A digital signage news report stated:
‘China is set to take over from the United States in 2008 as the biggest source of growth in global ad spending. Although the United States remains a much larger advertising market over all, China will account for 24 percent of new spending worldwide, compared with 20 percent for the United States.’ Heralded partly by the fact that television advertising in China has a long way to go before it catches up with the rest of the world, Out-of-Home and indeed, Digital Signage seems to be the medium of choice for pushing advertising content to the teeming billions.
Chinese digital signage networks boast upwards of 50,000 signage sites containing five to six screens per site. Do the math 250k to 300k digital out-of-home signage screens. That’s a heckuva lot of real estate, with a monstrous advertising potential. The article also stated that globally, China has a greater footprint per location. China’s five to six screen per location average beats global networks who’re only averaging three to four.
A February 2008 article outlined some of China’s vast digital signage networks as well as the companies that manage them.
Focus Media (NASDAQ:FMCN)
Focus Media was the first digital signage firm to have an IPO. At the time of the February publication, the company had over 80,000 locations in public and retail locations. And, “its stock peaked at 66.30 in 2007, growing more than 200% since its IPO.” The company acquired CGEN media just prior to its IPO at the end of 2007 for $350 million in cash and stocks.
AirMedia focuses on Chinese air travelers-which are some of the country’s wealthiest. Their network boasts over 16,000 screens in airports across the country
VisionChina has networks installed primarily in buses and trains. With a network of over 26,000 screens and a captive audience of bus riders the company has been able reach and target vast amounts of Chinese citizens.
The “Big-Three” of Chinese Digital Signage, command a staggering $5.375 billion in market capitalization which, according to NSR, represents scale comparable to the entire Digital Signage industry world-wide.
With these types of stats, it’s easy to see that China is not only leading in the digital signage sphere, but is kicking the pants off of other national and international players. I have two questions in regard to this:
1. With such a large market cap and a big head start, will anyone be able to catch up?
2. What can we learn from them?