AirMedia Group, Inc. (AMCN)
News and Research on AirMedia Group, Inc. (AMCN)
Business Description
AirMedia Group, Inc. operates air travel TV media network in the People’s Republic of China with contracts and concession rights to operate digital displays in the major airports in the PRC, and on the airplanes operated by major airline companies in the PRC. As of June 30, 2007, the company had entered into 84 concession rights contracts to operate its digital TV screens and other displays in 51 airports in China.
Advertising Services
The company provides advertising services from the following platforms: digital TV screens in airports, which consist of both advertising and non-advertising content, digital TV screens on airplanes, which consist of both advertising and non-advertising content, and other displays, such as light box displays, 3D advertising displays and 360-degree LED displays, which contain advertising content.
Digital TV Screens in Airports
The company operates approximately 2,000 digital TV screens in 37 airports in China and has entered into concession rights contracts to operate digital TV screens in 52 airports in China. The company has obtained contractual concession rights to operate 328 digital TV screens in the Terminal 3 of Beijing Capital International Airport.
The company’s primary form of digital advertising in airports is closed-circuit television displays. It places its digital TV screens in areas of airports, such as departure halls, security check areas, boarding gates, baggage claim areas and arrival halls. A majority of its standard digital TV screens are 42-inch plasma display panels (PDPs) or liquid crystal displays (LCDs).
The company’s airport programs consist of advertising and non-advertising content and are played for approximately 16 hours per day. Its non-advertising content is played in two-hour cycles, during which its advertising content is repeated hourly. During each hour, 25 minutes of the program consists of advertising content provided to the company by its advertising clients and the rest of the program consists of non-advertising content, such as news and entertainment content provided by third-party content providers.
In addition to the separate advertising messages or videos, which are updated weekly, the company promotes the brand names of its advertising clients by naming its programs after their brand names. The non-advertising content consists of the latest domestic and international news provided by CCTV, which is updated daily, and other content including comedy clips, such as ‘Just For Laughs,’ the tourism program ‘Globe Trekker’ provided by Pilot Production and fashion shows, which are generally updated monthly. In eight airports in its network including Beijing Capital International Airport, Shanghai Hongqiao International Airport, Guangzhou Baiyun International Airport, Shenzhen International Airport, Chengdu Airport, Sanya Airport, Haikou Airport and Changsha Airport, the company turns its displays into split screens when showing non-advertising content. The split-screen feature allows non-advertising content and advertisements to be played simultaneously.
In addition to the traditional displays, the company’s major network airports also have feature displays such as:
Mega display screens: In both the departure hall and the arrival hall of the Beijing Capital International Airport, the company has placed four LED mega display screens with a size of nine square meters each, featuring large viewing angles and high resolution images. The company has also placed two LED mega display screens in Kunming Airport and Guangzhou Baiyun International Airport of 14 square meters and 22 square meters in size, respectively.
Displays in airport train station: The company has obtained concession rights to place 14 digital TV screens in the Maglev Train station of Shanghai Pudong International Airport.
Shuttle bus displays: The company has placed 60 digital TV screens on 31 airport shuttle buses operated by three airports to transport air passengers. In addition, the company has obtained concession rights to place an additional 18 digital TV screens on 9 airport shuttle buses in other airports.
Digital TV Screens on Airplanes
The company’s programs are placed on approximately 16,000 digital TV screens on approximately 2,000 routes of nine airlines, including China Southern Airlines; China Eastern Airlines; Air China; Shanghai Airlines; Shenzhen Airlines; Air Macau; Xiamen Airlines; United Eagle Airlines; and East Star Airlines. The displays on its network airplanes, which have been installed by aircraft manufacturers, are located at the top of passenger compartments and on the back of passenger seats. The digital TV screens at the top of passenger compartments typically range from 14 inches to 50 inches in size and there are approximately 10 to 300 on each plane. The display screens on the back of passenger seats typically range from seven inches to nine inches in size, depending on the class of the passenger seating area, and typically there is a display screen behind each passenger seat.
The company’s airplane display programs are played once for approximately 45 minutes to an hour per flight. Approximately five to 13 minutes of each program consists of advertising content provided to the company by its advertising clients and the rest of the program consists of non-advertising content. The non-advertising content on its planes includes the latest domestic and international news, market updates and sports snapshots and other content similar to that shown on its airport programs. The company also promotes brand names of its advertising clients through its programs by naming its programs after their brand names or displaying their logos on the corner of the screens during the programs.
Other Displays
The company operates approximately 1,370 light boxes in 30 airports. Light box advertisements are static poster advertisements illuminated with back lighting and set underneath its digital TV screens. The company has obtained contractual concession rights to operate 328 digital TV screens and 448 digital frames at the newly constructed Terminal 3 of Beijing Capital International Airport. The company’s new digital frame displays range from 63 to 70 inches.
The company also offers advertisers other media platforms in airports, such as digital frames, light box displays, 360-degree LED displays and 3D displays. It combines advertising content with non-advertising content, such as news, weather, sports and comedy clips, in its digital TV screen programs.
360-degree LED mega display: The company has placed a 360-degree LED mega display screen, which allows for viewing from various angles around the display, in the baggage claim areas of Beijing Capital International Airport and Chengdu Airport. The mega display plays static or dynamic advertising content for 15 hours a day;
3D displays: The company has entered into contracts with 21 airports to place a total of 226 3D displays that play advertising content and specially created non-advertising content repeatedly in 10-minute cycles for 16 hours a day. As of June 30, 2007, the company had installed 122 3D displays in 13 airports.
Digital TV screens on top of newspaper racks: In Guangzhou Baiyun International Airport and Shenzhen International Airport, the company has placed 50 and 70 17-inch digital TV screens, respectively, each on top of newspaper racks, which play advertising content repeatedly in 20-minute cycles.
Variable Interest Entities and Subsidiaries
The company operates its advertising business through its consolidated variable interest entities and their subsidiaries in China, including AirMedia Technology Co., Ltd., Shenzhen AirMedia Technology Co., Ltd., Beijing Shengshi Lianhe Advertising Co., Ltd., Beijing AirMedia Advertising Co., Ltd., and Beijing AirTV United Media & Culture Co., Ltd.
Advertising Clients
The company sells advertising time slots on its network to its advertising clients, including both direct advertisers and advertising agencies. Its advertisers consist of international and domestic brands. The company’s major advertisers, as of June 30, 2007, included Audi, China Mobile, China Unicom, Dongfeng-Citroen, Great Wall Wine, Haier, Hitachi, Lenovo, Lexus, LG, Mengniu Dairy, Nokia, Samsung and Shanghai Volkswagen. The company has a base of international and domestic advertisers in various industries primarily in automobile, telecommunications and consumer electronics.
Suppliers
The company’s major suppliers for its digital TV screens are Hitachi, Qingdao Haier, LG, Samsung and Konka.
Competition
The company’s competitors include advertising companies that operate airport advertising networks, such as JC Decaux, and out-of-home digital advertising networks beyond the air travel sector, such as Focus Media.
History
AirMedia Group, Inc. was founded in 2005.
