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Break-even subscribers for a video service Star Stream is a subscription-based video streaming service. Subscribers pay $120 per year for the service. Star Stream licenses

Break-even subscribers for a video service

Star Stream is a subscription-based video streaming service. Subscribers pay $120 per year for the service. Star Stream licenses and develops content for its subscribers. In addition, Star Stream leases servers to hold this content. These costs are not variable to the number of subscribers, but must be incurred regardless of the subscriber base. In addition, Star Stream compensates telecommunication companies for bandwidth so that Star Stream customers receive fast streaming services. These costs are variable to the number of subscribers. These and other costs are as follows: Enter your answers in whole dollars.

Server lease costs per year $ 100,000,000
Content costs per year 2,000,000,000
Fixed operating costs per year 900,000,000
Bandwidth costs per subscriber per year 15
Variable operating costs per subscriber per year 25

a. Determine the break-even number of subscribers. subscribers

b. Assume Star Stream planned to increase available programming and thus increase the annual content costs to $2,600,000,000. What impact would this change have on the break-even number of subscribers? Break-even number of subscribers will increase to subscribers.

c. Assume the same content cost scenario in (b). How much would the annual subscription need to change in order to maintain the same break-even as in (a)? The annual subscription need to increase from $ to $in order to maintain the same break-even as in (a).

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