The Fashion Chanel
HBS CASE: The Fashion Chanel
1. Insights from the consumer and market data : Most of current viewers are females 34-53 years old.
The fashion channel should target 18-34 years old female that is highly valued demographic group, to reach premium CPM (cost per impression, advertising pricing unit).
Both competitors Lifetime and CNN channels were achieving notable ratings.
The clusters that most engage in fashion and most likely to have interest in TFC contents is Fashionistas and planners/shoppers that make up about 50% of all US TV Households (HH) In their specific clusters, the 18-34 female demographic audience represents 50% and 25% of these cluster respectively.
Current source of revenue :
Advertisements sales $230.6 millions
Affiliation fee from cable companies $80 millions
There is need to rethink the existing marketing strategy by reposition to specific segment markets use advertisement as primary growth engine.
2. Expected Outcomes of each targeting scenarios (Exhibit 5)
2006 Actual
2007 Base
Scenario 1
Scenario 2
Scenario 3
Broad-multi segment Single segment Two segments
Revenue
Ad Sales
$230,630,400
$207,567,360
$249,080,832
$322,882,560
$345,945,600
Affiliate Fees
$80,000,000
$81,600,000
$81,600,000
$81,600,000
$81,600,000
Total Revenue
$310,630,400
$289,167,360
$330,680,832
$404,482,560
$427,545,600
Expenses
Cost of Operations
$70,000,000
$72,100,000
$72,100,000
$72,100,000
$72,100,000
Cost of Programming
$55,000,000
$55,000,000
$55,000,000
$70,000,000
$75,000,000
Ad Sales Commissions
$6,918,912
$6,227,020.80
$7,472,424.96
$9,686,476.80
$10,378,368.00
Marketing & Advertising
$45,000,000
60000000
60000000
60000000
60000000
SGA
$40,000,000
$41,200,000
$41,200,000
$41,200,000
$41,200,000
Total Expense
$216,918,912
$234,527,021
$235,772,425
$252,986,477
$258,678,368
Net Income
$93,711,488
1. Insights from the consumer and market data : Most of current viewers are females 34-53 years old.
The fashion channel should target 18-34 years old female that is highly valued demographic group, to reach premium CPM (cost per impression, advertising pricing unit).
Both competitors Lifetime and CNN channels were achieving notable ratings.
The clusters that most engage in fashion and most likely to have interest in TFC contents is Fashionistas and planners/shoppers that make up about 50% of all US TV Households (HH) In their specific clusters, the 18-34 female demographic audience represents 50% and 25% of these cluster respectively.
Current source of revenue :
Advertisements sales $230.6 millions
Affiliation fee from cable companies $80 millions
There is need to rethink the existing marketing strategy by reposition to specific segment markets use advertisement as primary growth engine.
2. Expected Outcomes of each targeting scenarios (Exhibit 5)
2006 Actual
2007 Base
Scenario 1
Scenario 2
Scenario 3
Broad-multi segment Single segment Two segments
Revenue
Ad Sales
$230,630,400
$207,567,360
$249,080,832
$322,882,560
$345,945,600
Affiliate Fees
$80,000,000
$81,600,000
$81,600,000
$81,600,000
$81,600,000
Total Revenue
$310,630,400
$289,167,360
$330,680,832
$404,482,560
$427,545,600
Expenses
Cost of Operations
$70,000,000
$72,100,000
$72,100,000
$72,100,000
$72,100,000
Cost of Programming
$55,000,000
$55,000,000
$55,000,000
$70,000,000
$75,000,000
Ad Sales Commissions
$6,918,912
$6,227,020.80
$7,472,424.96
$9,686,476.80
$10,378,368.00
Marketing & Advertising
$45,000,000
60000000
60000000
60000000
60000000
SGA
$40,000,000
$41,200,000
$41,200,000
$41,200,000
$41,200,000
Total Expense
$216,918,912
$234,527,021
$235,772,425
$252,986,477
$258,678,368
Net Income
$93,711,488