CCME: How much CME can generate from Beijing airport buses? another try!
Thanks for Fernando and Ryan for pointing out the data errors and my math or logic flaws in my previous analysis on CME’s airport buses. There are too many variables in that analytic approach, which makes it too complex. I would like to use another approach to make the same analysis. My goal is to have better understanding of CME’s business. Again, I welcome any criticism and corrections on either the data or the logic in my analysis. I hope that I have said everything based on facts.
Based on these factorial calculations, it has to be a miracle that CCME could earned $13.6 million in Q2 from the buses in the four airports CME covered.
1. How many buses are in Beijing Airport.?
Based on the press release[ 1] of CME , there are 229 buses in Beijing airport managed by two bus operators.
2. How many passengers are on these 229 buses?
At least , Some of these 229 buses are on maintenance or idle for backups. To simplify, I assume it runs at full capacity, e.g. all 229 buses are operating all day. Full load is approximately 40 passengers. At one time, 9160 passengers are on these buses, assuming all buses are fully loaded. 6412 passengers are on the buses if load factor is 70%.
3. How many 15 second ad unit could be displayed on the LCD screens of the buses?
CME displays advertisements in ten-minute blocks after every 30 minutes of entertainment content.  And CME charge advertisers by CPM  of 15 sec advertising blocks. We can call a 15 sec advertising as an ad unit.
An airport bus runs approximately 16 hours a day. 12 hours are used to display entertainment programs and 4 hours are used to display ad. A LCD screen can display 960 15 sec ad units a day. This is the maximum advertising that can be displayed on a bus running non-stop for 16 hours.
4. How much does CME charge a 15 sec ad that can reach 1000 viewers ?
3 RMB for a 15 sec ad unit that can reach 1000 viewers
This table lists CPM that CME charged to advertisers in 2008 . The rate for Beijing is 2.14 RMB for a 15 sec ad that can reach 1000 viewers. If we consider the rate hikes in past two years and surcharge for airport buses, I estimate the rate as 3 RMB, which is 40% premium over 2008 rate.
City==== CPM of Advertising on CME’s Network (RMB)
Xiamen === 3.06
Fuzhou === 2.61
Nanjing === 2.58
Tianjin === 2.56
Beijing === 2.14
5. How much money could CME earn from the ads on the buses of Beijing airport each day?
18500 RMB to 26500 RMB
With above numbers, we can easily estimate this now.
Total daily revenue=CPM x ( total ad units) x (number viewers in thousands)
at 70% load: Revenue = 3 RMB x 960 x 6.4 = 18500 RMB
at full load: Revenue = 3 RMB x 960 x 9.2 = 26500 RMB
Please note that above calculation assumes that 1) all 229 buses running non-stop; and 2) all advertising time slots have been sold to advertisers. These are very OPTIMISTIC assumptions.
6. How much revenue could buses of Beijing airport generate for CME in a quarter?
Quarterly revenue= (daily revenue) x 90 days
at 70% load, quarter revenue=18500 RMB x 90=1.665 million in RMB = $0.25 million
at full load, quarterly revenue=26500 RMB x 90=2.385 million in RMB = $0.35 million
CME covers four airports: Beijing, Fuzhou, Guangzhou, Qingdao airports in Q2. Other 3 airports are much smaller. Even if other three airports generate same amount of revenue as Beijing airports. Total revenue is almost impossible to add up to $13.6 million. The difference could not be a rounding error.
2. 2010 10K
3. CPM: cost of reaching a thousand viewers