Colonial Broadcasting Company

1382 Words Jun 10th, 2015 6 Pages
Analysis of the case: “Colonial Broadcasting Company.”

1. Regression Equation from the data is RATING = 13.36 – 0.6483*BBS + 1.397 *ABN
Rating for the respective network is obtained by substituting the values in the above equation as follows

Rating for
ABN
BBS
CBC
Value to be substituted for
ABN
1
0
0

BBS
0
1
0

a. Rank the networks in terms of average ratings for TV movies during 1992:

Rating for ABN = 13.36 – 0.6483*0 + 1.397 *1 = 14.757 Rating for BBS= 13.36 – 0.6483*1 + 1.397 *0 = 12.7117
Rating for CBC=13.36 – 0.6483*0 + 1.397 *0 = 13.36
From the above values
Rank as per Average Rating
Network
1
ABN
2
CBC
3
BBS

b. On average, how much higher are the ratings for the leading network than the ratings for the
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“Previous Ratings” for the new program “Live Rock Concert” =20.

Increase in the Previous ratings due to change of program = 20-17.5=2.5
Impact of this change on Average Rating = 2.5* 0.1862 = 0.4655 increase

6.
a. Warrington fears that a movie with high expected ratings might provoke the other networks to schedule better programming against CBC. Suppose that in response to CBC’s programming, both ABN and BBS schedule different programs, each of which is expected to rate 2 rating points higher. What is the expected impact on the ratings of CBC's TV movie?

The regression equation 5 is

RATING= 12.82+1.899*FACT+0.7406*Stars+0.1862*Previous Ratings-0.2899*Competition-1.046*BBS+1.078*ABN-1.540*Oct+1.398*Dec-1.403*Apr-May+2.523*Mon+1.525*Sun

Average Rating for CBC is given by substituting BBS=0 and ABN=0 in the above equation.

Therefore, Average Rating for CBC = 12.82+1.899*FACT+0.7406*Stars+0.1862*Previous Ratings-0.2899*Competition-1.540*Oct+1.398*Dec-1.403*Apr-May+2.523*Mon+1.525*Sun

If competition (Average of Neilson Ratings of the two competing networks) increases by one, Average Rating for CBC decreases by 0.2899.

It is given that the competition increases by 2. Therefore, Average Rating decreases by 0.5798.

b. Oskar Morgenstern, a CBC network executive, believes that network programming does not affect the size of the total television audience in a given time slot. Instead, he believes that a network's programming only determines the
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