Focus to concentrate on OOH, but Jiang takes cinema job
China’s Focus Media Holding appears to be returning to its out-of-home roots after its abortive merger with Internet giant Sina and last year’s ignominious departure from the mobile-phone advertising business.
Founder and CEO Jason Jiang (pictured) warned in a recent interview that the company’s results for the third quarter would show a dip, as up to half a dozen of Focus’s less profitable businesses are removed from its fiscal reports.
The acquisitions of several online advertising companies that Focus was taking over through instalment payments will be abandoned, it appears. “No further cash will be paid that has not already been paid on these acquisitions,” Jiang was reported as saying.
“The value of the first instalments will become equity, such that Focus Media will remain a small shareholder in these companies.” It will, however, continue to maintain control of some Internet subsidiaries, such as Allyes.
Jiang also indicated that Focus does not intend to return to the mobile-phone advertising business, which it all but fled after after accusations of spamming in 2008.
Instead, said Jiang, it will focus on its three core businesses: its commercial-location digital-screen network, poster frames, and in-store screens. The company will expand these networks through organic growth, rather than acquisition.
Leading role
Cinema advertising may also emerge as a significant business in Focus’s future, however, with Jiang recently taking on the additional role of CEO at Filmore Media, its 70-percent-owned subsidiary.
“China’s film-advertising market is expected to grow at a brisk pace in the future, highlighted by a box-office revenue boom in recent years,” Jiang was quoted as saying.
Growth in box-office receipts – and hence audiences – of about 30 percent annually since 2007 has not been matched by increases in cinema-advertising revenue, implying plenty of scope to bring new ad yuan to the big screen.
Filmore Media sells advertising on 1600 screens at more than 300 cinemas in 77 cities.
Meanwhile, Focus has received a ringing endorsement from one investment analyst, with Morgan Stanley’s Richard Ji saying that fair value for the stock – trading on the U.S. NASDAQ market this morning at about $13.50 – is nearly 55 percent higher, at $20.80.
www.filmore-media.com
www.focusmedia.cn
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