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The Fashion Channel Case Study

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The Fashion Channel Case Study
Knowledge and Marketing Management Seminar
The Fashion Channel Case Study: Friday, 18 October

Please read and analyze this case on market segmentation and targeting options for a cable television network dedicated to fashion programming. No research into the industry or firm is necessary. Please use only the information provided by the case.

Each team should complete Exhibit #4 “Ad Revenue Calculator” and Exhibit #5 “Estimated Financials for 2006 and 2007” and submit a copy of their team’s work at the beginning of class. A spreadsheet is provided to help you with this assignment.

Exhibit 4: Ad Revenue Calculator

Ad Revenue Calculator

Current
2007 Base
Scenario 1
Scenario 2
Scenario 3
TV HH
110.000.000
110.000.000
110.000.000
110.000.000
110.000.000
Average Rating
1,0%
1,0%
1,2%
0,8%
1,2%
Average Viewers (Thousand)
1100
1100
1320
880
1320
Average CPM*
$2,00
$ 1,8
$ 1,8
$ 3,5
$ 2,5
Average Revenue/Ad Minute**
$2.200
$1.980
$2.376
$3.080
$3.300
Ad Minutes/Week
2016
2016
2016
2016
2016
Weeks/Year
52
52
52
52
52
Ad Revenue/Year
$230.630.400
$207.567.360
$249.080.832
$322.882.560
$345.945.600
Incremental Programming Expense

$ -
$ -
$ 15.000.000
$ 20.000.000

* Revenue/Thousand Viewers

** Calculated by multiplying Average Viewers by Average CPM

2006 Actual
2007 Base
Scenario 1
Scenario 2
Scenario 3
Assumptions
Exhibit 5: Financials

Revenue

Ad Sales
$230.630.400
$ 207.567.360
$ 249.080.832
$ 322.882.560
$ 345.945.600
Insert scenario results from revenue calculator
Affiliate Fees
$80.000.000
$81.600.000
$81.600.000
$81.600.000
$81.600.000
Grows 2% per year with population
Total Revenue
$310.630.400
$289.167.360
$330.680.832
$404.482.560
$427.545.600

Expenses
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