I updated my model to add in Peak Pricing. Of course, I don’t have any data on what the actual amount will be for peak pricing, nor do I have the frequency of how often MP customers will use Peak Pricing.
I will update with more accurate estimates as the data comes out.
If you look at the model you will see I added two rows for Peak Pricing.
Row 6 and 7.
Row 6 is the percentage of the subscriber base estimated that will use Peak Pricing once in the month. This is a little confusing because 75% does not mean that 75% of the total sub base will actually use Peak. There will be high users of Peak, and low and zero users of Peak. So this is meant to be a blended average. I started with 75% – But really have no way of knowing how aggressive MP will be implementing peak fees, or what the user behavior will be like in terms of avoiding them. So we shall see.
Row 7 is the average price paid per Peak Price charge. I started at $2. This is I think conservative, and it could easily be higher. I doubt that MP will charge lower than $2 per Peak charge, and likely they will have higher. Again, since I don’t have data I will stay conservative on this.
You will see in the model, Peak Pricing can bring in a lot of revenue. My early conservative estimate for July shows $5.25 Million. But I think it can easily be double that without causing a total revolt of subscribers.
As per usual, the single biggest factor continues to be Utilization rate. I can show this model a lot of different ways, but it really only works when you get the average rate down to about 18 Movies a year.
I will continue to update and tweak.
disclaimer – it is a model and it is used for discussion purposes and looking at various possibilities. MP continues to evolve and change quickly. As changes happen I will try and update. I welcome feedback but don’t expect that I will change things just because you ask. So far, my models have been fairly close. But not dead on. I expect that to continue.