The Fashion Channel

Case Activity: The Fashion Channel
1) What does Wheeler imply by “Deliver quality audiences, as demanded by advertisers” (p. 5)? Why is this important to TFC? ‘Deliver quality audiences, as demanded by advertisers’ means increasing viewership (rating). Moreover, increasing the audience quality, attracting more audiences who have the ability and possibility to buy the product advertised in TFC. From the Exhibit 5 we can see, FTC sales revenue comes from two sources, ad sales and affiliate fees. The more audience subscribe their channel the more viewership, the more probability they buy the product advertised on TV. If the TFC can reach the tight audience, they can get more advertisers, therefore, increase the advertising revenue. There are usually 6 minutes in every 30 minutes program, the time of the advertisement can be regarded as fixed, if the TFC raise the advertising price, the more revenue that can get. However the competition for ad revenue are always fierce as there are a numbers of networks, TFC cannot increase the advertising price by no reasons unless the audiences have the ability and possibility to buy the product. If the FTC’s audiences are likely to buy the advertising product in the future, the TFC could negotiate with the advertisers, and raise the fee somehow. TFC’s Ad Sales team usually sell the advertising spots to a variety of well-know cosmetics companies, clothing designers and automobile manufacturing, the quality audience then will be the female between 18 and 54, and some males with spending power. From the Exhibit 1 we can see, the average rating for TFC is quit low, only 1.0 compared with Lifetime (3.0) and CNN (4.0). The senior vice president of Ad Sales also mention TFC have to decrease the advertising fee by 10% until the can change the audience type. In addition, the contract with large multi-system operators(MSO) illustrates TFC only charge household which can receive their channel. Although the TFC affiliate fee is lower than the...