Focus Media (FMCN) posts strong earnings from digital signage division

Published on: 2015-02-05

From this press release:

In the first quarter of 2008, digital out-of-home advertising revenue was $108.7 million, up 113.4% year-over-year.
  • Advertising service revenue from our commercial location network, including revenue from our LCD display networks, outdoor digital and non-digital billboard networks and movie theater advertising network, grew 96.8% year-over-year to $62.3 million.
  • Advertising service revenue from our in-store network, including revenues from CGEN Digital Media Company Limited ("CGEN"), was $17.3 million, an increase of 160.2% year-over-year.
  • On January 2, 2008, we completed the acquisition of CGEN, which has significantly strengthened our market leadership in the in-store advertising market.
  • Advertising service revenue from our in-elevator poster frame network grew 130.3% year-over-year to $29.2 million
Our take:

Focus Media's digital out-of-home advertising business continues to thrive, thanks to China's bustling economy and the upcoming Summer Olympics in Beijing. Their unique technical approach to digital signage -- namely, use the cheapest possible method to free up the most cash to enable the most screens to be deployed (indeed, many screens are still updated by hand using CF cards!) -- seems to be working, and their footprint on the mainland continues to grow and produce ever more revenue for the firm.  Their acquisition of their largest competitor, CGEN, put to rest any concerns about revenue-slashing competition and advertising price wars, leaving Focus free to... focus... on capturing more eyeballs in commercial buildings, elevators, movie theaters, and on outdoor billboards.

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