This post is being written for everyone on the deal-team bidding for Focus Media.
It is also been written for everybody who is considering whether to lend the bid 1.5 billion dollars to consummate this deal.
Finally it is being written for Ashish Goyal from Prudential Investments who is Focus Media's largest shareholder and was quoted in the WSJ stating he wanted more than $30 for his shares. [Someone please forward this to Mr Goyal. He seems a reasonable man.]
I just want you to guess the numbers. Don't look them up. Don't calculate. Just guess. Put your guess in the comments - anonymously if you wish.
TV Revenue per screen in the US
There are about 310 million TV sets in the US - roughly one per person. People deliberately watch these for several hours a day. Indeed people sit their family down in front of them to eat dinner.
Their main economic purposes is to show advertisements - the content on them is the lure to get people to sit in front of them.
And there is an enormous industry producing content for them (whose costs have to be covered by advertising). A good part of the city of Los Angeles exists to produce TV content. TV advertising supports the lifestyles of every camera grip and editor and some very large indulgent lifestyles (Charlie Sheen).
TV advertising is still the biggest advertising category in the US.
So take a guess at the advertising revenue per screen. Per month, per year, I don't care. Just guess the revenue per screen.
LCD Revenue per screen in China
Focus Media has about 130 thousand LCD screens - the main format being 17 inch LCDs displaying almost entirely adverts.
The majority of these screens are in elevator lobbies and other low-traffic locations.
Here is a typical screen from a low-traffic area - this one 1030 Hua Min Empire Plaza Shanghai.
Nobody sits themselves down in front of these screens - but they are forced to watch (or at least be around) the adverts when waiting for an elevator.
On the plus side these screens don't waste precious time with content - they just show adverts (which would tend to make them more valuable). And you can't fast-forward through the adverts.
However they are in China where advertising rates (per thousand impressions) are generally lower than the US.
Moreover, nobody sits their family around these screens to eat dinner.
So take a guess at revenue per screen for Focus Media's LCD screens. Per month, per year, I don't care. Just guess the revenue per screen.
Have a look at your guesses.
Calculate the ratio of Focus Media revenue per screen to US Television revenue per screen. Is Focus Media:
* 5 pernent of the revenue per screen of US TV?
* 10 percent of the revenue per screen?
* 25 percent of the revenue per screen?
* 50 percent of the revenue per screen?
* About the same revenue per screen as US TV?
* Double the revenue per screen of US TV?
* Four times the revenue per screen of US TV?
* Ten times the revenue per screen of US TV?
* Twenty times the revenue per screen of US TV?
Please put your estimate in the comments.