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Case Study Analysis: the Fashion Channel

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Case Study Analysis: The Fashion Channel
Introduction:

“The Fashion Channel” which is a successful cable TV network and which had been started by two entrepreneurs in 1996, with up to date and entertainment features and information broadcast 24×7 which was related to fashion only.
The channel was actually dedicated to fashion only and its main audience were women of 35-54 age group. Earlier TFC’s tagline was “Fashion for Everyone” In 2006 TFC has earned the revenue of $310.6 Mn out of which their target was to earn a profit of $230 Mn only through advertisement. Till 2006 TFC was the market leader in fashion related programs and one of its more popular series in 2005 had been “Look Great on Saturday Night for Under $100.
In 2006 TFC has realized that some of the other channels like CNN and Lifetime are following the footsteps of TFC and also they are telecasting the programs related to the fashion world, which were now started to become more popular in comparison to the programs of TFC. These channels were giving competition to the TFC directly by taking the share of its ad revenue; these channels were giving a double edged competition to TFC.
Norm Frazier, senior vice president of advertising sale, advised that in order to increase the TFC’s ad revenues either TFC has to decrease its ad pricing by 10% or to increase its viewership by improving the quality n contents of the programs.
There were around 110 Mn households in USA with cable network and TFC’s average rating was around 1.0, this meant that on average 1,100,000 people were watching at any point in time. Advertising slots were divided in two slots i.e. of 30 seconds and 60 seconds and There were usually six minutes of national ad time in each half hour of programming, 24 hours per day for a total of 2,016 minutes per week. The network based ad unit prices on several factors, which advertisers also...

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