Towona Media Q2 revenue grows 80%

Towona Media Q2 revenue grows approximately 80% YoY and 60% QoQ. Earnings from key accounts increase even stronger, up 190% YoY. And the quantity and quality of customers achieved major leap. TOWONA’s investors and shareholders are very satisfied with the corporate achievements by the current management team.Towona’s Q2 financial results undoubtedly boost the morale of employees and excited the mobile TV industry.

“This is the golden period since Towona’s inception. The strategic transformation has been proved successful as the growth in Q2 demonstrated,” comments Gareth Chang, chairman and CEO of Towona media.

Analysts view this increase to be very remarkable, especially during this harsh period when the ad market at home and abroad is in recession. As a leading operator, Towona’s excellent financial results indicate the advent of a growth time for the mobile TV operators who possess advantageous resources; on the other hand, it shows that the company’s effort for retaining local customers and focus on key accounts is rewarding.

Over the years, Towona has been well-known for the solid and steady development, the number of clients topping the industry, a powerful regional marketing team in particular. Its subsidiaries have been extensively recognized by the local clients thanks to accumulated experience of marketing and resource maintenance.

In order to further demonstrate the advantage of nationwide network resource, realize the value-added network effects and magnify the efficiency of resource utilization, Chairman Chang took a series of actions, including introducing stream-lining management and operating concepts applied by international and domestic media, changing the traditional view on Mobile TV, emphasising the outdoor TVs nationwide network, establishing the mobile TV audience measurement with Nielsen media research to upgrade the mobile TV to mainstream media and meeting the severe measurement demands from key accounts. In addition, he established and reinforced the key account marketing and support departments to fully elevate the value of the mobile media, and formed a key accounts marketing network with Beijing, Shanghai, Guangzhou and Chengdu as the cross-marketing center under the unified management by headquarter. Meanwhile, the company implemented close cooperation with 4A agents and improved professional services.

These significant adjustments have generated obvious effects. According to the finance results in 2009 Q1, the number of key accounts hit 50% YoY, while the Q2 reports a robust growth of 190% YoY. “Towona earnings no longer just depend on its local advertisers, key accounts have become the new growth engine,” Chairman Chang notes.

The adjustment to resource layout also serves as an important initiative taken by Chairman Chang. He said: “resources exist for the very purpose of promoting sales and thus making profits, which is the sole criterion to retain or remove.” A series of drastic resource optimization in Towona are based on such concept. “Cost and benefit are always the two major themes for company management; cost reduction and revenue increase led the company onto a healthy and sustainable development path, and now we hope the company could continue to accelerate its growth.”

As regards to the resources, Chairman Chang continued: “the development of mobile TV in metropolitan cities has encountered a bottleneck because the economic growth in major cities such as Beijing, Shanghai and Guangzhou has slowed down during the financial crisis, together with the intense media competition. However, many regional economic hubs such as provincial capital cities and coastal cities still maintain a relatively high growth from the stimulus policy of expanding domestic demand of China. Therefore, we could maintain regional media competitive advantages in these 2nd-tier cities. More and more clients incline to place advertisements in these regional core cities in order to optimize the performance-price ratio. Therefore the resources of Towona are forward-looking and practical, which best fit the regional centers. This is the key reason to our rapid growth.”

During the recent 2009 China Brand and Communication Forum, Towona, as well as other famous new media, Baidu, for example, won the New Media of Distinguished Contributions Prize and Chairman Chang was honored as a Top 10 Chinese Media Contributor, which represents the industrial recognition for the excellent performance of Towona.

Regarding the industry development, Chairman Chang commented: “at present, there is mature understanding on the bus mobile TV. Many clients have changed from the initial trial ad placement to regular ad placement. From the perspective of industrial cycle, the bus mobile TV is developing rapidly. The process of market fostering and direction has basically completed and the market is expected to keep fast growth in the coming 2 or 3 years. During the economic recession, the advertisers will not only cut budget, but also try to maintain high exposure to large-scaled audience, which is a great opportunity for cost-effective mobile TVs to expand market share. This is an important reason why we focus on in-bus mobile TV. We are not optimistic about the future of subway mobile TV and taxi mobile TV as the former suffers from low market maturity, technology maturity and poor media picture quality and sound effect, and the latter is largely influenced by policies.” He added: “commitment and professionalism are the two primary principles for a successful company.”

As to merger and acquisition, Chairman Chang seems to be much confident: “we have capital, an excellent management team and a sound business model, preparing for long term growth. Meanwhile we will not exclude any close cooperation or merger opportunities that are conducive to company progress, because the survival of mobile TV depends on whether a company could possess local advantageous resources and achieve healthy development. Hence, we are making more efforts to expand into other strategic cities to sharpen our competitiveness while consolidating businesses in cities where we have advantageous resources. So far, we have been devoting ourselves to self-improvement and capacity-building. The company is operating healthily, enabling us to play a key role as domestic industry integrator. We will respond proactively to the call for cooperation from international and domestic media groups. TOWONA roots on independent, healthy and rapid development, which is well proved by the Q2 financial report. All staff, from employees to top management, are confident to create a new successful media enterprise.”

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