World Wrestling Entertainment (NYSE: WWE) had a strong fourth quarter, reporting a 17% year-over-year rise in revenue to $194.9 million.

That contributed to a full-year revenue increase of 11% to $729.2 million, the highest in the company's history. The company reported record revenue in its Network, Television, Live Event, Venue Merchandise, and WWE Shop segments. It also saw the average number of subscribers to WWE Network rise by 14% in Q4 to 1.41 million over the same period a year ago.

For the quarter, WWE reported net income of $8 million, or $0.10 per share, compared to a net loss of $1.2 million, or a $0.02 loss per share, in the prior year's Q4. Operating income also increased to $13.9 million from an operating loss of $1.5 million.

"During the past year, we continued to successfully execute our content strategy, which resulted in significant operational achievements and generated record revenue." said CEO Vince McMahon. "...The increased engagement with our brands across multiple platforms provides a foundation for achieving our 2017 and long-term financial objectives."

Has WWE turned a corner?

While WWE Network's subscriber numbers remain somewhat disappointing, the company has reached the level where it has replaced the pay-per-view (PPV) revenue it mostly sacrificed to launch the streaming service. The network gives the company more stability, as PPV numbers could vary greatly. Going forward, if it can add new subscribers, that revenue becomes largely profit, as expenses barely increase on a per-user basis.

WWE has not gotten all the way there yet, but it has shown that its strategy makes sense. In addition, the network also provides the company with a platform that offers it a hedge against not being able to find a home for any programming that currently airs on television. It's hard to know what moving one of those shows off cable would cost the company in rights versus what it might gain through added subscribers, but it could eventually be a viable option and that could give the company leverage in negotiating deals going forward.

What happens next?

For the first quarter of 2017, the company projects operating income of $16 million to $20 million and average paid subscribers to WWE Network of 1.48 million. That's a 15% year-over-year increase from Q1 2016 for the network and a sequential quarter increase of 5% from Q4 2016. In addition, full-year 2017 revenue should rise due to contractual increases in the fees it is paid for broadcast rights for its television programming around the world.

Going forward, the big challenge for the company will be growing the network. That's its easiest path to more profits, and its global audience, social media engagement, and international fan base suggests that it has significant room to grow.

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Daniel Kline owns shares of World Wrestling Entertainment.