PRIME TIME

“Let’s watch some NEWS! What the hell?! This is not the show I used to watch, they changed the timing.” Yep, they did. But why? Let’s figure it out.

These days news channels have become very much competitive. For a good TRP they have to do a lot of effort. Having the show at the right time pays a lot to the channel, whereas even a great show at an off-time may not bring much change in their fortunes. Let’s talk about the two most important news shows, The Prime Time and The Late Night news. We’ll focus our analysis on these two shows of two leading news channels.

CBN-INN and TIMES THEN are two leading news channels in India. Presently both CBN-INN and TIMES THEN have Prime Time shows from 8 pm to 11 pm followed by their Late Night news show. Currently CBN-INN occupies 2^nd position in Prime Time, and because of TIMES THEN’s very strong 10-11 pm lead-in to its late news, CBN-INN is 2^nd in late news too, even though its news product is competitive. TIMES THEN then has 1^st position in prime time and has excellent 10-11 pm network lead-ins to its 11 o’clock news show, which puts it in #1 position in the late news race. Other news channels have considerably lower viewer share and has negligible effect on these leading news channels.

Now CBN-INN has #2 position in both Prime Time and Late Night shows even though it boasts of a competitive news product. So CBN-INN now wants to reschedule its Prime Time from 8-11 pm earlier to 7-10 pm. Do you think this is a good idea? What should be CBN-INN’s best strategy?

Let’s analyse this problem with the help of game theory. Firstly it’s a two player game and we should assume it to be a one-time game (i.e. not repetitive). The solution of such a problem is determined by the use of backward induction, i.e., looking forward and reasoning backward.

We first need to make a decision tree:

CBN-INN Decision Tree

Now we need to make a payoff matrix for the two channels. A payoff matrix indicates the outcomes of the player for their corresponding decision as well as of their opponent’s. We will make the payoff matrix with the help of the conditions provided in the problem.

The payoff table for the two channels is.

Assigning relevant values to the payoff matrix is very important and has to be done sincerely. The values has to be assigned according to the conditions given. For understanding this in a better way, let’s see what the values in each cell signifies.

Payoff Matrix Weighs

•   4,2 = If CBN-INN switches to early prime and TIMES THEN also switches, both gain more revenue from higher ratings for 10-10:30 p.m. late news.  TIMES THEN doesn’t gain as much as it would if CBN-INN switches and TIMES THEN doesn’t (3, 4). Try relating this to the conditions given in the beginning of the problem.

NOTE: Here, from the matrix when CBN-INN and TIMES THEN both switches payoff of CBN-INN is 4 and of TIMES THEN is 2.

•   3,4 = If CBN-INN switches and TIMES THEN doesn’t switch, CBN-INN gains revenue with its 10-10:30 p.m. news, but the news is up against TIMES THEN’s strong prime and TIMES THEN’s late news gets higher ratings than before because CBN-INN has dropped news from the time period.
•  1,3 = If CBN-INN doesn’t switch and TIMES THEN switches, CBN-INN loses big because its weaker 10-11 p.m. prime show is up against strong TIMES THEN’s news which has strong lead-ins and strong late fringe.
•  2,1 = If CBN-INN doesn’t switch and TIMES THEN doesn’t switch, nothing happens, but the outcome isn’t as bad as if CBN-INN doesn’t switch and TIMES THEN switches (1,3)

From this analysis of the payoff table, we can infer,

If TIMES THEN switches then CBN-INN’s best strategy is to switch (4) compared to not switch (1)

If TIMES THEN don’t switch then CBN-INN’s best strategy is still to switch (3) compared to not switch (2).

So CBN-INN’s dominant strategy is to switch. But CBN-INN has more payoff when

While doing the same analysis for TIMES THEN, we will find that there is no such dominant strategy for TIMES THEN.

Now how should CBN-INN design its strategy, what should be its strategic move? Think on your own for a while. Now see if you were right.

We should note that CBN-INN’s dominant strategy is to switch it prime time show. But it should also try to make TIMES THEN switch its Prime Time show as this gives more payoff (4) to CBN-INN than the case when TIMES THEN don’t switch (3).

Speaking of strategic moves, here secrecy is most opt for CBN-INN in this situation and can suffice CBN-INN’s need, let’s see how.

CBN-INN’s best strategy is to falsely announce it’s staying with its current schedule. TIMES THEN hoping so, to gain an advantage and hurt CBN-INN [(1,3) if switch and (2,1) if don’t switch] will switch.

Now that TIMES THEN has made its move to switch its prime time show.

Then, at the last moment, CBN-INN can switch to early prime to gain its maximum outcome (4,2), assuming TIMES THEN stays with its decision to switch.

Well now enjoy your new prime time and a new late night news. Next time you see such change in timing of your favorite show, you’re gonna figure out the very reason behind that.