A power ratio is a method used by media companies to measure revenue performance compared to the audience share it controls. In order to use the power ratio, a company must know three numbers: the total market revenue, the company's revenue, and the audience share. The goal for media companies is to receive a high score in this ratio.

A power ratio often is used to compare the performance of different media forms against similar competitors. A high power ratio means that more revenue is received per thousand visitors or participants within a given medium. Power ratios are used both by media firms to evaluate performance and occasionally by large media corporations who seek to buy out smaller media outlets.

This question was answered by Richard C. Wilson.

  1. Who are Disney's (DIS) main competitors?

    The Walt Disney Company (DIS) has built a diverse empire since its beginning in the 1920s, creating a huge range of lucrative ... Read Full Answer >>
  2. How did Rupert Murdoch make his fortune?

    Rupert Murdoch made his fortune in the media business, initially in newspaper acquisition and turnaround and later in broadcast ... Read Full Answer >>
  3. What is expected to happen to Rupert Murdoch's empire after his death?

    Multibillionaire Australian-American business magnate and media mogul Rupert Murdoch, founder, chairman and CEO of News Corp ... Read Full Answer >>
Related Articles
  1. Investing

    Why Disrupting Television Will Take Time 

    The growing popularity of YouTube and Netflix has given rise to dire predictions about television's death. But here's why the medium may prove to be resilient.
  2. Stock Analysis

    Netflix Will Soon Be Worth More Than Direct TV

    Understand the similarities and differences between Netflix and DirectTV. Learn about four key reasons why Netflix will be worth more than DirectTV.
  3. Investing

    Is Pandora Set For A Rebound?

    Pandora stock is showing signs of a rebound. The beaten-down stock has picked up after the release of 2Q '15 results and the outlook seems promising.
  4. Personal Finance

    5 Reasons The Cable TV Industry Is Dying

    The demise of cable TV has been written about for many years but cable continues to hang on. This article discussed why cable is faced with these issues.
  5. Investing Basics

    Netflix's Next Target: Prime-Time TV

    Learn the main reasons Netflix needs to go head-to-head with cable companies by offering live TV.
  6. Investing Basics

    How Netflix Is Changing The TV Industry

    First Blockbuster, now cable companies? Find our how Netflix's popular streaming service is forcing the television industry to adapt or die trying.
  7. Personal Finance

    What The Golden Globe Winners Earn And Are Worth

    When it comes to awards shows, the winners not always are the biggest earners. We take a look at how much the Golden Globe winners earn and are worth.
  8. Home & Auto

    Are Hulu And Netflix A Credible Threat To Cable?

    The ease and accessibility of online-video and streaming services is posing a threat to the cable industry's standard model of television programming.
  9. Entrepreneurship

    The Pros And Cons Of Hulu, Netflix, And Amazon Instant Video

    A full comparison of Netflix, Hulu, and Amazon Instant Video.
  10. Investing News

    The Economics of Hulu, Netflix, Redbox and Blockbuster

    These on-demand entertainment giants have already changed the way we consume entertainment. Who is poised to win this race for eyeballs?
  1. No results found.

You May Also Like

Hot Definitions
  1. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  2. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  3. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  4. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  5. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
  6. Revenue

    The amount of money that a company actually receives during a specific period, including discounts and deductions for returned ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!