ch15 post eval

ch15 post eval - 3. I believe that HDNet should charge the...

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Andrew Lazarow 1. Based on how resellers are pricing HDNet for their subscribers I would characterize HDNet’s pricing objectives as profit maximization. I believe this because HDNet offers high quality viewing to go along with the high quality television the viewer recently purchased. By using a profit maximization strategy the HDNet will be viewed as a higher quality channel along with being a rare commodity because it is one of a very few number of channels to invest in high definition. 2. The price of HDNet’s programming is greatly affected by the demand and supply trends in the high definition industry. This is why Cuban waited for high definition televisions to drop before pushing his idea of HDNet. There needs to be a high demand in the high definition industry and at the same time there needs to be a high supply of high definition televisions so that the prices are low enough the cause demand to raise even higher.
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Unformatted text preview: 3. I believe that HDNet should charge the carriers $30-$40 per subscription for access to its channels and original programming. HDNet is in the introductory stage of its product life cycle and will have high costs. By charging a high price HDNet will help overcome those costs and still have profits. At the same time because high definition is relatively new, there are a limited number of competitors in the market so entering this new market and obtaining a strong amount of market share should not be challenging. HDNet cannot charge too much though because many of the cable providers will be looking to distribute HDNet in package deals, so if HDNet is too high they will not be able to distribute their product as easily. Pricing HDNet around $30 - $40 would be high enough so that the price would give HDNet the perception of being high quality which is just what they want....
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