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Mass Media Ads Revenue Plummets

Beijing Media, the advertising sales unit of the Beijing Youth Daily, has issued a profit warning. It is one of a number of newspapers to report a downturn of advertisement revenue this year. Experts say the downturn is inevitable for mass media. From Shanghai, CRI's Wang Jing has more.

A Merrill Lynch report has predicted the Hong Kong-listed Beijing Media would have an advertisement revenue decline of about 10 percent the first half this year.

Advertisement accounts for over 70 percent of Beijing Media's sales over the first half last year, and about half of the sales was from real estate firms.

Beijing Media has placed the blame on economic tightening measures on the property market put into place by the government, saying it resulted in a significant downturn in the advertising business.

However, Prof. Cheng Shi'an, director of the advertisement department of Shanghai-based Fudan university, says this is because advertisement agents are more mature.

"It is because advertisement agents act more rationally, as there are so many new outlets to choose from, in addition to newspapers, magazines, radio and TV. They need to decide which outlet is more effective."

Beijing Media is not the only one to report revenue decline. The News Business Daily says Beijing's eight major print media reported a 30 percent downturn of advertisement sales in May than in April.

TV advertisement sales are also declining.

But newly Nasdaq-listed Focus Media, whose core business consists of ads run on TV screens in commercial buildings, consider the demand for advertising to have boomed in the Chinese market.

Prof. Cheng Shi'an says mass media is losing its advantage to new media, thus the downward movement in advertisement sales is inevitable.

"Many new outlets are actively targeting a narrower audience. Clearer target audience is appealing to enterprises and advertisement agents."

Shanghai-based Focus Media reported second-quarter net income of four million US dollars, doubling their net income from the previous quarter.

On the other hand, growth in advertisement sales at newspapers across the country has slowed down to six percent over the first four months this year, which is the lowest in years.

 (CCTV.com August 17, 2005)

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