Question

In: Finance

How can TV Networks and Broadway plays use revenue management? "Revenue management is an extremely important...

How can TV Networks and Broadway

plays use revenue management?

"Revenue management is an extremely important concept within the hospitality industry, because it allows hotel owners to anticipate demand and optimise availability and pricing, in order to achieve the best possible financial results"

Solutions

Expert Solution

Revenue Management involves analyzing the consumer behavior, managing the orders in an optimized way, billing & invoicing, and revenue recognition in order to maximise revenue growth. I am referring to TV Networks and Broadway Plays as Entertainment and Media in a summarized way as it is difficult to dig too deep in each of the segments.

Digitalization has invariably redefined the global entertainment and media (E&M) ecosystem. Content has become more immersive and available on demand. Digital platforms have increased, creating more direct and personalized distribution. The competition for the number of users and spending has never been more intense. All these developments have significantly affected the flow of E&M revenues. Gone are the days when TV networks, film studios, or companies of any kind could survive on one, two, or even three reliable revenue sources. Today, profitable growth increasingly depends on having five, six, or even more revenue streams. Companies in every E&M sector are launching podcasts, live events, creating subscription offerings, producing video for consumers and brands, and expanding e-commerce and product licensing efforts. TV networks and film studios are developing streaming video services. Sports leagues and video game companies are converting to ee-sports.This has lead to expansion of business, building new revenue streams in new locations. Many successful E&M companies have always benefited from multiple revenue streams: advertising and carriage fees; popcorn and tickets sale for cinema owners; single-copy sales, subscriptions, and advertising for newspaper and magazine publishers.

Building new revenue streams is a challenge and requires making significant changes to the operating model, strategy and culture of these companies.

Following are some of the ways in which a E&M Company can USE Revenue Management.

Pricing Strategy
The core of a revenue management strategy is selling the right product to the right customer at the right time for the right price. Your company may decide to price against your competitors but the most value comes from pricing strategies that closely follow market conditions and demand, especially at a segmented level. A successful pricing strategy and analytical customised pricing tactics, can drastically improve your firm's profitability.

Inventory
In order to increase market share and to overcome weak demands you can lower the prices of products by giving discounts and thus increase your revenue. And where demand is strong for a product, you can overbook and maximizs revenue by utilizing full capacity.

Channels
Different channels often have different costs and margins associated with those channels. When faced with multiple channels to retailers and distributors, revenue management strategies can calculate appropriate levels of discounts for companies to offer without losing integrity with respect to the public perception of quality.

Promotion
Promotions allow companies to sell higher volumes by discounting the price of the products for a short period of time. Revenue management strategies measure customer interest and response to promotions in order to strike a balance between volume growth and profitability. An effective promotion helps maximise revenue when there is uncertainty about the distribution of customer willingness to pay.

Use of Models
Various modelling techniques can be used to forecast future revenue based on different variables that affect the industry. Modelling software helps recognise the impact on revenue in future based on desired strategy. Also use of sensitivity analysis helps to gauge the change in revenue with respect to change in any of the key variables. Forecasting has become key to decide on future scope of business and expansion policies.

Monitoring and Control
A firm shall continuously evaluate the developments of the market and the kind of products, services, prices and processes that needs updation. A dynamic market requires frequent evaluation of the firm's performance, policies and procedures.


Related Solutions

When it comes to analyzing a potential company, cash flow analysis plays an extremely important role...
When it comes to analyzing a potential company, cash flow analysis plays an extremely important role in the analysis. These cash flows can be positive and in many cases such as Tesla be negative hoping that the company will turnaround. A reasonable assessment needs to be done, which involves the all-important cash flow analysis outlined in the chapter. Analysis such as cost, risk are key components just to name a couple areas. What do you feel is one of the...
How can you appropriately use an extremely controversial topic in an analysis?
How can you appropriately use an extremely controversial topic in an analysis?
How can an organization improve its revenue cycle management?
How can an organization improve its revenue cycle management?
why does a hub and spoke networks make the revenue management process more complicated ?
why does a hub and spoke networks make the revenue management process more complicated ?
1.How can companies use social networks internally; that is, by limiting access to employees of the...
1.How can companies use social networks internally; that is, by limiting access to employees of the company?
What is risk and revenue management? How to analyze risk and revenue management of a company...
What is risk and revenue management? How to analyze risk and revenue management of a company by looking into the company financial report?
In business management, how important is it to learn and use statistics and data analysis to...
In business management, how important is it to learn and use statistics and data analysis to analyze trends, patterns, and relationships for making data-driven managerial decisions?
What is the use of simple network management protocol in enterprise networks? Give examples.
What is the use of simple network management protocol in enterprise networks? Give examples.
Why is project management so important in any field? How can project management be applied to...
Why is project management so important in any field? How can project management be applied to implement supply chain strategies? please beware of plagrism
1) Describe what a VLAN is and how it might be important with wireless networks.     ...
1) Describe what a VLAN is and how it might be important with wireless networks.      2) Explain why packet filtering alone is inadequate as the only form of firewall.      3) Describe the role of a DMZ when talking about perimeter firewalls.      4) Describe what a “Proxy Server” is and how it is used with firewalls.      5) Explain the role of a “personal “ firewall on a corporate network where there is a robust perimeter firewall.     ...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT