CASE STUDY OF TIME WARNER (LOCATED NEAR END OF TEXT BOOK)

Undergraduate
Assignment
Miscellaneous
Pages 1 (251 words)
Download 0
The case involves a simple question of whether lowering the price of subscription, as a promotional campaign would boost or would further dampen the revenue. Currently, the company receives monthly revenue of $ 8946 per month, a very small amount compared to its subscription revenue of $ 20, 448,000 for the year…

Introduction

Upon looking at the tables given, demand is apparently elastic, with a lot of competitor networks around. One thing that makes a demand elastic is the presence of many substitutes, meaning competitors which can be easily availed by the potential customers. Network competitors include ABC, ESPN and Disney from Disney Company; CBS, MTV and UPN from Viacom and Fox from News Corp.
Given that the promotional decline in price is only given to STARZ's current and future subscribers, and would not affect its big network businesses such as HBO and Showtime, it will be worthwhile to lower the price for the purpose of attracting subscribers. The decline in revenue from existing subscribers is deemed smaller than the potential revenue, given the larger market that it has to cater. Also, the popularity of STARZ, as it would be well advertised given the promotion is also worth the price. Since the current revenue of STARZ is just .5% of the total revenue from subscription (excluding advertisements and content), meaning there are a lot of room to grow in the current market, revenue can double or triple with the promotions.
The revenue growth rate figure for News Corp's Fox News is really admirable, standing at 67.8%, compared to last year. This is superior to CNN's 12.5%. ...
Download paper
Not exactly what you need?

Related papers

Case study Case Study
An order for specific performance of the contract was appropriate because of two reasons: 1) the Wirraway was not at the time in flying condition, and 2) the plane was in a hangar owned by a third party.…
case study
In order to remain competitive and keep strong corporate image, Eurobank creates its culture based on a strong corporate philosophy and unique national values and traditions of the home country.…
AOL Time Warner: Deal of the Century Turns into Disaster of a Lifetime
The deal also had ramifications for television networks, cable networks, and radio networks (Lehrer, 2000).…
Case study
IKEA was not in favour of sourcing raw material and labour from local market. (Developing and positioning the retail proposition in Russia, IKEA in Russia, Coursework, Page 4, para 1 and, Page 6, para 1). (Reference). They recruited local people to handle marketing and sales, leaving senior positions IKEA executives. Setting up independent sales outlets without aligning itself native business…
Aol Time Warner Merger By Nina Munk
During the same year the group's recording and music publishing arm was sold for US$2.6 billion to a consortium led by Edgar Bronfman (former head of Universal), becoming Warner Music.…
CASE STUDY OF TIME WARNER (LOCATED NEAR END OF TEXT BOOK)
Upon looking at the tables given, demand is apparently elastic, with a lot of competitor networks around. One thing that makes a demand elastic is the presence of many substitutes, meaning competitors which can be easily availed by the potential customers. Network competitors include ABC, ESPN and Disney from Disney Company; CBS, MTV and UPN from Viacom and Fox from News Corp.…