Focus Media Plausibility Exam Business Office One

This post service is beingness written for everyone on the deal-team bidding for Focus Media.

It is likewise been written for everybody who is considering whether to lend the bid 1.5 billion dollars to consummate this deal.

Finally it is beingness written for Ashish Goyal from Prudential Investments who is Focus Media's largest shareholder as well as was quoted inward the WSJ stating he wanted to a greater extent than than $30 for his shares. [Someone delight forrad this to Mr Goyal. He seems a reasonable man.]

I only desire you lot to guess the numbers. Don't await them up. Don't calculate. Just guess. Put your guess inward the comments - anonymously if you lot wish.

TV Revenue per covert inward the US

There are virtually 310 1 chiliad k TV sets inward the the States - roughly 1 per person. People deliberately spotter these for several hours a day. Indeed people sit down their household unit of measurement downwards inward front end of them to swallow dinner.

Their original economical purposes is to demo advertisements - the content on them is the lure to larn people to sit down inward front end of them.

And at that spot is an enormous manufacture producing content for them (whose costs lead maintain to endure covered yesteryear advertising). Influenza A virus subtype H5N1 proficient purpose of the metropolis of Los Angeles exists to create TV content. TV advertising supports the lifestyles of every photographic idiot box camera traveling pocket as well as editor as well as some real large indulgent lifestyles (Charlie Sheen).

TV advertising is nonetheless the biggest advertising category inward the US.

So accept a guess at the advertising revenue per screen. Per month, per year, I don't care. Just guess the revenue per screen.

LCD Revenue per covert inward China

Focus Media has virtually 130 chiliad LCD screens - the original format beingness 17 inch LCDs displaying almost alone adverts.

The bulk of these screens are inward get upward lobbies as well as other low-traffic locations.

Here is a typical covert from a low-traffic expanse - this one 1030 Hua Min Empire Plaza Shanghai.

Nobody sits themselves downwards inward front end of these screens - but they are forced to spotter (or at to the lowest degree endure around) the adverts when waiting for an elevator.

On the addition side these screens don't waste matter precious fourth dimension alongside content - they only demo adverts (which would tend to brand them to a greater extent than valuable). And you lot can't fast-forward through the adverts.

However they are inward Red People's Republic of China where advertising rates (per chiliad impressions) are to a greater extent than oft than non lower than the US.

Moreover, nobody sits their household unit of measurement only about these screens to swallow dinner.

So accept a guess at revenue per covert for Focus Media's LCD screens. Per month, per year, I don't care. Just guess the revenue per screen.

Ratios

Have a await at your guesses.

Calculate the ratio of Focus Media revenue per covert to the States Television revenue per screen. Is Focus Media:

* v pernent of the revenue per covert of the States TV?
* 10 per centum of the revenue per screen?
* 25 per centum of the revenue per screen?
* l per centum of the revenue per screen?
* About the same revenue per covert every bit the States TV?
* Double the revenue per covert of the States TV?
* Four times the revenue per covert of the States TV?
* Ten times the revenue per covert of the States TV?
* Twenty times the revenue per covert of the States TV?

Please seat your approximate inward the comments.

More tomorrow.







John