Dr Anita Leung Fung Yee, CEO of QJY, said, “The remarkable performance of the Group was attributable to the operating results of our two business lines – TV drama production and the new advertising business. During the year under review, the Group provided planning, investment, production, distribution and sales services for 287 episodes/hours of TV dramas. All were completed on schedule as planned. Turnover of the advertising business increased by 130% year on year on the back of the QJY cross-media advertising business platform. Our TV channel advertising agency business was a major contributor to our significant turnover growth during the year.”
Dr Leung added that in view of the advantages obtained from China’s entry into the World Trade Organisation (WTO) and the Closer Economic Partnership Arrangement (CEPA), the Group will adopt a dual-core development strategy by building a powerful TV advertising business platform in parallel with its legacy and well established TV drama business. The strong advertising performance of the Drama Channel of Hubei TV, in its first year of operation after Qin Jia Yuan’s acquisition, was a result of our efforts to procure international advertising clients for the channel, to devise advertising placement strategy for it, and to upgrade the packaging and promotion of its programmes. It also validates the Group’s confidence in engaging in the new advertising business line.
Dr Leung points out that Qin Jia Yuan (China) Advertising Company Limited, a wholly owned subsidiary established in Shenzhen in mid-2007, has already moved the Group’s advertising business into high gear across the country and helped the Group to build a TV-focused cross-media advertising business platform. The earnings model of the Group’s advertising platform is different from that of other advertising companies. The Group will not engage itself in the highly competitive advertising creation and production markets, neither will it be content with earning a fixed commission of 1% to 3 % as under the traditional advertising agency business model. Instead, the Group will try its best to acquire advertising assets from TV channels. This strategy will allow the Group to enjoy attractive advertising earning prospects without paying for the infrastructure investments of TV stations.
Dr. Leung explains that acquiring advertising agency rights to TV channels in China is anything but easy. Even after China’s entry into the WTO, QJY has still been one of a few foreign companies that had acquired exclusive advertising agency rights to a number of media entities. In addition to the acquisition of the exclusive advertising rights of the Red Classic Channel of Jiangxi TV Station last week, QJY has already acquired the exclusive advertising rights of four provincial TV channels. The rate card value of all these rights amounts to more than RMB2.3 billion. The success in such acquisitions lies in two factors. First, QJY’s 12 years of experience in providing media services in China, coupled with its good business relationships with TV stations, has strengthened the credibility of QJY. Strategic partners are confident of QJY’s capability to procure international and local advertising clients for the mutual benefit of both parties. Second, the Group’s advertising team now comprises elites from international and local advertising companies. They can provide data analysis, market research, and media and marketing planning services for clients. The Group engages leading advertising companies to run the agency business while working closely with TV channels, combining the best advertising practices and expertise of both worlds to achieve win-win results for TV stations, advertisers and sponsors, viewers and the Group.
In light of the Group’s experience in establishing the advertising agency platform and the record advertising operating results achieved this year, the Group is confident of achieving significant growth in 2008 in terms of the total advertising rate card value managed under the QJY cross-media advertising platform. The Group will strive to increase its share in China’s TV advertising market, which has a value of RMB300 billion (USD 37.5 billion), in the next three years. It will make the Group a cross-media advertising agency giant in China, sharing the vast economic benefits of China’s blooming advertising market brought by the open policy of the country.
About Qin Jia Yuan
Qin Jia Yuan Media Services Company Limited (HKEx: 2366) is a China-focused one-stop shop for TV media services, providing integrated programme, distribution, advertising and marketing and public relations services to production houses, advertising agencies and advertisers. The Group was listed on the main board of the Stock Exchange of Hong Kong on June 30, 2004 following a successful initial public offering. Its strategic shareholders include Aegis Group plc, a public company listed on the London Stock Exchange and one of the world’s five largest media groups.