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GMAT Club Olympics 2024 (Day 8): A leading streaming service company

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pranjalshah

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17 Jul 2024, 22:57

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Answer: B

Plan: Retaining subscribers to the ad-free tier by providing OC to them.

(A) Subscribers primarily choose the ad-free tier to avoid advertisements, not necessarily for exclusive content.

This shows that they don't care about OC. No need to assume because it's the opposite of what we want.

(B) The availability of popular original content will be a decisive factor for many users when choosing between the ad-supported and ad-free tiers.

If this is not true, then subscribers of ad-free tier won't care about the OC and thus the plan of retaining users through OC won't be a success.

(C) The reduced cost of the ad-supported tier will not significantly increase the total number of subscribers to the streaming service.

Even if it does, it does not harm the plan of retaining subscribers to ad-free tier by providing OC.

(D) Most current subscribers to the ad-supported tier do not consider the price difference between the two tiers to be prohibitively large.

If they do, the subscribers of the ad-supported tier won't shift to ad-free tier, but our plan is to retain ad-free subscribers, not the opposite.

(E) Other streaming services do not offer their premium content to subscribers of their lower-priced, ad-supported plans.

Does not affect because we are talking about original content of this particular service, something users will watch only here and not on other streaming services.

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(A) Subscribers primarily choose the ad-free tier to avoid advertisements, not necessarily for exclusive content: doesn't directly address the impact of exclusive content on subscriber retention or acquisition.

(B) The availability of popular original content will be a decisive factor for many users when choosing between the ad-supported and ad-free tiers. addresses the company's strategy of restricting access to popular original content ;alligns with company's strategy

(C) The reduced cost of the ad-supported tier will not significantly increase the total number of subscribers to the streaming service: doesn't affect the plan

(D) Most current subscribers to the ad-supported tier do not consider the price difference between the two tiers to be prohibitively large: doen't affect the strategy of giving excluisve content.

(E) Other streaming services do not offer their premium content to subscribers of their lower-priced, ad-supported plans: compares with other OTT 's ; dosn't affect the argument .

Ans B

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17 Jul 2024, 23:17

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Goal - Stopping the cheaper add-supported tier might lead to a significant decline in subscriptions to its more expensive, ad-free service.

Plan- Restrict content on ad-supported tier

What if people do not care of restricted content and still move to add-supported subscriptions?

Assumptions - People will prefer to have all the content and ready to pay higher price to watch add free.

A- No need of mitigation then , not an assumption
B. Correct and match with pre-thinking.
C. Increasing subscriber is not the plan.
D. Author is concerned with overall subscribers not most recent only
E. Out of Scope

Ans-B

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17 Jul 2024, 23:20

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Bunuel

This question was provided by GMAT Club
for the GMAT Club Olympics Competition

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I will go with B.

Take an example, if people are more concerned about popular content, take an example Bing Bang Theory, then the company plan to restrict access to its most popular original content exclusively to subscribers of the ad-free tier, will work.

Now negate this if people is not concerned, the conclusion will collapse.

Let us go with other option :

A) Subscribers primarily choose the ad-free tier to avoid advertisements, not necessarily for exclusive content.
This is not an assumption. This clearly means they are not concerned about content.

(C) The reduced cost of the ad-supported tier will not significantly increase the total number of subscribers to the streaming service. - > The plan is : the company plans to restrict access to its most popular original content exclusively to subscribers of the ad-free tier. We have to assume on this. This wont be an assumption

(D) Most current subscribers to the ad-supported tier do not consider the price difference between the two tiers to be prohibitively large. -> Then the plan wont have any impact. Not our answer.

(E) Other streaming services do not offer their premium content to subscribers of their lower-priced, ad-supported plans. -> Out of Scope here

So OA is B

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18 Jul 2024, 00:13

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Bunuel

A. If this is true then the company does not need to be worried about losing ad-free subscribers.
B. If this is not a decisive factor while choosing, then company's plans will not work. Keep.
C. Total number of subscribers is not the issue of the argument.
D. We are not concerned about users in ad-supported tier
E. Assuming this is irrelevant to the argument.

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(A) Subscribers primarily choose the ad-free tier to avoid advertisements, not necessarily for exclusive content.
If anything this choice does not go along the lines of conclusion.

(B) The availability of popular original content will be a decisive factor for many users when choosing between the ad-supported and ad-free tiers.
This has to be true in order for the company's plan to work because the most populat orginal content is restricted only to subscribers of the ad-free tiers and this must be the decisive factor for the users to choose between ad-supported and ad-free tiers.

(C) The reduced cost of the ad-supported tier will not significantly increase the total number of subscribers to the streaming service.
This is not relevant to the company's plan as increase in total number of subcribers to the streaming service is good, but not

(D) Most current subscribers to the ad-supported tier do not consider the price difference between the two tiers to be prohibitively large.
if subscribers to the ad-supported tier feel the price difference between the two tiers expensive, then all it says is these subscribers are not going to pick ad-free service. We cannot reall talk about the subscriptions to ad-free service.

(E) Other streaming services do not offer their premium content to subscribers of their lower-priced, ad-supported plans.
what other streaming services offer / do not offer has nothing to do with the company's plan.

The answer is B.

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18 Jul 2024, 00:29

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A leading streaming service company has introduced a new pricing tier that allows users to watch shows and movies with advertisements at a reduced cost. The company is concerned that this cheaper ad-supported tier might lead to a significant decline in subscriptions to its more expensive, ad-free service. Plan: To mitigate this, the company plans to restrict access to its most popular original content exclusively to subscribers of the ad-free tier.
Goal: Prevent a decline in subscription to its ad-free service.
Correct Assumption will ensure that the plan will work.

The company's plan assumes that:

(A) Subscribers primarily choose the ad-free tier to avoid advertisements, not necessarily for exclusive content: This weakens the plan that assumes that exclusive content will help retain current subscribers to its ad-free service.

(B) The availability of popular original content will be a decisive factor for many users when choosing between the ad-supported and ad-free tiers. Correct: If availability of popular content is not a decisive factor the plan is bound to fail.

(C) The reduced cost of the ad-supported tier will not significantly increase the total number of subscribers to the streaming service. The issue at hand is not increasing total number subscribers but preventing a decline in subscription to its ad-free service

(D) Most current subscribers to the ad-supported tier do not consider the price difference between the two tiers to be prohibitively large: Even if they do find the price difference prohibitively large, the current subscribers may stick to the existing service.

(E) Other streaming services do not offer their premium content to subscribers of their lower-priced, ad-supported plans. Out of scope.

kavyavishnoi02

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18 Jul 2024, 00:43

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Reasoning: The company's plan to restrict access to its most popular original content exclusively to subscribers of the ad-free tier hinges on an assumption about user behavior and preferences. Specifically, the plan assumes that the restriction will prevent a significant decline in subscriptions to the more expensive, ad-free service.

Let's analyse each option now:(A) This option suggests that avoiding advertisements is the main reason subscribers choose the ad-free tier. However, the company's plan relies on the assumption that exclusive content will drive subscribers to the ad-free tier, not just the absence of ads. Eliminated.

(B) This option aligns perfectly with the company's plan. The company assumes that by restricting popular original content to the ad-free tier, it will encourage users to subscribe to the more expensive tier despite the cheaper ad-supported option. The plan hinges on the belief that access to exclusive content is a crucial factor for subscribers.

(C) This option concerns the overall subscriber numbers and the impact of the reduced cost but does not directly address the assumption about the choice between the two tiers based on content availability. Eliminated.

(D) This option relates to the perception of the price difference but does not address the specific assumption about the importance of exclusive content in the decision-making process for tier selection. Eliminated.

(E) This option is about the practices of other streaming services and does not directly relate to the company's assumption about its own subscribers' behavior and preferences. Eliminated.

Therefore, the key assumption the company is making with its plan is best captured by option (B).

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18 Jul 2024, 00:44

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A leading streaming service company has introduced a new pricing tier that allows users to watch shows and movies with advertisements at a reduced cost. The company is concerned that this cheaper ad-supported tier might lead to a significant decline in subscriptions to its more expensive, ad-free service. To mitigate this, the company plans to restrict access to its most popular original content exclusively to subscribers of the ad-free tier.

Company's plan -> To minimize decline in expensive subscriptions, the company would restrict access to its most popular original content exclusively to subscribers of the ad-free tier(expensive subscriptions).

The company's plan assumes that:

(A) Subscribers primarily choose the ad-free tier to avoid advertisements, not necessarily for exclusive content. Wrong Choice
Opposite of the actual assumption.

(B) The availability of popular original content will be a decisive factor for many users when choosing between the ad-supported and ad-free tiers. Correct Choice
The company's plan is based on the assumtion that the popular original content will be a decisive factor for many users to opt for expensive ad-free tiers.

(C) The reduced cost of the ad-supported tier will not significantly increase the total number of subscribers to the streaming service. Wrong Choice
This is not an assumption for the plan.

(D) Most current subscribers to the ad-supported tier do not consider the price difference between the two tiers to be prohibitively large. Wrong Choice
Irrelevant

(E) Other streaming services do not offer their premium content to subscribers of their lower-priced, ad-supported plans. Wrong Choice
Irrelevant

lalliemoon

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18 Jul 2024, 01:03

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(A) Subscribers primarily choose the ad-free tier to avoid advertisements, not necessarily for exclusive content.

This option suggests that the main motivation for choosing the ad-free tier is the absence of advertisements, not access to exclusive content. However, the company's plan hinges on restricting popular content to the ad-free tier to maintain its appeal. Therefore, this assumption, if true, would weaken rather than support the company's strategy. Incorrect.

(B) The availability of popular original content will be a decisive factor for many users when choosing between the ad-supported and ad-free tiers.

This assumption directly aligns with the company's strategy. If users are attracted to the ad-free tier because it offers exclusive popular content, then restricting that content could indeed help retain subscribers in the higher-priced tier. This assumption supports the company's plan. Correct.

(C) The reduced cost of the ad-supported tier will not significantly increase the total number of subscribers to the streaming service.

This assumption concerns the overall subscriber numbers and does not directly relate to the retention strategy based on content exclusivity. While it's a valid concern for the company, it's not directly related to the assumption underlying their current plan. Incorrect.

(D) Most current subscribers to the ad-supported tier do not consider the price difference between the two tiers to be prohibitively large.

This assumption focuses on pricing perceptions of current subscribers and does not specifically address the impact of content exclusivity on subscriber retention as the company's plan does. Incorrect.

(E) Other streaming services do not offer their premium content to subscribers of their lower-priced, ad-supported plans.

This assumption pertains to the practices of other streaming services and does not directly support or relate to the company's strategy of restricting content access to retain subscribers in the higher-priced tier. Incorrect.

IMO - B

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18 Jul 2024, 01:06

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A leading streaming service company has introduced a new pricing tier that allows users to watch shows and movies with advertisements at a reduced cost. The company is concerned that this cheaper ad-supported tier might lead to a significant decline in subscriptions to its more expensive, ad-free service. To mitigate this, the company plans to restrict access to its most popular original content exclusively to subscribers of the ad-free tier.

The company's plan assumes that:

(A) Subscribers primarily choose the ad-free tier to avoid advertisements, not necessarily for exclusive content.
This is not an assumption relevant to the argument.

(B) The availability of popular original content will be a decisive factor for many users when choosing between the ad-supported and ad-free tiers.
This assumption is central to the company's strategy, as it relies on the belief that exclusive access to popular content will deter users from switching to the cheaper ad-supported tier.

(C) The reduced cost of the ad-supported tier will not significantly increase the total number of subscribers to the streaming service.
This would make no sense to the argument, rather weaken it hence this isnt a assumption.

(D) Most current subscribers to the ad-supported tier do not consider the price difference between the two tiers to be prohibitively large.
This isnt relevant to the assumption.

(E) Other streaming services do not offer their premium content to subscribers of their lower-priced, ad-supported plans.
This again is not relevant.

Hence B.

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18 Jul 2024, 01:38

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Bunuel

This question was provided by GMAT Club
for the GMAT Club Olympics Competition

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Since a new ad-inclusive plan was introduced by the service, they are afraid that it’ll make them lose many of their top-tier customers to the ad-inclusive plan, the reason their strategy to stop this by including many exclusive programs in the top tier subscription would work is that those customers might find it appealing to have access to these programs.

(B) correctly attacks this assumption by saying that customers might not even want access to exclusive programs.

Posted from my mobile device

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18 Jul 2024, 02:04

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(A) Subscribers primarily choose the ad-free tier to avoid advertisements, not necessarily for exclusive content.#No effect

(B) The availability of popular original content will be a decisive factor for many users when choosing between the ad-supported and ad-free tiers.#still there will be many for which the original content may be important

(C) The reduced cost of the ad-supported tier will not significantly increase the total number of subscribers to the streaming service.#Irrelevant

(D) Most current subscribers to the ad-supported tier do not consider the price difference between the two tiers to be prohibitively large.#Correct. If price difference is significantly important, then lower cost plan may still be attaractive than the premium content plan

(E) Other streaming services do not offer their premium content to subscribers of their lower-priced, ad-supported plans#other streaming services are Irrelevant

Answer D

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18 Jul 2024, 02:33

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Bunuel

This question was provided by GMAT Club
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Correct choice: B

If many users are concerned of original content then they will opt for ad-free tier rather than ad-supported tier. After restricting will only work if subscribers are concerned about original content. As this ad-supported plan is new plan at lower price which might reduce subscription to costly service if original content is not the main reason for choosing plan.

Incorrect choices:

A: This weakens the company's plan to restrict access to subscribers of ad-free tier only. As if they are choosing it for ad-free service then there's not worry about decline in that subscription.

C: We are just concerned about decline in ad-free service not increase in overall service.

D: There is not information about price difference, also if subscribers do not consider in large then it's not necessary that they will not go for lower subsciprtion.

E: There is new information but we don't know whether it worked or not and also not necessary that company is following other companies.

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18 Jul 2024, 02:44

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Type of question: Assumption

Scenario: To avoid loss of revenue, Streaming service wants to keep customers at ad-free plan by making them lured to popular original content.

Action: Attract with popular original content

Assumption: popular original content is deciding factor for choosing service.

If people choose services just based on price irrespective of content, then our plan to sell ad-free service fails .

So,
Ans. B

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18 Jul 2024, 03:01

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A leading streaming service company has introduced a new pricing tier that allows users to watch shows and movies with advertisements at a reduced cost. The company is concerned that this cheaper ad-supported tier might lead to a significant decline in subscriptions to its more expensive, ad-free service. To mitigate this, the company plans to restrict access to its most popular original content exclusively to subscribers of the ad-free tier.

The company's plan assumes that:

(A) Subscribers primarily choose the ad-free tier to avoid advertisements, not necessarily for exclusive content.(weaken the argument)

(B) The availability of popular original content will be a decisive factor for many users when choosing between the ad-supported and ad-free tiers. (Strengthen the argument; Check By negating this, it will weaken the argument as if original content is not decisive factor for choosing between the ad-supported and ad-free tiers, then even access to most popular original content only for ad free tier will not help company to stop decline in subscription to expensive ad free tier)

(C) The reduced cost of the ad-supported tier will not significantly increase the total number of subscribers to the streaming service. (out of scope as it did not tell anything about the ad free service subscriber base and ad supported service subscriber base for streaming service)

(D) Most current subscribers to the ad-supported tier do not consider the price difference between the two tiers to be prohibitively large. (Still there is a possibility of declining subscribership of expensive ad free service)

(E) Other streaming services do not offer their premium content to subscribers of their lower-priced, ad-supported plans. (out of scope as we dont concern with other streaming services)

Option B is our answer

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18 Jul 2024, 03:15

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Bunuel

This question was provided by GMAT Club
for the GMAT Club Olympics Competition

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I think option 'b'.
it would be because there is an underlying assumption that there would be people buying the subscription even with ads. and there would be people buying the subscription.

i think that there is an assumption that people would still buy the subscription only to avail themselves of exclusive content and no ads.

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18 Jul 2024, 03:17

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(A) Subscribers primarily choose the ad-free tier to avoid advertisements, not necessarily for exclusive content.
This proposal does not include the company's plan to opt out of advertising, as stated in the report above.
so, option A is not answer
(B) The availability of popular original content will be a decisive factor for many users when choosing between the ad-supported and ad-free tiers.
This proposal includes the company's plan that if ad-supported subscriptions lead to significant reductions in customer registrations, then there should be an ad-free customer registration service.
so, option B is answer

(C) The reduced cost of the ad-supported tier will not significantly increase the total number of subscribers to the streaming service.
This proposal cannot be included in the company's plan, as we are told in the above report that the advertising-supported customer registration service will reduce the number of customers.
so, option C is not answer
(D) Most current subscribers to the ad-supported tier do not consider the price difference between the two tiers to be prohibitively large.
This idea is not about the company's plan, but about the customer's perspective
so, option D is not answer
(E) Other streaming services do not offer their premium content to subscribers of their lower-priced, ad-supported plans.
This idea does not include the company's plans and the reasons above did not mention other streaming services
so, option E is not answer
Therefore the answer is B

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18 Jul 2024, 04:08

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A leading streaming service company has introduced a new pricing tier that allows users to watch shows and movies with advertisements at a reduced cost. The company is concerned that this cheaper ad-supported tier might lead to a significant decline in subscriptions to its more expensive, ad-free service. To mitigate this, the company plans to restrict access to its most popular original content exclusively to subscribers of the ad-free tier.

The company's plan assumes that:

(A) Subscribers primarily choose the ad-free tier to avoid advertisements, not necessarily for exclusive content.

(B) The availability of popular original content will be a decisive factor for many users when choosing between the ad-supported and ad-free tiers.

(C) The reduced cost of the ad-supported tier will not significantly increase the total number of subscribers to the streaming service.

(D) Most current subscribers to the ad-supported tier do not consider the price difference between the two tiers to be prohibitively large.

(E) Other streaming services do not offer their premium content to subscribers of their lower-priced, ad-supported plans.

conc:
the company plans to restrict access to its most popular original content exclusively to subscribers of the ad-free tier.

ans:
(B) The availability of popular original content will be a decisive factor for many users when choosing between the ad-supported and ad-free tiers.
this is the factor

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18 Jul 2024, 04:37

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Answer is B
The question in hand is about the users choosing between ad free and with ad subscriptions. The company feels that it will reduce their overall ad free subscribers and hence wants to put a bar on premium and popular content. The Company hence assumes that The availability of popular original content will be a decisive factor for many users when choosing between the ad-supported and ad-free tiers.
Statement A-is a potential fact but does not qualify as an assumption statement
Statement C-The reduced cost of the ad-supported tier will not significantly increase the total number of subscribers to the streaming service. however the issue at hand is about the adage on bars on premium content
Statement D-price difference as a fact is not the question here and does not qualify as an assumption statement.
Statement E- what other streaming services do is irrelevant