Carlyle to invest in Shanghai media firm
By Sun Min (China Daily)
Updated: 2004-09-07 09:48

Global investment agency Carlyle Group has invested US$15 million in Target Media Holdings Ltd, a Shanghai-based media company.

Wayne Tsou, Managing Director of Carlyle Asia Investment Advisors Ltd, who undertook the investment project, said that the investment was based on the market potential of the media business in China as the economy continues to boom.

What attracts Carlyle most is the new business model of Target Media, and its leading position in its core business, he said.

And if the co-operation proves to be satisfactory, Carlyle might add more investments, he said.

But Tsou did not reveal the exact stake Carlyle holds in the media company.

Target Media, the owner one of the biggest commercial building video advertising networks in China, is also planning an initial public offering (IPO) in NASDAQ in the first half of next year.

Yu Feng, President and Chief Executive Officer of the media company, said on Friday that the IPO scale should be no less than US$150 million and the listing is expected to be realized in the first half of 2004.

"We are making relevant preparations as scheduled, so we should be able to meet the timeline," he said.

Target Media entered the narrowcast video advertising business at the start of 2003, yet its networks already cover about 10,000 commercial buildings in more than 30 domestic cities, showing advertising of high-end products on liquid crystal displays in sites like aisles and the sides of lifts, with a daily audience of 25 million people, company sources said.

A number of multinationals and big Chinese companies have already become customers, including auto companies such as BMW and Audi, electronics firms such as Siemens and Canon and financial institutions such as HSBC and Bank of China.

In Shanghai and Beijing, where there is a higher proportion of big companies, Target Media is already making profits, company sources said.

Yu Feng said that the company will target wider coverage in the future.

He said it is hoped to expand the coverage of narrowcast video advertising to 40 cities. Apart from commercial buildings and hotels, outdoor and indoor locations such as petrol stations and supermarkets, where target audiences gather, are future target areas.

Narrowcasting in public places is a growing trend in advertising. Compared to broadcasting, it means delivering specifically targeted and customized messages to audiences in public locations at scheduled times.

Tian Tao, general manager of Central Television Research, a media market researcher, said that narrowcasting's business model enjoys greater attention from target audiences during their spare time and therefore offers clients a more economical and efficient means of advertising.

And information delivered this way enjoys both higher quantity and quality, he said.

The business is also new in China which, with a big population base and fast-growing economy, has big market potential for media companies.

It has been estimated that the market of commercial building video advertising will reach 1.5 to 2 billion yuan (US$181.2-241.5 million) in the next three to five years in China, yet the number of competitors in the sector is very limited.

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