site of -- excuse me is from Jake Crandlemire from Ramsey Asset Management. Go ahead.
- Analyst
Hi, guys. Can you talk about the ticket price increases at the live event in the quarter, 25%. How much of that is coming from mix, venue ticket prices and how much is actually coming from apples-to-apples increase on the tickets? Thanks.
- COO
Yes, I think it's -- we always strive to provide a bargain to our fan base and we continue to do that. Of course given the mix of -- of International to domestic events, that has an influence on it. The impact of WrestleMania in the event -- in the quarter had an impact on that as well. So domestically on a kind of same store basis, if you will, our -- the pricing on our tickets is relatively modest in terms of from a growth standpoint.
- CFO
And I would add that if you exclude WrestleMania, the increase on the ticket price was not 25%, it was 5%.
- Analyst
Okay, perfect. Thanks, guys.
- COO
That's in the press release.
Operator
(OPERATOR INSTRUCTIONS) We will take our next question from the site of Jamie Clement with Sidoti Company. Please go ahead.
- Analyst
Hi, good morning.
- COO
Good morning.
- Analyst
Can you give us a sense of roughly what percentage of WrestleMania buys this year came from outside of North America? And -- or -- if you don't have the exact number -- I mean is that -- did you -- did you notice an increase year-over-year?
- COO
No, it is roughly -- roughly a third of the buys are coming Internationally.
- Analyst
Okay.
- COO
And that's roughly on par from what we were seeing a year ago, Jamie.
- Analyst
Okay. I mean -- obviously Pay-Per-View is not as well established in certain emerging markets where your programming is. Can you talk a little bit about over time being able to generate higher buy prices in those markets?
- COO
Yes, it is our intent that over time, as the Pay-Per-View infrastructure gets built out and developed in many of these outlying markets that that will positively impact our Pay-Per-View business Internationally. And then in addition, culturally over time, we hope to have our fans more accepting of paying higher rates for the premium product that we provide. So we think it is both an infrastructure issue. And it is a cultural issue that both of which we think over time will accrue to our favor.
- Analyst
Okay. Thank you very much.
Operator
We will take our next question from the site of [Dan Kilmary] from UBS. Please go ahead.
- Analyst
Hi, good morning, guys.
- CEO
Good morning.
- Analyst
Two quick questions. First on the dividend. Should we -- should we think about this as a s dividend rate now being set at $0.36 or would this to be construed as a one-time quarter-over-quarter event that you are going to adjust that dividend based on various issues?
- COO
I think you should look at it as set. You know we -- we put the dividend increase in place to reward our shareholders, but on an ongoing -- we looked at rewarding them on an on going basis. I would not view this as a special one time. I would view it as in place over a long period of time. And we hope over time as we grow into this -- this dividend that we will be able to raise it , over time. But the McMahons were very generous in sort of allowing us to come up with this split dividend concept which was just a very efficient way of rewarding our public shareholders?
- Analyst
Will the split dividend context remain in place until further notice?
- COO
Until further notice.
- Analyst
Mike, spend a minute on WrestleMania XXIV. And why -- and maybe I just didn't pick this up in the -- in the presentation, but why was the profitability so much lower relative to the revenue level which was consistent with the year ago?
- COO
Well, there was -- there was a few different things going on. The revenue was relatively consistent. Our talent costs this year to put on the event were higher than they were a year ago and part of that was just the arrangement that we had. We didn't pay Floyd $20 million as reported, but we did pay out more than we had paid out the previous year for a top talent. So that impacted us. We did the event in an outdoor arena this year at the Citrus Bowl which was a fantastic event for any of those who saw it or went to it. It was terrific; however, it is expensive to do that sort of production level on an outside -- in an outside arena. That impacted our costs as well. We broadcasted in high definition. That added to the costs. We tried to do some very creative kind of marketing campaigns that cost a little bit more money as well. So it was a variety of factors. We frankly wish we had dropped a bit more to the bottom line. And we will endeavor to do that in the future, but we were overall very pleased with the event.
- Analyst
Okay. Could you also just give me a look at -- there was -- there is a line -- there is an investment securities line in the balance sheet this quarter versus a year ago versus cash and equivalents and investments, is that a reclassification of auction rate securities? Or is there anything, that 33.571 million. What is that?
- COO
That is a reclassification of all of our auction rate securities.
- Analyst
Okay. Okay.
- COO
And the reason for the reclassification is given that the auctions have failed recently, we felt that the conservative approach would be to assume that they would not reset for over 12 months which would cause us to reclassify them as long term.
- Analyst
Got it. The deal -- the new toy deal with Mattel beginning in January '10. Would you want us to anticipate that you -- that you have received an improved royalty rate? Or were there any -- was there anything about that transaction that -- other than the -- other than licensor changing that should enhance value for the shareholders?
- COO
Yes, we improved the economics of the deal?
- CEO
If I may just add to that. The Mattel toy license is going to I think expand our brand not just from the sale of toys and an increase in economic deal, but also an overall branding given their distribution, given their marketing efforts on -- on International basis. And we are providing for Mattel, something that they don't have, which is a real clear boys toy. And reaching a demo that they are not in the market with right now on the kind of basis they want to be. So I think you are going to see such an increase in their marketing and distribution and promotional efforts that it is going to be a win-win on both sides.
- Analyst
Terrific, and -- I know would you be disappointed without this question. So I know your civil suit is progressing in Connecticut. How would you characterize that, and how would you want us to think about the odds of you ever reclaiming your video game rights or having a chance to renegotiate those too?
- CEO
We are still very confident on our case. The -- the issues that we brought we feel strongly about and we stand behind them. The wheels of justice do turn very slowly, but we are gearing up more in Connecticut now, but it's -- it's a couple years out from now before it goes to trial.
- Analyst
Got it. Thanks so much, Linda. Thank you, guys.
- COO
I will just add to Linda's comments because we have talked about SG&A a couple of times that the cost associated with the discovery on the case are now starting to hit the P&L for the first time, and we saw a fairly significant amount in the first quarter.
- Analyst
Got it. Okay, terrific. Thanks so much.
Operator
(OPERATOR INSTRUCTIONS) We will take our next question from the site of Marla Backer from Soleil. Please go ahead.
- Analyst
Thank you. Could you just provide a little bit more color on two of the metrics that you discussed in your presentation. First of all, excluding WrestleMania, the 9% decline in North American attendance. You said -- I think you said that was attributable to the venues and that would -- would -- should we understand that that will correct over the course of the year? What percentage of that, or what impact do you think that economic uncertainty might have played in that decline? And then secondly, the website traffic, have you identified specific changes that you can make to -- to try to improve website traffic and how was that decline affecting your previously pretty aggressive advertising strategy vis-a-vis the website? Thank you.
- CFO
Hi, Marla. This is George. I will take the first one, the question about the North American attendance. 9% decline in the first quarter. Our tour schedule is mapped out not on a calendar basis but over an 18-month basis. Year-over-year you're going to be in different venues and different markets that have different relative strengths. In Q1 '08 that impacted us negatively versus Q1 '07. As I mentioned in my comments, over the full year, we expect North American attendance to be up.
- Analyst
Ex WrestleMania.
- CFO
Ex WrestleMania.
- Analyst
Okay, thanks.
- COO
Then regarding the website traffic, we have been monitoring this very carefully over time and have really been trying to improve the content to match the needs and wants of our passionate fan base. We have come up with as I have mentioned in addition to this ongoing trying to improve kind of the navigation and the look of the -- of the website, which if any of you have looked at I think it really has improved here over the last several months. We have changed a couple of things fundamentally that we think will improve traffic. One is, as I mentioned the adding of this WWE fan nation, this community site that will clearly -- in beta it is clearly driving traffic. I think what that's going to do also is attract traffic away from these lesser-known wrestling-related skies that are sort of existing on -- on our back, if you will. So we are going to go right at them and hopefully divert that -- those viewers and those users back to WWE.com.
Then in addition, we just made some kind of behind-the-scenes mechanical changes to the site in terms of how photo images are loaded, and we have improved that experience. Images are an important traffic driver to the site. And we think with the improvements that we have made, we are already seeing significant increases in traffic back to the levels that we had seen over a year ago. So we think the combination of those factors are such that the traffic will -- will improve over time. It has impacted -- the decline in traffic has impacted to a certain extent our advertising to the website. But we think over time, we will work that through. We are still at levels of nearly 16 million unique visitors which is a very significant number no matter how you compare it.
- Analyst
Thank you.
- CFO
And Marla, just explicitly to address the second part of your question that I didn't around the attendance. As I mentioned we believe the primary driver is the venue mix year-over-year and not an economic issue.
- Analyst
Okay. Thank you.
Operator
We will take our next question from the site of Jeff Martin from Roth Capital Partners. Good morning.
- Analyst
Thanks, good morning. Just curious if you could -- I am calling for Rich Ingrassia by the way. If you can retouch on what platforms were launched Internationally and which territories those were and secondly what the schedule is for platform watches Internationally for the balance of the year. Thanks.
- COO
Right. Well, the -- within the quarter, we had -- some of these things are launched slowly and built over time with the advent of laying in the television platform being the important driver of this. And then followed-up by live events and then followed-up by licensing. That's kind of our playbook here in terms of how we -- not only how we grew domestically but we applied that same playbook Internationally. Spain was a case study that I walked you through earlier. I think that speaks to good -- good progress there. We have expanded -- in China is an important market for us over time, and we have gone from two -- we have taken a provincial kind of a regional approach to China. We are currently in two markets, expanding to four within the quarter and we hope to have six markets out of approximately 30 throughout China. We hope to have -- to be in six markets by the end of the year. And that will -- at that point, we will be attracting. We will be in households of hundreds of millions of viewers in China alone. So there is great opportunity there. And then we continue to focus on other key markets, including India. We are spending a lot of time in India in developing that market. Australia is coming along very nicely for us and we continue to look throughout Europe particularly in the Scandinavian countries and we look to develop more of a presence there during the course of this year. So we are really looking at the globe. We are trying to be very strategic in how we approach these markets. And, again, with the concept of developing a television presence, followed-up by our live event promotion, and then followed up with that with influx of our consumer products businesses.
- Analyst
Okay. So in terms of the live events, where are you specifically with, moving onto the second leg of that strategy, and when will you be in live event mode in some of those markets?
- COO
Right. Overall live events Internationally -- we have added about five more events. Up to 80 events this year versus 75 last year. In the first quarter, we had successful events in Japan. Japan is a market that we are really trying to reinvigorate. We have had a presence there for a number of years but it has been in decline for the last couple of years. We saw a stabilization in Japan with this most recent tour. We also had two live -- two sold-out live events in Chile. And we did some -- some terrific business in Ecuador and in Mexico. Those markets continue to be very important for us. And we were just thrilled with the response that we got in the Latin American countries. I think that bodes very well for us.
In the second quarter, we had our big European tour where we played over 20 dates throughout most of Western Europe to great success. Then we will also be touring through Australia and New Zealand. When you look at the rest of the year, we will be in Spain and in France and then going -- swing back through Latin America, hitting Peru, El Salvador and Chile and then we will also be playing in Austria, Germany, Portugal and France. By the fourth quarter we will hit another big European tour, and then also go into Mexico and South Africa.
The very interesting thing in the -- in this Company is as we set the platform, there is a considerable amount of demand and frankly pressure on the amount of live events that we will do. Right? So it is forcing us to scale this business as best we can. As you are looking into next year, China will be an important market for us and we plan on touring -- we kind of wanted the Summer Olympics to get past us, but looking into next year, there are a lot of beautiful venues now in China that are going to need tenants. So we look forward to doing a tour through China next year. And we think that will also help kind of drive the footprint.
It is very interesting what is going on inside the Company in terms of the allocation of resources relative to the live events that we performed. And we are not forced to maximize those live events. In other words, we may have to -- we may be forced to play -- to eliminate some of the smaller markets that we've been playing domestically in the United States and instead trade those for markets doing shows in International markets that we deem to be more important at this point. So it is a very -- it is frankly a fascinating kind of puzzle as we try to maximize the use of our live events. Hopefully that answers your question.
- Analyst
Wonderful. Appreciate it. Thanks very much.
Operator
(OPERATOR INSTRUCTIONS) A follow-up question from Jamie Clement from Sidoti and Company. Please go ahead.
- Analyst
Hi there. Obviously you had success over the past year with home video. Last year the business was a little lumpy from quarter to quarter based on the launch schedule. Is there anything we should be aware of as this year progresses or it might be a little more evenly spread than last year?
- COO
Yes, it is a good call out. It was particularly soft last third quarter -- last year's third quarter as we pushed a few releases into the out quarters, but we think we have a good slate of releases coming up. In the second quarter, we looked forward to WrestleMania XXIV being released. And we also have -- the big release coming out for The Rock, and we think that will be terrific for us and then we will also be releasing something that is for the Nature Boy Ric Flair. We think we have -- and then as you look toward the rest of the year, we have some very interesting titles in there. So we hope for it to be less lumpy. I will though say, Jamie, fourth quarter is kind of the money quarter for us.
- Analyst
Yes, absolutely, it was more--?
- COO
We are going to sell a lot of videos in the fourth quarter. That is our plan.
- Analyst
Sure.
- COO
The weak quarter I would say is probably the third quarter.
- Analyst
I just wanted to make sure. There was a little bit of a hole in your release schedule for the third quarter of last year so I wanted to -- wanted to make sure we weren't going to get blindsided by anything there. Thank you very much.
Operator
We have no further questions in the queue. I will turn it back over to you for any closing remarks.
- VP, IR, Financial Planning
Thank you very much for joining us today. This is Michael Weitz. If you have any questions, please feel free to call me at 203-352-8642. Again, thank you very much for joining us today.
Operator
This does conclude today's call. You may disconnect at any time, and have a great day.