Tag Archives: television

Pricing in the Entertainment Streaming Industry

The entertainment streaming industry is on fire right now. Apple, Hulu, Netflix, Disney, HBO, and more brands are ramping up to fight it out for the monthly consumer subscription!

Here is how the current prices compare between services:

Service Monthly cost Shows
Netflix $12.99 Stranger Things
Hulu $11.99 (ad free), or

$5.99 (with ads)

Handmaid’s Tale
Amazon Prime Video $8.99 Marvelous Mrs. Maisel
Apple TV+ $4.99 The Morning Show
Disney+ $6.99 The Simpsons
HBO Max $14.99 Friends

 

Notice anything interesting in the prices? How each price ends? Which vendor is using penetration pricing? Or below-competition pricing? Name a price model and it’s probably on the list above. Blockbusters, as well as all-new created movies and shows are all offered from multiple services and it can be hard to determine which has which. The marketing focus should be on differentiation – the services are starting to sound alike, and be priced alike.

There has been a dramatic shift in recent years about how consumers get their information and entertainment, and how many more consumers use streaming services each year. The average consumer in 2019 has 2.6 stacked services. This is up from 1.6 stacked services in 2016, but far short of the projected 4.9 staked streaming services by 2023.

Think about it… how many services are currently in your household?

Group Activities and Discussion Questions:

  1. Poll students: How many subscription services does each household have today? Add them and average it for the class.
  2. Show a video about the topic: https://www.wsj.com/video/video-streaming-services-battle-for-subscribers/AED37E41-E1EC-447A-A47F-C55D1834B7E0.html
  3. Pricing is usually a complex topic. Discuss the six steps for pricing (determining objectives, estimating demand, determining cost/profit relationships, select price level, set list price, and make adjustments).
  4. Discuss the various pricing models in class: demand-oriented, cost-oriented, profit-oriented, and competition-oriented.
  5. For these streaming services, divide students into groups and have each group work on setting the price level.
  6. Assign each team a different model to use (demand-oriented, cost- oriented, profit-oriented, and competitor-oriented) and have the team explain how the model was used when setting their price.
  7. Compare the various pricing models and discuss advantages/disadvantages of each.

Source: FitzGerald, D., & Flint, J. (29 October 2019). AT&T lays out price, show line-up for HBO. Wall Street Journal; other news sources

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53rd Super Bowl (2019)

The Super Bowl has become one of the premier venues for marketers. The thrills, the chills, the excitement and surprises – and that’s just the advertisements! At a cost of $5 million for 30 seconds of air time, the Super Bowl is also the most expensive advertising placement of any event or show. Add the costs of designing and producing ads, plus the integration into other marketing tactics, and a company can easily spend upwards of $6 million at a single event.

Love them or hate them, Super Bowl advertisements have become a talking point during and after the game. It’s a big stage, and can also be a big risk. This year it had an audience of 98.2 million viewers and a 41.1 U.S. household rating in 49.3 million homes. While still large, this was the lowest viewing in 10 years. However, days later we are still watching ads, arguing about them, and measuring results.

Watch the ads – which ad is your favorite?

Group Activities and Discussion Questions:

  1. Bring up one of the Web sites that have all the Super Bowl ads: https://www.ispot.tv/events/2019-super-bowl-commercials
  2. Divide students into teams. Have each team select a Super Bowl ad to analyze and present in class.
  3. What is the target market, key message, and offer from the ad?
  4. How does the ad integrate with a company’s other advertisements?
  5. Are the messages integrated with a company’s Web site and social media?
  6. As a class, after each commercial have students assign one to five stars for the advertisements. Which advertisement won the class vote?

Source:  Ad Week, CBS, iSpot.tv, Nielsen, other news sources

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Super Bowl 2018 Advertising

With hundreds of millions of viewers worldwide, the Super Bowl has become one of the premier venues for marketers. The thrills, the chills, the laughter, the tears – and that’s just the advertisements! At a cost of $5 million for 30 seconds of air time, the Super Bowl is also the most expensive advertising placement of any event or show. Add the costs of designing and producing ads, plus the integration into other marketing tactics, and a company can easily spend upwards of $6 million at a single event.

Love them or hate them, Super Bowl advertisements have become a talking point during and after the game. It’s a big stage, and can also be a big risk. With an audience of 103 million viewers, the 52nd Super Bowl is one of the most watched TV program in U.S. history. And, days later, we are still watching ads, arguing about them, and measuring results.

Watch the ads – which ad is your favorite?

Group Activities and Discussion Questions:

  1. Bring up one of the Web sites that have all the Super Bowl ads: http://admeter.usatoday.com/results/2018
  2. Divide the students into teams.  Have each team select a Super Bowl ad to analyze and present in class.
  3. What is the target market, key message, and offer from the ad?
  4. How does the ad integrate with a company’s other advertisements?
  5. Are the messages integrated with a company’s Web site and social media?
  6. As a class, after each commercial have students assign one to five stars for the advertisements. Which advertisement won the class vote?

Source:  Ad Age Daily, Brandchannel.com, USA Today, other news sources

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