Saturday, April 26, 2008

VisionChina Media announces 2008 Q1 results

When we examined VisionChina Media's IPO in December of last year, I noted that while the company's filing statements gave us excellent insight into the transit-sector digital signage market in China, it was impossible to derive an accurate cost-per-slot or CPM figure because they didn't indicate how much revenue-generating airtime they were actually selling.

Today's update clears that up quite a bit, and further shows that if you have the wherewithal to install 40,000 screens in China, you too could have the opportunity to make boatloads of money. Take a look at some of these numbers:
  • Total revenues in the first quarter of 2008 grew 304.5% year-over-year and 13.5% quarter-over-quarter to $13.6 million, out of which advertising services revenues grew 326.0% year-over-year and 13.2% quarter-over-quarter to $13.2 million.
  • Net income in the first quarter of 2008 was $5.4 million, a decrease of 5.42% from $5.7 million in the fourth quarter of 2007, and a significant turn-around from a $0.36 million net loss in the first quarter of 2007. Excluding the three new exclusive cities that were included in the Company's network, net income for the first quarter 2008 was $5.5 million.
  • As of March 31, 2008, the Company had installed 48,719 digital displays on buses, subways trains and subway platforms, compared with the 41,410 at the end of 2007.
  • Average advertising service revenues per broadcasting hour grew 4.1% quarter-over-quarter to $493 dollars per broadcasting hour from $474 per broadcasting hour in the fourth quarter of 2007, and compared to $184 per broadcasting hour in the first quarter of 2007. This increase was a result of the full implementation of the rate card increase in November 2007. Excluding the three new exclusive agency cities that were included in the Company's network in the first quarter 2008, average advertising services revenues were $543 per broadcasting hour in the first quarter 2008.
  • Network capacity, which is measured by total broadcasting hours, reached 25,980 hours in the first quarter of 2008, compared to 23,908 hours in the fourth quarter of 2007 and 16,212 in the first quarter of 2007.
  • On average, the Company sold 6.24 advertising minutes per broadcasting hour in the first quarter of 2008, compared to 8.69 minutes per broadcasting hour in the fourth quarter of 2007 and 3.81 minutes per broadcasting hour in the first quarter of 2007. The decrease of minutes sold per broadcasting hour from the fourth quarter 2007 to the first quarter 2008 was due to expected seasonality in the first quarter. Excluding the three new exclusive agency cities that were included in the Company's network in the first quarter 2008, the Company sold 6.43 advertising minutes per broadcasting hour in the first quarter of 2008.
So as you can see, by only filling 10-15% of screen time with ads, the company is able to generate a significant amount of revenue (thanks to the insane quantity of both people and screens in the network), leaving them with room to grow while still providing enough non-commercial content to keep the screens useful and entertaining to viewers.


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1 comment:

Nate Nead said...

This is really good information, given the fact that most of the industry is ad supported. Some of the increases in the numbers you gave there were very high. That's encouraging since I work as an ad sales rep for a signage company. Great info on this post thanks.