We recently added the STARZ Network to our premium cable tier.

Currently, 852 of our basic service su

bscribers purchase this service.

At the current price of $10.50, our

revenues from this new channel are

$8,946 per month.

As you know, our penetration rate for STARZ is not as high as we

expected. Compared with the other

two pay services we offer (HBO

and Showtime), the number of subscribers for STARZ is still rather low.

Some of our customers have indica

ted that the main reason they

haven’t signed up is the price.

To boost revenues, I am thinking

that we might want to offer a

promotional price for STARZ starting in

July. Since this offer will be part

of our summer promotion plan and will be well publicized, the same

deal has to be offered to our existing subscribers as well. My concern

is that the additional subscriptions generated by the lower price may

not fully offset the revenues lost from

our existing base of subscribers.

The marketing department provided the attached data on the demand

and costs for this channel in our Region 1 service area. Please

evaluate our current pricing strategy for STARZ based on these data.

I am particularly interested (1) in whether lowering the price will yield

higher revenues, and (2) in an estimate of the maximum monthly

revenues we can achieve through this channel.

SophiaPretty

(5)

Status NEW Posted 07 Aug 2017 09:08 AM My Price 5.00

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