As I write this, stations we work with are running open in Prime. This trend isn't novel, having manifested itself since the onset of the pandemic. It's imperative to grasp the extent of this decline to adeptly navigate our pricing strategy in the times ahead. Although 2024 in specific markets holds promise with additional political demand, capable of plugging some gaps, a contingency plan is essential if this political demand fails to materialize, maximizing revenue amid a diminishing daypart.
Effective pricing is the cornerstone of a successful broadcasting business. In this regard, ShareBuilders' Holding Capacity model emerges as an invaluable tool for understanding the present and shaping the future of your revenue streams. At its core, this model offers insights into what your equitable share of revenue should be for a specific quarter or even an entire year. However, delving deeper into its intricacies can grant you a distinct competitive edge, enabling you to discern precisely where you wield pricing power and where it may be more limited. Guided by a dedicated ShareBuilders consultant, you can navigate this model to your advantage.
With the recent announcement of the CW Network airing 50 Atlantic Coast Conference (ACC) football and basketball games, the amount of live sports inventory increased substantially. Some would argue that there is a glut of inventory, hence a buyers' market. But as money continues to move out of Prime and into other dayparts, pricing your live sports becomes more of a priority as the competition for dollars will increase.
Recently I underwent a medical procedure that required an extended period of rehabilitation and recovery. Suffice it to say, during that time, I watched a ton of local television. I was sequestered in a medium-sized market in Iowa and arrived at these three observations from my viewing in May.
Different types of demand require different pricing strategies. Inelastic demand refers to a situation where a change in price has a relatively small impact on the quantity of a product or service demanded by buyers. In other words, buyers aren’t price sensitive.
As we shared in last month’s blog, when prices fall, demand generally increases. When a station uses the strategy of “pricing for share” it involves lowering the price in an effort to make the station’s inventory more attractive to buyers, thus encouraging them to buy more. Having one advertiser “buy more inventory” might be good in a specific instance, but if this strategy is utilized universally with every advertiser, it can lead to problems. Here are a few points to consider:
With the Tokyo Olympics just around the corner, we wanted to share data and observations from our client stations. The data presented represents an analysis of Summer Olympics and the revenue impact to NBC and non-NBC stations, based on ShareBuilders data from 2002-2020.