Chat with us, powered by LiveChat We recently added the EPIX Movie Channels as part of a new tier of programming for our digital video subscribers. The EPIX channels are sold as an add-on package for $9.75 per month, but we - Wridemy Bestessaypapers

We recently added the EPIX Movie Channels as part of a new tier of programming for our digital video subscribers. The EPIX channels are sold as an add-on package for $9.75 per month, but we

 

Memo 1

To:  Pricing Manager, Tri-State Region

From:  Regional Vice President, Tri-State Region

Re:  Revenue from EPIX

We recently added the EPIX Movie Channels as part of a new tier of programming for our digital video subscribers. The EPIX channels are sold as an add-on package for $9.75 per month, but we would like to potentially increase our revenue from our subscriber base. Currently we have about 15,059 subscribers, generating monthly revenue of $146,823.

Some have suggested we should cut price, as customers tend to be fairly price sensitive for add-on packages. However, in this case, if we lower price for our new subscribers; we really need to cut it to all of our existing subscribers as well. I have some concerns that lowering price will be counter-productive. 

The marketing department calculated some subscription levels at various price points in this region, and I need you to perform the analysis. Specifically, I want you to estimate the price sensitivity of customers at the current price. Please address the following questions: (1) If we lower the price, do you think this is likely to lead to higher revenue, and (2) how much potential revenue can we generate and how low should we go with our price?

Thanks for your help.

EPIX Demand and Cost

Price Number of Subscribers (Thousands) Cost of License Fees (Thousands) Divisional Sales, General and Administrative Costs (Thousands)
$5.00 29.974 $ 134.883 $ 14.50
$5.50 29.256 $ 131.651 $ 14.50
$6.00 17.822 $ 80.199 $ 14.50
$6.50 22.657 $ 101.956 $ 14.50
$7.00 19.897 $ 89.537 $ 14.50
$7.50 16.671 $ 75.017 $ 14.50
$8.00 20.492 $ 92.213 $ 14.50
$8.50 20.000 $ 89.998 $ 14.50
$9.00 19.760 $ 88.920 $ 14.50
$9.50 17.123 $ 77.053 $ 14.50
$10.00 12.644 $ 56.896 $ 14.50
$10.50 12.785 $ 57.531 $ 14.50
$11.00 12.216 $ 54.974 $ 14.50
$11.50 13.246 $ 59.608 $ 14.50
$12.00 8.637 $ 38.867 $ 14.50
$12.50 10.595 $ 47.678 $ 14.50
$13.00 5.857 $ 26.357 $ 14.50
$13.50 2.615 $ 11.768 $ 14.50
$14.00 2.739 $ 12.326 $ 14.50
$14.50 5.291 $ 23.809 $ 14.50
$15.00 3.051 $ 13.730 $ 14.50

Estimates of market penetration in the Tri-State Region based on different price levels. License fees represent the fees that we must pay to Epix for the rights to re-transmit their channels. Fees are based on the number of subscribers.

Our website has a team of professional writers who can help you write any of your homework. They will write your papers from scratch. We also have a team of editors just to make sure all papers are of HIGH QUALITY & PLAGIARISM FREE. To make an Order you only need to click Ask A Question and we will direct you to our Order Page at WriteDemy. Then fill Our Order Form with all your assignment instructions. Select your deadline and pay for your paper. You will get it few hours before your set deadline.

Fill in all the assignment paper details that are required in the order form with the standard information being the page count, deadline, academic level and type of paper. It is advisable to have this information at hand so that you can quickly fill in the necessary information needed in the form for the essay writer to be immediately assigned to your writing project. Make payment for the custom essay order to enable us to assign a suitable writer to your order. Payments are made through Paypal on a secured billing page. Finally, sit back and relax.

Do you need an answer to this or any other questions?