Fashion Channel Case Study

1.What insights do you get from the consumer and market data?

TFC:

• TFC was a very popular networks with 80 million households subscribed to cable and satellite TV.

• It’s main viewers is women between 35~54 yrs old.

• Year before 2006 “something for everyone” approach turned out to be success. But, since the two main competitors have took away the advertising income, the head quarter were concentrate on maintain the highly success income momentous even have to drop the price for advertising.

Customer:

• TFC highly valued young women between 18~34.

• Mainly divided into four segments: Fashionistas 15%, Planners&shoppers 35%, Situationalists 30%, Basics 20%(Exhibit3).

• Viewers watching fashion programs for entertaining more than daily dress indicating.(Exhibit2)

Competitors:

• Lifetime and CNN are TFC’s main competitors. TFC’s average rating is 1.0 while lifetime and CNN’s average rating at 3.0 and 4.0 perspectively. TFC’s average Households is 1.1M, Lifetime 3.3M and CNN 4.4M.(Exhibit 1).

• These information listed in the Exhibit 1 shows that compare to TFC, Lifetime in emphasized on attracting younger female and CNN is starting to deliver some dread numbers on men.

• As the cable affiliate fee is the current lowest price in network industry range and besides the strong strength in competition, the two keys to drive revenue froth would be 1).increased viewership(rating) and 2). Increase advertising price.

2. What is the expected outcome of each of the targeting scenarios? (complete both the ad revenue and financial calculators to fully understand the financial impact of the scenarios)

ITEMS SCENARIOS

Women 18-34 yrs old Fashionistas Fashionistas/ shoppers &planners

TV HH 110000000 110000000 110000000

Average rating 1.2 0.8 1.2

Average viewers 1320 880 1320

Average CPM 1.8 3.5 2.5

Average Revenue/minute 2376 3080 3300

Weeks/year 2016 2016 2016

Ad revenue/year 52 52 52

Ad Sales 249080832 322882560 345945600

Affiliate Fees 81600000 81600000 81600000

Total revenue 330680832 404482560 427545600

Cost of operations 72100000 72100000 72100000

Cost