HK agency to sell China TV ad slots
Hong Kong-listed advertising agency Qin Jia Yuan Media Services has formed a joint venture to sell prime-time television advertising slots in five mainland provinces, in a deal the company expects to generate revenues of more than $80 million.
'The company would like to build a nationwide network of such ventures with more than 100 television stations,' chief executive Anita Leung Fung-yee said at a press briefing yesterday.
Ms Leung added that the company was the first 'outsider' to secure exclusive prime-time advertising rights from provincial mainland television stations.
'We don't want to operate television stations in China. We only want to earn money from the huge television advertising pool,' she said.
To secure such deals, Qin Jia Yuan - which also produces television programmes - is prepared to provide the stations with drama series in exchange for exclusive rights to prime advertising time slots. The company estimates that 30 to 50 per cent of its revenue can be generated this way.
Qin Jia Yuan's joint venture with advertising agency Tianjin Qin Jia Yuan will be formalised later this year. Qin Jia Yuan will make a cash contribution of $38 million, while the Tianjin company will contribute its advertising licence and some long-term contracts to the joint venture. The Tianjin partner will also be responsible for securing advertising rights on various television stations in the provinces.
The joint venture will start its business dealings with television stations in Hubei, Hebei, Jiangsu, Heilongjiang and Guizhou provinces.
However, the venture is not without its critics. 'This type of advertising model may not be as attractive as the company makes out,' said one analyst. 'If the model is so efficient, why have other foreign firms not entered the market?'