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Fashion Channel (4) & (5) Exhibits

Harvard Business School Publishing Brief Case 2075

Case Software

Copyright © 2007 Harvard Business School Publishing !his case" though based on real events" isfictionali#ed" and any rese$blance to actual persons or entities is coincidental !here $ay beoccasional references to actual co$panies in the narration !o order copies or re%uest per$ission toreproduce $aterials" call &'(00'5)5'7*(5" write Harvard Business School Publishing" Boston" +,02&*-" or go to http.//wwwhbspharvardedu o part of this publication $ay be reproduced" storedin a retrieval syste$" used in a spreadsheet" or trans$itted in any for$ or by any $eans1electronic"$echanical" photocopying" recording" or otherwise1without the per$ission of Harvard BusinessSchool Publishing

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-2&0-0()3ls 43hibits )" 56 HBSP Confidential Page 2 of 2

Exhibit 4: Ad Revenue CalculatorAd Revenue Calculator

Current 2007 Base Scenario 1 Scenario 2 Scenario 3

TV HH 110,000,000 110,000,000 110,000,000 110,000,000 110,000,000

Average Rating 1.0% 1.0% 1.2% 0.8% 1.2%

Average Viewers (Thousand) 1100 1100 1320 880 1320

Average C!" #2.00 #1.80 #1.80 #3.$0 #2.$0

Average RevenueAd !inute"" #2,200 #1,&80 #2,3' #3,080 #3,300

Ad !inutesee* 201 201 201 201 201

ee*s+ear $2 $2 $2 $2 $2

Ad Revenue+ear #230,30,00 #20',$',30 #2&,080,832 #322,882,$0 #3$,&$,00

-reenta/ rograing ense # # # 1$,000,000 # 20,000,000

" RevenueThousand Viewers

"" Ca/-u/ated 45 u/ti/5ing Average Viewers 45 Average C!

2006 Actual 2007 Base Scenario 1 Scenario 2 Scenario 3 Assu!tions

Exhibit ": #inancialsRevenue

Ad 6a/es #230,30,00 #20',$',30 #2&,080,832 #322,882,$0 #3$,&$,00 7nsert s-enario resu/ts ro revenue -a/-u/atorAi/iate 9ees #80,000,000 #81,00,000 #81,00,000 #81,00,000 #81,00,000 :rows 2% er 5ear with ou/ation

$otal Revenue #310,30,00 #28&,1',30 #330,80,832 #0,82,$0 #2',$$,00

Ex!enses

Cost o ;erations #'0,000,000 #'2,100,000 #'2,100,000 #'2,100,000 #'2,100,000 :rows 3% er 5ear with in/ation

Cost o rograing #$$,000,000 # $$,000,000 # $$,000,000 # '0,000,000 # '$,000,000 Add in-reenta/ rograing eense

Ad 6a/es Coissions #,&18,&12 #,22',021 #','2,2$ #&,8,'' #10,3'8,38 3% o ad sa/es revenue

!ar*eting < Advertising #$,000,000 #0,000,000 #0,000,000 #0,000,000 #0,000,000 Re/e-ts in-reased sending o #1$!

6:A #0,000,000 #1,200,000 #1,200,000 #1,200,000 #1,200,000 :rowing with in/ation 3%

Tota/ ense #21,&18,&12 #23,$2',021 #23$,''2,2$ #2$2,&8,'' #2$8,'8,38 6readsheet -a/-u/ates autoati-a//5

%et &ncoe #&3,'11,88 #$,0,33& #&,&08,0' #1$1,&,083 #18,8',232 6readsheet -a/-u/ates autoati-a//5

'ar(in 30% 1&% 2&% 3'% 3&% 6readsheet -a/-u/ates autoati-a//5

rey 8student input area