Focus Media makes a lot of revenue per screen compared to US Television.
Many people in the comments to the last post worked out rough ratios. There are at Focus Media roughly 130 thousand screens (more now, less at the beginning of the year) generating 221 million in revenue in the last six months (see press release).
In the fourth quarter of last year the revenue from LCD screens was 150.4 million. There were about 120 thousand screens average over the quarter. Annualized that is almost $5000 revenue per screen.
It depends a little on quarter - but Focus Media revenue per screen is 14 to 20 times higher than US Television revenue per screen.
Almost (but note entirely) everyone I have shown this to thinks that the revenue-per-screen at Focus Media seems high. [That includes many industry insiders.]
Overstated revenue per screen is consistent with interpretation (c) as per this post.
Other possible comparisons
It seemed to some people unfair to compare advertising in lift wells (which sometimes 20 people are forced to watch) with the TV in your kitchen (which may be on in background with one person or nobody watching). Some people thought I should compare with other out-of-home advertising companies.
The problem is that not all screens are born equal.
Screens are more valuable where rich people with high disposable income congregate. That are even more valuable if viewers have a willingness to spend that income.
They are more valuable where you are forced to wait (and hence watch the screen).
They are less valuable where only a few dozen people pass them per hour (say in the lobby of residential building). Also in the lobby of a residential building you see the screen when you are going home. Advertisers would prefer show their adverts to people who are near shops or about to go to the shops.
Probably the single most valuable screens are in airports. Airports are full of relatively well-to-do-people. They are also full of shops with fatter than average margins. People are forced to wait. Often they are travelling and extremely willing to spend on hotels, tourist attractions, luxury goods. Some even have expense accounts.
One comparable is Air Media - who probably have the best-placed screens in China - they dominate the airport space.
One part of that business is directly comparable to Focus Media. It has 42 inch panels which intersperse advertisements and content in airport waiting areas as per this quote from the annual:
We strategically place our digital TV screens in high-traffic areas of airports such as departure halls, security check areas, boarding gates, baggage claim areas and arrival halls, where there tend to be significant waiting time. A majority of our standard digital TV screens are 42-inch plasma display panels or LCDs. As of March 1, 2012, we operated approximately 2,690 digital TV screens in 36 airports in China under various concession rights contracts. These 36 airports accounted for approximately 81% of the total air travelers in China in 2011, according to the General Administration of Civil Aviation of China.That business generated 21.9 million dollars in revenue in the last year. That is just over $8000 per screen - or more than double Focus Media. However these screens are at least 4 times the size of Focus Media screens and have many times the views.
Bluntly: these are optimally placed large screens. Amongst locations in China really.
By contrast, Focus Media screens have been spotted in the basement of office buildings where the janitors and maintenance staff congregate. They also place screens on every floor of some office buildings - this one is on the 21st floor of an office building in Shanghai:
It has the usual number of people watching it. (Nobody...)
They are in lobbies of residential buildings in third-tier cities - where people watch them before they go back to their apartment rather than before they shop.
My guess: either revenue per screen at Air Media is low and likely to rise - or the revenue per screen at Focus Media is high or possibly overstated and likely to fall.
Some further calculations:
I work on the 21st floor of an office building in Sydney. It is unlikely that more than 20 people per hour catch the elevator at this floor. (That still makes the lobby busy...)
Work on 9 hours per day, 275 days per year, and you get about 50 thousand impressions per year.
The cost per thousand impressions for a Superbowl advertisement is about $35 (probably less). At Superbowl rates this screen would garner roughly $1500 revenue per annum.
Residential buildings in third tier cities would produce lower revenue.
If the revenue really is over $3000 a screen I doubt it is sustainable.
Being a cynical fellow I keep getting drawn back to interpretation C in this post.
PS. Air Media revenue per screen has been falling. I have talked to several people in the industry and they all say the same things. Revenue is growing but only because number of screens is growing. The pricing pressure in this industry is down simply because there are increasing numbers of screens.