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Economies of Scale example: TV PROGRAM INCOME Audience size Advg revenue / year Profit 500,000 $ 8 million -$2 mil - PowerPoint PPT Presentation


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Economies of Scale example: TV PROGRAM INCOME Audience size Advg revenue / year Profit 500,000 $ 8 million -$2 million 100,000,000 $ 15 million $5 million 200,000,000 $ 28 million $18 million 400,000,000 $ 45 million $35 million 800,000,000 $ 85 million $75 million

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Economies of scale example tv program income audience size advg revenue

Economies of Scale example:

TV PROGRAM INCOME

Audience size Advg revenue / year Profit 500,000 $ 8 million -$2 million

100,000,000 $ 15 million $5 million

200,000,000 $ 28 million $18 million

400,000,000 $ 45 million $35 million

800,000,000 $ 85 million $75 million

The TV show costs $10 million to make regardless of its audience size.So the larger the audience, the more efficient a show is to produce.


Economies of scale example tv program income audience size advg revenue

Television Sandwich

Commercials

Programming

The audience’s sandwich

TV Executive’s sandwich


Economies of scale example tv program income audience size advg revenue

What percentage of revenue comes from advertising and marketing?

100% TV

80% newspapers

60% magazines