CHINA NETWORKS INTL HLDGS LTD (OTC:CNWHF)
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BEIJING, July 21, 2011 (GLOBE NEWSWIRE) -- China Networks International Holdings Ltd ("China Networks" or the "Company") (...
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China Networks Intl Holdings came public via a share exchange transaction with a blank check company.

China Networks Media is a television advertising company formed in 2007 for the purpose of investing in, consolidating, expanding and streamlining PRC television advertising assets in partnership with municipal and provincial level TV stations. In June 2008, CN Media raised $28 million in a private placement for the consolidation and operation of the advertising operations of two television stations: Kunming and Yellow River.

According to publicly-available information, China’s total advertising spend in 2007 of approximately $16 billion represented 33% of total worldwide spend, ranking fifth overall in total spend. Industry experts project that China will experience a compound annual growth rate (“CAGR”) of 17.33% from 2007 to 2010, which is nearly 4% higher than the next fastest growing advertising market among the ten largest markets, which is Brazil, and nearly triple the worldwide average of 5.97%.

China’s Advertising Spend by Category ($ million)

   
2005
    
2006
    
2007
      
2008E
      
2009E
      
2010E
  
Advertising Spending: ($ million)
                                          
TV
    
4,670
      
5,311
      
6,187
      
7,826
      
8,452
      
9,128
  
Newspapers & Magazines
    
3,693
      
4,426
      
5,152
      
6,094
      
6,385
      
7,343
  
Radio
    
511
      
752
      
876
      
1,074
      
1,181
      
1,287
  
Outdoor
    
1,655
      
1,890
      
2,202
      
2,678
      
3,348
      
3,850
  
Internet
    
535
      
927
      
1,606
      
2,618
      
3,553
      
4,598
  
Cinema
    
20
      
22
      
26
      
29
      
32
      
37
  
Total
    
11,084
      
13,327
      
16,049
      
20,319
      
22,951
      
26,243
  

Source: Advertising Expenditure Forecasts (2008.06), ZenithOptimedia p. 51

In the television advertising sector, China has not demonstrated the same weaknesses currently affecting the United States and Western Europe, namely the trends towards personal video recorders and other time-shifting devices, migration of viewers from premium mass-audience channels to cheaper specialist channels and competition from the internet. As a result, China’s television advertising industry has grown rapidly in recent years and now comprises 38.5% of the total advertising market, representing approximately $7.8 billion in 2008, according to industry reports. China’s television advertising market has developed significantly over the last decade, and is expected to continue to grow in the coming years. By 2010, China’s television advertising spending is projected to reach US$9.1 billion according to industry reports, implying a CAGR of 13.8% from 2007 to 2010. This compares favorably to growth of 8.2% in Hong Kong, 4.9% in Korea, and 1.5% in the United States.

Last updated June 29, 2009


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