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Example 9.2: Hydraulic Pump System with Feedback General Waiting Time Distributions. In Example 4.5 we considered the hydraulic pump system with feedback of Figure 2.10 with nonexponential waiting times. We simulated data on this system with p10 = 0.7 using an Exp(0.01) distribution for the 0 1 branch, IG(22.36,2.236) for 1 0, and a Gamma(1000,5) distribution for the 1 2 branch. We simulated 100 realizations of the process, 27 of which were censored. The censored data histograms for the state-to-state waiting times are given in Figures 4.10, 4.11, and 4.12. This is a queue with general waiting time distributions. Note that in the traditional queuing analysis, the parametric models are made on the unconditional arrival and service time distributions. The owgraph makes no assumptions about these unconditional distributions. The owgraph models the observable conditional waiting times and transition probabilities. Figure 4.10 indicates that the Weibull, gamma, and exponential models all t equally well. Since the exponential is a special case of both distributions, this makes sense for exponential data. Figures 4.11 and 4.12 indicate that both the inverse Gaussian and gamma models t the data of each transition well. We model the owgraph with an Exp( ) for the 0 1 branch, an IG( 1 , 2 ) for the 1 0 branch, a Gamma( , ) for the 1 2 branch, and p = p12 . Note that we could just as easily have reversed the models for the 1 0 and 1 2 transition. The MGF of the time to total failure is found by substituting these probabilities and MGFs into (9.11): M(s) = p s



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Typically, about 15 percent of paying subscribers flake on the subscription cost If, however, you are doing a show that makes money by playing advertising, you ll want to keep those subscribers in order to bill more for advertising Unless, that is, you are being paid for actual listeners or on a cost-per-action (CPA) basis If someone is downloading but not playing your show, you ll want to pare them from your subscription roles quickly because they cost you money when serving them a download of the show and may never turn that investment on your part into revenue by listening or following an advertisement link It s impossible to tell if a downloaded MP3 file is listened to, but Audible s Wordcast provides reports on whether files are played on an anonymous basis that can be used to cull non-listeners to free ad-supported programming.





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where T01 (s) = (1 s/5 ) 1 . Beyond T01 , calculating the branch transition probabilities and MGFs requires more work. The other individual transmittances Tij (s) are derived as follows. The probability of transition out of state i 1 in time [t, t + dt), given that transition to state i was made at time 0, is f (t| 1 , 2 )dt. The conditional probability of passing to state j in time [t, t + dt) is the chance of j i + 1 out of mi radios failing during the service time t; since each radio fails with probability 1 e t , this probability is qij (t) = mi (1 e t )j i+1 (e t )mi (j i+1) j i+1 (9.28)

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So, after that initial 15 percent non-paying subscriber hit on your circulation numbers, you need to recognize that out of every 100 new subscribers, only 85 pay you from the beginning You re also likely to lose another 5 percent of your total audience every month, some wanting refunds or just disappearing from your ad inventory because they never download To see the impact of that churn on your subscription numbers, see Figure 252 Likewise, if people subscribe but never actually play your podcast, they are not going to contribute to your earning money from advertising (after your advertisers begin to require that you prove someone listened to your podcast, which will happen sooner rather than later, if the history of the Web is any guide).

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Even if you expect to earn money on a CPA basis, you have to have listeners to figure out how many will be converted to action Say, for instance, that you earn $20 per action ( a $20 CPA ) from your advertising In order to get a $20 CPM (cost-per-thousand), you would need to have one action per thousand ads, or a onetenth of one percent conversion rate Typically, advertising links perform well if they convert one half of one percent to action An excellent conversion rate of ads displayed to listeners acting would be near one percent Amazing peaks of performance will happen, but do not expect to see consistent 25 percent conversion rates We come then to the last line of the calculation in Figure 251: the number of episodes the average subscribers will play.

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