Decide Which Show to Renew

You are a data scientist at a streaming company deciding whether to renew or cancel content over a 2-year planning horizon. Assume the following: - Each show releases 1 season per year. - Revenue per viewer is the incremental revenue attributable to that show's season. - Annual costs are incurred once per year. - Any startup cost is paid only once at launch. - Ignore taxes, discounting, and interactions across shows. - Profit = total revenue - total costs. You are evaluating two titles: **The Analyst** - Viewers per season: 5 million - Revenue per viewer per season: $15 - Annual cost: $50 million **Sharkbank** - This is a new show with a 2-year contract. - If the show succeeds: - Viewers per season: 7 million - Revenue per viewer per season: $15 - Annual cost: $60 million - One-time startup cost: $20 million - If the show fails: - Viewers per season: 4 million - Revenue per viewer per season: $15 - Annual cost: $60 million - One-time startup cost: $20 million - Probability of success: 50% - Probability of failure: 50% Answer the following: 1. What framework would you use to decide whether a streaming show should be renewed or canceled? Consider financial, user, strategic, and risk dimensions. 2. Compute the 2-year profit for **The Analyst**. 3. Compute the 2-year profit for **Sharkbank** in the success and failure scenarios, then compute its expected 2-year profit. 4. Which title would you choose under the assumptions above? Discuss expected value, downside risk, and when your recommendation might change. 5. If the company keeps **The Analyst**, what actions would you propose to improve its profit, and how would you measure whether those actions worked?