Monday, January 16, 2006

China's Focus Media takesover largest rival

China’s fast growing Digital Out of Home Advertising

LCD advertising displays have become ubiquitous in China's big cities. They light up subways, buses, mini marts, and even taxis. This type of bombardment might turn off western consumers but in China, where advertising has been around for only a couple of decades, the screens have considerable novelty value. Recently a media merger has gone down between two video companies that put out content that is pure, unadulterated commercials. The venue is a large number of liquid-crystal-display screens hung wherever there's a place to hang (a la Times square inside) especially in elevator lobbies in apartments and office buildings. According to Frederik Balfour a writer for BusinessWeek Online, Focus, a company with 35K such screens in 52 Chinese cities is buying it biggest competitor, Target (capitalism at its finest) that will take it to 60K screens in 75 cities. Some venues are even allowing screen hanging free of charge to upgrade a building's ambience (imagine that). In the US we have several growing companies that have been successful in this new expanding category. PRN (recently acquired by Thompson) and Gannett owned Captivate Network. Both have grown double digits financially in the past 5 years and much larger media companies have acquired both in the past 24 months. With technology continuing to advance and come down in price, this is a sector to pay close attention to during the next 2-3 years. Links: BusinessWeek Online, Jan 12, 2006 – The Elevator Pitch China-Style, and Forbes Jan, 08, 2006 – China’s Focus Media to acquire top rival

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