The CBS cable channel is aimed at those who prefer watching Macbeth as performed by the Royal Shakespeare Theatre rather than the comedy series Love Boat. The division's executives believed that a collection of quality plays, concerts, operas and other programs would attract a modest but loyal audience, those looking for an alternative to popular TV shows. Although the audience would be small, it was assumed that they would be fairly wealthy people, and perhaps future advertisers.
The cable channel's programs included programs featuring famous musicians, theater productions with popular actors, and interviews with outstanding artists. Its highlight band data package was a dance program, in the production of which outstanding modern dancers took direct part. The channel received only laudatory reviews and recommendations from critics. However, one year after the cable channel began operating, CBS publicly announced its closure. This was due to significant losses, which, according to preliminary estimates, amounted to more than 30 million dollars.
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Interestingly, the quality of the programs broadcast did not have a detrimental effect on the failure. Viewers were more than satisfied. The losses were due to the fact that funding from potential advertisers never arrived. The channel began operating during an economic crisis. Therefore, many companies tightened their belts and managed their budgets very sparingly. The caution of advertisers was further increased by the fact that the cable system did not have a function for conducting surveys among viewers, for example, as in the company "A.S. Nielsen". And the advertising sponsors assessed the financing of programs with an unknown audience size as too great a risk.
Another mistake in developing a marketing strategy here is the poor analysis of competitors. At that time, there were a large number of channels on television with similar content and a limited audience. For example, the ABC channel "Art", the Bravo television center, and an entertainment channel. The last two did not use PR to finance their activities, but asked users to pay a subscription fee. The "Art" channel counted on the support of advertisers.
CBS Cable Channel
Source: shutterstock.com
At one point in time, the management of the CBS cable channel discussed the idea of introducing a subscription fee, but it did not develop, since most viewers already had subscriptions to one of the television centers. And analysts decided that during the economic crisis, not many users would be able to connect another one. Thus, under the influence of external factors, a situation was created in which a small audience of viewers and advertisers was fragmented between a large number of television channels.
Competition brought new expenses as demand for ballet and theater rights increased, and prices rose. The increased expenses forced CBS to start its own production, which proved impossible without the use of financial resources, which were already almost zero. Even though the cable channel's own productions were as good as the purchased ones, viewers were given freedom of choice, including outside of television. For example, the original version of the Pirates of Penzance was shown before the same production was released in a film version on the big screen. The financial resources spent on this brought nothing but losses.
Most likely, the failure and bankruptcy of the CBS cable channel directly depended on external factors. The marketing environment of business is very susceptible to the influence of the state of the economy in the country and a large number of competitors. Entrepreneurs in the television industry must focus not only on the popularity of programs and their attractiveness to viewers, but also on many other factors, ignoring which can lead to the failure of the project, as happened with the cable channel of the CBS television company.
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