DBA7180 UnitII
This case study introduces the reader to Personal Video Recorders. The PVR is an interactive digital video recorder used to record and replay television programs received from cable, satellite or local broadcasts. A PVR is a TV recording device that records and plays back television programs. The PVR encodes an incoming video data stream as MPEG-1 or MPEG-2 and stores it on a hard disk within a device that looks much like a VCR. There are options where a consumer can skip through commercials by using a 30-second “auto-skip” function. This capacity is popular with consumers, but not with advertisers (Personal video recorder, 2013)
In this case study I will answer five questions.
Question 1. Discuss how PVRs will affect the demand from advertisers?
Answer: With the increased usage of PVRs, it will result in the decrease of the demand from advertisers. The is primarily because when more people use the PVRs to record say a TV show and skipping commercials, the less viewers that commercials will reach. This in itself makes the commercials less ineffective. Hence, there would be less or even no demand for or even from advertisers.
Question 2. Suppose you are in charge of setting the price for commercial advertisements shown during Enemies, a top network television show. There is a 60 minute slot for the show. However, the running time for the show itself is only 30 minutes. The rest of the time can be sold to other companies to advertise their products or donated for public service announcements. Demand for advertising is given by: Qd = 30 - .0002P + 26V in which Qd = quantity demanded for advertising on the show (minutes), P = the price per minute that you charge for advertising, and V is the number of viewers expected to watch the advertisements (in millions).
This is new territory for me but here goes.
a. All your costs are fixed, and your goal is to maximize the total revenue received from selling advertising. Suppose that the expected number of viewers is one
In this case study I will answer five questions.
Question 1. Discuss how PVRs will affect the demand from advertisers?
Answer: With the increased usage of PVRs, it will result in the decrease of the demand from advertisers. The is primarily because when more people use the PVRs to record say a TV show and skipping commercials, the less viewers that commercials will reach. This in itself makes the commercials less ineffective. Hence, there would be less or even no demand for or even from advertisers.
Question 2. Suppose you are in charge of setting the price for commercial advertisements shown during Enemies, a top network television show. There is a 60 minute slot for the show. However, the running time for the show itself is only 30 minutes. The rest of the time can be sold to other companies to advertise their products or donated for public service announcements. Demand for advertising is given by: Qd = 30 - .0002P + 26V in which Qd = quantity demanded for advertising on the show (minutes), P = the price per minute that you charge for advertising, and V is the number of viewers expected to watch the advertisements (in millions).
This is new territory for me but here goes.
a. All your costs are fixed, and your goal is to maximize the total revenue received from selling advertising. Suppose that the expected number of viewers is one