Focus Media Revenue Plausibility Test: Purpose Two
Focus Media makes a lot of revenue per covert compared to United States of America of America Television.
Many people inwards the comments to the final post worked out crude oil ratios. There are at Focus Media roughly 130 k screens (more now, less at the start of the year) generating 221 1000000 inwards revenue inwards the final vi months (see press release).
That is crude oil $3400 per covert per yr per year.
In the fourth quarter of final yr the revenue from LCD screens was 150.4 million. There were nigh 120 k screens average over the quarter. Annualized that is almost $5000 revenue per screen.
In the fourth quarter of final yr the revenue from LCD screens was 150.4 million. There were nigh 120 k screens average over the quarter. Annualized that is almost $5000 revenue per screen.
Television advertising revenue inwards the US is nigh $72 billion.
There are roughly 310 1000000 televisions inwards the US. (See here suggesting lower or here suggesting higher...)
Revenue per covert is roughly $235.
It depends a lilliputian on quarter - but Focus Media revenue per covert is fourteen to xx times higher than United States of America of America Television revenue per screen.
Almost (but annotation entirely) everyone I accept shown this to thinks that the revenue-per-screen at Focus Media seems high. [That includes many manufacture insiders.]
Overstated revenue per covert is consistent alongside interpretation (c) equally per this post.
Other possible comparisons
It seemed to some people unfair to compare advertising inwards get upward wells (which sometimes xx people are forced to watch) alongside the TV inwards your kitchen (which may go on inwards background alongside 1 somebody or nobody watching). Some people idea I should compare alongside other out-of-home advertising companies.
The work is that non all screens are born equal.
Screens are to a greater extent than valuable where rich people alongside high disposable income congregate. That are fifty-fifty to a greater extent than valuable if viewers accept a willingness to pass that income.
They are to a greater extent than valuable where yous are forced to expect (and thus sentry the screen).
They are less valuable where only a few dozen people go yesteryear them per hr (say inwards the foyer of residential building). Also inwards the foyer of a residential edifice yous meet the screen when yous are going home. Advertisers would prefer exhibit their adverts to people who are close shops or nigh to larn to the shops.
Probably the unmarried most valuable screens are inwards airports. Airports are total of relatively well-to-do-people. They are besides total of shops alongside fatter than average margins. People are forced to wait. Often they are travelling as well as extremely willing to pass on hotels, tourist attractions, luxury goods. Some fifty-fifty accept expense accounts.
One comparable is Air Media - who likely accept the best-placed screens inwards Cathay - they dominate the drome space.
One component subdivision of that line of piece of work concern is straight comparable to Focus Media. It has 42 inch panels which intersperse advertisements as well as content inwards drome waiting areas equally per this quote from the annual:
Bluntly: these are optimally placed large screens. Amongst locations inwards Cathay really.
By contrast, Focus Media screens accept been spotted inwards the basement of component subdivision buildings where the janitors as well as maintenance staff congregate. They besides identify screens on every flooring of some component subdivision buildings - this 1 is on the 21st flooring of an component subdivision edifice inwards Shanghai:
It has the commons release of people watching it. (Nobody...)
They are inwards lobbies of residential buildings inwards third-tier cities - where people sentry them before they go dorsum to their even rather than earlier they shop.
My guess: either revenue per covert at Air Media is depression as well as probable to ascension - or the revenue per covert at Focus Media is high or mayhap overstated as well as probable to fall.
==============
Some farther calculations:
I run on the 21st flooring of an component subdivision edifice inwards Sydney. It is unlikely that to a greater extent than than xx people per hr grab the get upward at this floor. (That yet makes the foyer busy...)
Work on nine hours per day, 275 days per year, as well as yous larn nigh 50 k impressions per year.
The toll per k impressions for a Superbowl promotion is nigh $35 (probably less). At Superbowl rates this covert would garner roughly $1500 revenue per annum.
Residential buildings inwards 3rd tier cities would arrive at lower revenue.
If the revenue actually is over $3000 a covert I incertitude it is sustainable.
Being a cynical beau I continue getting drawn dorsum to interpretation C inwards this post.
John
PS. Air Media revenue per covert has been falling. I accept talked to several people inwards the manufacture as well as they all say the same things. Revenue is growing but only because release of screens is growing. The pricing pressure level inwards this manufacture is downwards but because at that spot are increasing numbers of screens.
It depends a lilliputian on quarter - but Focus Media revenue per covert is fourteen to xx times higher than United States of America of America Television revenue per screen.
Almost (but annotation entirely) everyone I accept shown this to thinks that the revenue-per-screen at Focus Media seems high. [That includes many manufacture insiders.]
Overstated revenue per covert is consistent alongside interpretation (c) equally per this post.
Other possible comparisons
It seemed to some people unfair to compare advertising inwards get upward wells (which sometimes xx people are forced to watch) alongside the TV inwards your kitchen (which may go on inwards background alongside 1 somebody or nobody watching). Some people idea I should compare alongside other out-of-home advertising companies.
The work is that non all screens are born equal.
Screens are to a greater extent than valuable where rich people alongside high disposable income congregate. That are fifty-fifty to a greater extent than valuable if viewers accept a willingness to pass that income.
They are to a greater extent than valuable where yous are forced to expect (and thus sentry the screen).
They are less valuable where only a few dozen people go yesteryear them per hr (say inwards the foyer of residential building). Also inwards the foyer of a residential edifice yous meet the screen when yous are going home. Advertisers would prefer exhibit their adverts to people who are close shops or nigh to larn to the shops.
Probably the unmarried most valuable screens are inwards airports. Airports are total of relatively well-to-do-people. They are besides total of shops alongside fatter than average margins. People are forced to wait. Often they are travelling as well as extremely willing to pass on hotels, tourist attractions, luxury goods. Some fifty-fifty accept expense accounts.
One comparable is Air Media - who likely accept the best-placed screens inwards Cathay - they dominate the drome space.
One component subdivision of that line of piece of work concern is straight comparable to Focus Media. It has 42 inch panels which intersperse advertisements as well as content inwards drome waiting areas equally per this quote from the annual:
We strategically identify our digital TV screens inwards high-traffic areas of airports such equally divergence halls, safety depository fiscal establishment tally areas, boarding gates, baggage claim areas as well as arrival halls, where at that spot tend to go pregnant waiting time. H5N1 bulk of our criterion digital TV screens are 42-inch plasma display panels or LCDs. As of March 1, 2012, nosotros operated about 2,690 digital TV screens inwards 36 airports inwards Cathay nether diverse concession rights contracts. These 36 airports accounted for about 81% of the total air travelers inwards Cathay inwards 2011, according to the General Administration of Civil Aviation of China.That line of piece of work concern generated 21.9 1000000 dollars inwards revenue inwards the final year. That is precisely over $8000 per covert - or to a greater extent than than double Focus Media. However these screens are at to the lowest degree 4 times the size of Focus Media screens as well as accept many times the views.
Bluntly: these are optimally placed large screens. Amongst locations inwards Cathay really.
By contrast, Focus Media screens accept been spotted inwards the basement of component subdivision buildings where the janitors as well as maintenance staff congregate. They besides identify screens on every flooring of some component subdivision buildings - this 1 is on the 21st flooring of an component subdivision edifice inwards Shanghai:
It has the commons release of people watching it. (Nobody...)
They are inwards lobbies of residential buildings inwards third-tier cities - where people sentry them before they go dorsum to their even rather than earlier they shop.
My guess: either revenue per covert at Air Media is depression as well as probable to ascension - or the revenue per covert at Focus Media is high or mayhap overstated as well as probable to fall.
==============
Some farther calculations:
I run on the 21st flooring of an component subdivision edifice inwards Sydney. It is unlikely that to a greater extent than than xx people per hr grab the get upward at this floor. (That yet makes the foyer busy...)
Work on nine hours per day, 275 days per year, as well as yous larn nigh 50 k impressions per year.
The toll per k impressions for a Superbowl promotion is nigh $35 (probably less). At Superbowl rates this covert would garner roughly $1500 revenue per annum.
Residential buildings inwards 3rd tier cities would arrive at lower revenue.
If the revenue actually is over $3000 a covert I incertitude it is sustainable.
Being a cynical beau I continue getting drawn dorsum to interpretation C inwards this post.
John
PS. Air Media revenue per covert has been falling. I accept talked to several people inwards the manufacture as well as they all say the same things. Revenue is growing but only because release of screens is growing. The pricing pressure level inwards this manufacture is downwards but because at that spot are increasing numbers of screens.
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