Case Study on Fashion Network

Paper Type:  Case study
Pages:  6
Wordcount:  1398 Words
Date:  2023-05-01


This is a case study of The Fashion Network, a cable TV network that was founded in 1996 and whose shows were exclusively dedicated to fashion. It offered its viewers up-to-date features, information and entertaining that were broadcast all day and night, every day of the week. Since it was set up in 1996, TFC was one of the most widely available networks in the fashion niche, with a viewership of the about 80 million U.S. households that had cable and satellite television subscriptions. It had enjoyed constant revenue and profit growth that was higher than the industry average almost from the time it started broadcasting.

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According to its annual demographic survey, the network was most popular with women between the ages of 35 and 54 years. Right from the start, TFCs marketing strategy did not target any specific demographic, instead preferring to achieve the highest possible viewership numbers, opting to appeal to the broadest audience possible. The channel did not gather much data about its viewers, nor did it target any particular viewer segments in its marketing. The theme for its marketing programs was "Fashion for Everyone." One of its more popular campaigns in 2005 had been "Look Great on Saturday Night for Under $100."

Main Problem

This all changed in 2006 when other networks noticed the success that TFC was enjoying and started including fashion-related shows in their program line-ups. That was when its founder, Jared Thomas, decided to rethink his marketing approach. He told his senior team that it was time for them to put together a brand strategy that was in tune with the times in order for them to secure the position TFC had built over the years as the market leader, but the urge to resist change was strong for them since they didn't really see any need to change their past winning ways.

Revenue Streams


The network's main product was advertisement slots, where they sought to optimize revenue by looking into the demographics that they attracted with their programming. The cost per ad unit varied on several factors like ratings, i.e. the number of viewers as a percentage of the total viewership on the carrier network at any moment, the audience's characteristics, like demographics, age, and lifestyle, and the prevailing competitive trends. Advertisers paid for impressions, calculated by CPM, i.e. the cost per thousand viewers' "moment" of viewing. Traditional television channels also provided a fairly fixed supply of advertising. With market prices shifting up and down, advertisers designed some of their campaigns to specifically cater for the more stable traditional television medium. Agencies employed survey data combined with the output of recently developed "optimizer" programs that were fed complex metrics to further analyze the demographics and psychographic tendencies of audience groups when establishing the parameters to use in setting ad pricing for the networks' audiences. These programs would produce output that recommended ad placement portfolio for specific product campaigns. A network's ad worth was increasingly evaluated on its ability to deliver the specific target audience groups that were targeted by the different advertisers. The general outcome was that networks with older or lower-income audiences were paid lower rates for advertising. On the other hand, there were highly sought-after audience groups who advertisers paid a premium to access. Like in 2006, the mix of this higher-worth audience included men of all ages, and women aged between the ages of 18 and 34. The TFC team's strategy was aimed at acquiring these highly valued groups so they could raise their CPM pricing by between 25% and 75%. TFC saw the opportunity in attracting and maintaining a large number of these highly-valued viewers as the way to grow its advertising revenues.

Cable Affiliate Fees

The second revenue stream for TFC was the cable affiliate fees. In 2006, these were expected to bring in around $80 million. Cable television consumers bought subscriptions from local affiliates of larger, national cable multi-system operators. There were regular monthly subscriptions, which gave them access to a lineup of basic channels, like TFC, and then there were more expensive premium channels and on-demand services. TFC earned an average of about $1 per subscription per year, which was paid wholly on carriage basis and did not fluctuate depending on viewership. This fee was quite low, reflective of their specialty niche content, compared to other networks whose content appealed to larger audiences.

Maintaining their position in the affiliates' basic package was also dependent on viewer satisfaction, complicating their strategy of interrupting their current program lineups to use the best time spots for content targeting the audiences that attracted the highest possible ad fees. There had been cases of viewers causing an outcry in reaction to unpopular changes, and affiliates were duty-bound to protect their markets. Still, there was need for balance if they were to save and optimize their primary revenue stream, advertising.

Competitive Threats

In a then fresh Alpha Research study on customer satisfaction TFC had scored a 3.8 rating out of a possible 5, while CNN and Lifetime had achieved 4.3 and 4.5 respectively. Scores on other metrics yielded a similar picture. Cable operators used these to structure their service packages, usually in tiers, and there was a risk of TFC being bundled in less-appealing lower tier levels there their viewership would reduce. They were, however, well above the half mark, trailing two market leaders that had caught up with their niche.



TFC was well-established in their niche, having entered the market early and gained the trust and loyalty of their customers. They had predictable, well-established revenue streams in both advertising and cable fees. They also had strong visionary leadership that recognized the need for change and made the decision to bring in a fresh pair of eyes.


Their initial marketing approach that seemed to have served them well so far had now been their undoing. They did not define their target market early and well enough to be competitive in a changing world.


Their growth prospects are good in the unique, yet-untapped segments that Dana identified, fashionistas and planners & shoppers. These segments were made up of individuals in the high value 18-34 female segment. Targeting them would help deliver the ratings they needed to raise ad revenue. There was a long-term opportunity in attracting and retaining this segment.


The most direct threat comes from the fierce competition they were receiving from CNN and Lifetime. This had already eaten into their demographic and even stepped ahead in viewer satisfaction, and other vital ratings. Dana predicted that there would be some degree of customer outcry if they effected the disruptions that she needed to effect to make room for her target market. Affiliates and cable television providers posed a threat, but only if her customer satisfaction ratings kept dipping. A well-targeted campaign was also going to take some time to effect and she needed to start as soon as she could.


Dana was convinced that women in the 18-34 age group would be most interested in the network's programs. This age group was present in all clusters, so there was the option of maintaining a broad appeal across the segments. Investing in a major marketing and

advertising campaign could yield her predicted boost of a 20% increase in ratings. This however meant that ad sales would possibly experience a 10% drop in CPM to $1.8 if they retained the current audience mix. The competition was another factor as they could continue penetrating the premium segments, negatively affecting TFC's pricing goals.

She had the option of focusing more on the fashionistas segment. Its strength in the highly valued 18-34 female demographics was going to help her ad pricing strategy. Its size was a problem as it had the potential of affecting viewership as it represented only 15% of

Households. They would however be of interest to the advertisers and she could leverage this in pricing. She projected a $3.5 CPM for this younger female segment. She estimated that she would require an additional $15 million per year for programming in this scenario.

Her third alternative scenario targeted two segments, fashionistas and shoppers & Planners. She projected that targeting these two segments would drive TFC's rating by 20% to 1.2, with an estimated CPM of $2.5. She projected to spend an additional $20 million per year for programming for this option. Dana understood that each of her recommendations would have to demonstrate how TFC's revenue would increase. She also needed to quantify the risks involved in each plan.

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Case Study on Fashion Network. (2023, May 01). Retrieved from

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