VisionChina Media Inc. (the “Company”) (Nasdaq: VISN), one of China’s largest out-of home digital television advertising networks on mass transportation systems, has announced the signing of an exclusive agency framework agreement with Beijing Subway to expand operations of the Company’s mobile digital television advertising network to operational portions of Beijing Subway Line 5, the Olympic Line (which is part of Line 8) and Line 10. A definitive agreement will be signed within 30 days.
Signed on November 17, 2008, the 1-year agreement grants VisionChina Media the exclusive right to operate on three additional subway lines in Beijing as well as on the platforms that service the lines. These three lines together feature 3,792 screens inside train cars and 793 screens installed on platforms in the 47 subway stations that serve the subway lines.
Beijing Subway Line 5, the Olympic Line and Line 10 are the city’s newest subway lines. Line 5 opened in 2007 and the Olympic Line and Line 10 opened just prior to the Olympics in July of 2008. Beijing’s subway system is scheduled for rapid expansion as part of the government’s plan to encourage use of public transportation and ease traffic congestion. In addition to the eight lines in operation, seven lines are currently under construction and work on another three lines is scheduled to begin in 2008 and 2009. Total investment in Beijing’s subway system is expected to reach US$10.8 billion by 2010. By 2015, Beijing is expected to boast one of the world’s largest subway systems with approximately 349 miles of rail lines and a capacity of over 9 million passengers daily.
VisionChina Media currently operates on Beijing Subway Line 13, which opened in 2002, and on the Ba Tong Line, which began operations in 2003. With the addition of Line 5, the Olympic Line and Line 10, VisionChina Media will operate a subway network in Beijing encompassing five out of the city’s eight operational subway lines with a total of 6,505 screens and an average daily audience of 1.78 million commuters. When this audience is combined with VisionChina Media’s bus network in the city, the Company’s screens have a daily viewing audience of approximately 13.21 million people in the city of Beijing alone.
“We are excited to add three additional lines to our subway operations in Beijing,” said Mr. Limin Li, VisionChina Media’s chairman and chief executive officer. “Beijing is a critical market for success in China’s outdoor advertising industry. Tier I cities account for more than 60% of advertising spending in China. The importance of Beijing as an advertising market was made exceedingly clear during the recent 2008 Olympic Games. The Games gave us the opportunity to showcase our network to the millions of Beijing residents and tourists using public transportation. Our broadcast and transit authority partners and advertisers were all thrilled with the public reception of our offerings, giving us a strong position going into the bidding process for these three new subway lines. With a clear leading position in the mobile TV market in Beijing and the government pushing rapid expansion in mass transit infrastructure, we look forward to even greater growth and success in China’s capital city.”
While, VisionChina Media’s contract with Beijing Subway for Line 13 and the Ba Tong Line is up for renewal at the end of 2008, VisionChina Media’s management is confident the Company will be able to continue expanding operations on new lines operated by Beijing Subway while maintaining its presence on existing lines. The Company has been operating on Beijing Subway lines for over a year and has established an excellent track record with the transit operator, evidenced by its ability to secure a contract for Line 5, the Olympic Line and Line 10.
Alfred Tong, VisionChina Media’s chief marketing officer commented, “Increasing our penetration in Beijing will greatly improve the value of our network in one of China’s biggest consumer markets. Media with wide exposure in Beijing garner the interest of all national marketers. We are now the undisputed market leader in mobile TV in Beijing, and the only national player with a solid position in all four of China’s Tier I cities. This successful expansion will bring us new advertisers and allow us to increase our pricing leverage while providing an even more attractive and effective advertising medium to our customers. Incorporating additional lines into our network in Beijing is a testament to our ability to continue to expand on our industry-leading position. We will continue to capitalize on our early-mover advantage and leverage our strength to deliver solid returns for our advertisers.”
In 2007, Beijing’s population exceeded 16 million people. The city’s nominal GDP was approximately RMB900 billion with an urban disposable income per capita of approximately RMB22,000, a real increase of 11.2% from the previous year.