Nobody is immune from the effects of declining revenues—not even movie stars. Wh

Question

Nobody is immune from the effects of declining revenues—not even movie stars. When the number of viewers of the television show “House,” a medical drama, declined by almost 20%, Fox Broadcasting said it wanted to cut the license fee that it paid to NBCUniversal by 20%. What would NBCUniversal do in response? It might cut the size of the show’s cast, which would reduce the payroll costs associated with the show. Or, it could reduce the number of episodes that take advantage of the full cast. Alternatively, it might threaten to quit providing the show to Fox altogether and instead present the show on its own NBC-affiliated channels.

P.S. The book has the answers on the page 492 but I would like the answer in others words.

Explanation / Answer

As there is decrease in viewers of the show by almost 20% , the revenue from the show is also decreased.

Now the license fee being paid to NBC Universal is cut by the Broadcasting.

To cope up with all these decrease in revenue due to the decrease in no of viewers the NBC Universal can present the show on its own affiliated channels if it is beneficial to it or it can reduce the no of shows but what i think that reducing the no of episodes will also not be that much beneficial to the NBC Universal.

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