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Medium Valuation Investment Decision Capital Budgeting

Podcast to Podca$h

#Technology #Music Streaming #Media
ProHub Comment

This is a structured capital budgeting case requiring the candidate to build a financial model from listener data and calculate NPV. The case tests both quantitative modeling skills (revenue build-up, cost analysis) and strategic thinking around market risks such as cannibalization and competitive response.

Estimated Time 15 minutes
Difficulty Medium
Source Cornell
50 / 100
Your client is a large music streaming platform. They are considering negotiating an agreement for exclusive ownership rights to content created by a famous podcaster for the next five years. They have hired you to help them evaluate the proposed terms of the agreement.

Clarifying Information

  1. Client is focused on maintaining their listener base and sell as many ad minutes as possible. They are also concerned with profitability.
  2. Revenue Streams: Membership fees and advertisements
  3. Costs: Upfront payment and a recurring licensing fee each year