Pvr Case Study Essay

986 Words Jun 21st, 2011 4 Pages
Unit II Case Study Instructions 1. Discuss how PVRs will affect the demand from advertisers.

In order to examine the effect that PVR has on advertising companies, we need to consider the needs of society and how will it benefit from this video recorder.
Comfort is an important issue in today’s society. The easy programming and the large video recording space, which reaches up to 60 hours, makes this devise very desirable. Moreover, the flexibility to play the recorded program repeatedly at the viewers’ most convenient time removes the need to schedule your day based on the programs.
Advertising Companies depend on programs to promote products or services based on the client. However, because of PVR the viewer is capable of
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Suppose that the expected number of viewers is one million people. What price should you charge? How many minutes of advertising will you sell? What is total revenue? b) Suppose price is held constant at the value from part (a). What will happen to the quantity demanded if due to PVRs the number of expected viewers falls to 0.5 million? Calculate the “viewer elasticity” based on the two points. Explain in words what this value means.

3. As more viewers begin using PVRs, what happens to the revenues of the major networks (CBS, NBC, ABC, and FOX)?

Networks such as CBS, NBC, ABC, and FOX obtain most of their revenue through advertisements. The popularity of the network defines the how reliable they are. However, with the increase usage of PVR in every household, networks such as ABC, CBS and NBC filed a lawsuit against SonicBlue, maker of the ReplayTV personal video recorder. Their argument was that the latest version of the ReplayTV device would remove them of revenue and reduce their incentive to create programming.

Reuters, Dish and EchoStar Settle Patent Dispute With TiVo, May 2, 2011, The New York Times

4. Discuss the long-run effects if a significant proportion of the viewers begin adopting these “advertising snipping” systems.

Considering all the benefits that PVR has given to the viewer, it is understandable that the affect that this device will have on them can be considered to be positive as well as negative.
To begin with there

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