Reference no: EM133263433

Case: The streaming market is currently very crowded with major players like Netflix, Disney, and HBO operating in it. Because of the high number of streaming options available, a number of consumers have moved away from traditional cable TV packages. This has resulted in loss of revenue for smaller TV channels who otherwise would provide desirable content.

Cardinal TV is one such channel that excels in Louisville Cardinal athletics programming. Cardinal TV, however, has seen declining revenue for the last five years. Cardinal TV believes that while their content is very desirable, they have lost revenue because they are currently available only via declining traditional cable TV packages. Cardinal TV, however, does not believe they have the financial ability to compete with industry behemoths such as Netflix.

Cardinal TV hired a consultant to explore streaming opportunities. This consulting company advised Cardinal TV that they could build a niche streaming option for their service and would be a desirable option for consumers in addition to the traditional streaming service. The core logic behind this advice is that consumers had budgeted a much higher amount for their traditional television services than what they are paying for streaming services. Therefore, consumers are willing to add a niche streaming service. Such a niche service would not compete, but rather complement traditional services such as Netflix.

Before they invest, Cardinal TV would like you to test this strategy. Cardinal TV purchased data to aid you with this testing. Dataset streaming.xlsx shows how much money consumers have budgeted for their internet and television (including streaming) services per month. Cardinal TV has asked you to use a 90% confidence level. Please note that you may get an error message downloading the data if you are using Internet explorer. IE browser currently has compatibility issues with Blackboard. Please use Firefox or Chrome.

Using Excel, your goal is to:

Question 1: Determine the mean, sample size, and the standard deviation of this sample. (Hint: use "stdev" function for standard deviation).

Question 2: While Cardinal TV makes their decision making using a 90% confidence, they would like to include as many customers as possible in their confidence interval. Therefore they have asked you to determine a 99% confidence interval estimate for this sample. (Hint: use the "confidence" function; You may also use distribution calculation spreadsheet you used in prework and was again used here in this week's readings. Be careful, there are multiple confidence functions in excel that have different assumptions associated with it).

Question 3: Assume a typical customer spends $100 on their internet service. They also get the most expensive "monthly" package for Netflix (e.g., Netflix premium), HBO max, and Disney+ (solo and not the bundle; no ad-supported version). Do you think the consumers could potentially add a Cardinal TV subscription as well if it was priced at $4.99 a month? Use a 90% confidence level. You have to Google the current pricing for these streaming services as they may have changed since Cardinal TV tasked you with this job. Explain your thought process how you approached this problem. Also list any assumption you made. This is important because your client-i.e., Cardinal TV-may not have specified all the characteristics of the project and you had to make some assumptions to fill-in the gaps.

Attachment:- Streaming budget.rar