LET'S SOLVE A
CONSULTING CASE
problem statement
Your client is Company X. They
have been approached to bid
for the next season of
MasterChef India. They want
your help to decide how to
make most money out of the
release and the correct
bidding strategy.
Interview thread
Interviewee: Before jumping to the analysis, I
would like to clarify a few things about the
client and the problem at hand. Could you
please help me out with more details about
the client's business, whether it is an OTT
platform or are we looking at television
screening, and where they are planning to
stream?
Interviewer: Sure, your client is a company
like Jio Cinema or Disney+ Hotstar and for this
case we will be concentrating on television
streaming even though the client does both
and they are bidding for streaming in India
Interviewee: Thank you, I would also like to
know the regulations behind bidding, is it open
or closed, and which country's MasterChef is it,
India/Australia? Also, do we have any history of
bidding for previous seasons of the MasterChef?
Interviewer: Series? Good question, it's a closed
bidding and for MasterChef India. The client
particularly does not have a history for bidding
for MasterChef but there is a rumour that
previous season was bid for about 90 crores.
Interviewee: Great, so I'll be performing a cost
benefit analysis to understand the financial
feasibility for the client since the objective is to
make money.
Interviewer: Sure, Go ahead!
Interviewee: Comparing the Revenues
generated, and the Costs incurred by the client
will help us through the problem. Starting with
the revenues, we will have two revenue
segments, TV and OTT and since we are
concentrating on Television part, there shall be
multiple revenue streams like subscription fee,
advertisements and so on.
Interviewer: Sure, Will there be any more
revenue streams?
Interviewee: Yes, since it's a food show, there
shall be revenue from sponsorships, promotions
and merchandise as well.
Interviewer: Great, so let's focus on revenues
generated by advertisements.
Interviewee: The revenue for advertisements can
be calculated as below - Revenue = Revenue/ad
slots * #ad slots/episode * #ads/ad slots *
Number of episodes. Do we have any data on
these figures?
Interviewer: Yes, we do have that data. There is
a charge of 5 lacs/ad and there is around 20
minutes of ad time with each ad being 30
seconds long. Also, there are 50 episodes in this
season of MasterChef India.
Interviewee: Alright, so we have 40 ads/episode.
Total ads will be 2000 for 50 episodes. Total
revenue will be about 100 crores (2000 ads X 5
lacs/ad) from primary advertisement revenue.
Apart from this we shall also have another
component in advertisement revenue. This shall
be from the advertisements running during the
repeat telecasts.
Interviewer: Right, so what else do you need from my
side?
Interviewee: Since the repeat telecasts happen at
non-peak hours unlike the actual streaming, the
revenue charged per advertisement will be
drastically lower than 5 lacs per advertisement.
Interviewer: Let's say we come to a number, how will
you go forward? Summarise.
Interviewee: I would like to compare the final revenue
amount to the costs that we shall be incurring like
airing cost, operational cost, maintenance and
bidding cost, keeping in mind the cost of capital for
the costs incurred. Further, I would be comparing the
range of bid to the historical trend and zone down to
the final value keeping in mind profit objective of the
client.
Interviewer: Let's close the case here. Thank you!
That's A wrap!
framework
REVENUE
TELEVISION OTT OTHER
SPONSORSHIPS PROMOTIONS MERCHANDISE
SUBSCRIPTION FEE ADVERTISEMENTS
REVENUE/ AD SLOT #AD SLOTS/ EP #ADS/AD SLOT #EPISODES
COST
AIRING OPERATIONAL COST OF MAINTENANCE BIDDING
CAPITAL
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