Structuring Revenue and Cost Management: Evidence from the Broadcasting Industry
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چکیده
This study examines revenue management in terms of a framework adapted from Maguire and Rouse (2004). This framework is used to analyse the way revenue management is organised at a large broadcasting organisation. The aim of this analysis is to investigate the structuring of the revenue and cost management efforts. When selling a product or service revenue and cost are usually known and hence the profit margin can be calculated. This suggests that under normal conditions revenue and cost management efforts would be combined. However in the case of the broadcaster, direct interaction between the two is limited to conveying ratings information, commissioning opportunities, and special event analysis. The lack of more direct interaction could partially be due to an implicit link provided by viewer demographic ratings. The programming function strives to maximise these ratings and then the revenue management areas use them to segment the market and maximise the revenues earned. This is consistent with the fact that when the sales team sells the advertising airtime the costs incurred in providing the capacity to do so is already sunk. Thus the performance of the revenue and cost management efforts are better measured in isolation to determine how they individually contribute to the organisations profitability.
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