Decide Which Show to Renew
Company: Capital One
Role: Data Scientist
Category: Analytics & Experimentation
Difficulty: medium
Interview Round: Technical Screen
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?
Quick Answer: This question evaluates financial modeling, expected-value calculation, probabilistic reasoning, and risk assessment skills as applied to content renewal decisions.
