What Will Happen When Global Satellite Broadcasting Actually Goes Global?

Includes: FMCN, NNNV

On the corporate side, business innovations are brewing, and one example of what’s happening with Global Satellite Broadcasting Corporation's [GSBC] patented technology is the emergence of the out-of-home television advertising network providers, currently being led by Shanghai-based Focus Media (NASDAQ:FMCN).

Going beyond traditional venues of television, billboards and print media, Focus Media has hit gold using GSBC worldwide patented technology, introducing a new advertising model for China: reach office workers and upscale consumers by running continuous television ads on digital displays in the high-traffic buildings and retail outlets that they frequent. The model is not new but the technology is.

The model, however, has not yet caught on in America. The twist to this model in China has been Focus Media China, who built their company around this patented technology that they don't even own. As a matter of fact, the inventor sold it to GSBC and, other than Net.Net Net TV (OTC:NNNV), located in Europe, no other company has been licensed to use this technology. Net Net Net TV paid 1 billion dollars for the license in 43 major European countries.

GSBC will now launch this technology for the entire universe. Making money has never been so easy with this model. It is very easy. You simply sell advertising time using GSBC smart screen technology allowing the advertiser to sell their product by placing their ads in the available 1200 30 second time slots.

The GSBC model is compelling because of the budding advertising market.

"China's ad market is not efficient and is still evolving. There's a lot of wasted money and advertisers are not reaching their market, because newspapers, billboards, televisions are oversaturated."

Focus Media, debuted on the NASDAQ in June and is trading at almost 70 dollars per share. FMCN purchased its rival Target Media for cash and stock making them the largest media company in China. The company now has more than 35,000 displays in its network covering more than 35 cities. In August, Focus Media reported second quarter sales of US$14.6 million, a 128% year-on-year gain. The total number of 30-second ad slots sold on Focus Media's commercial location network in the second quarter was 3,057, with average advertising revenue per time slot [ASP] of US$4,573, versus 832 time slots and an ASP of $6,607 for the same period last year, and 1,998 time slots and an ASP of US$4,721 for the previous quarter. Companies like Focus Media and Target Media can thrive only if GSBC allows them to use the patented technology. The real question for investors who have bought their stock is “will they let them license the technology?"

FMCN 1-yr chart

The downside is, nobody knows that this company will now be required to pay a licensing fee to GSBC or stop using the technology altogether. The real answer lies in the technology and how it is rolled out globally. GSBC will be public before the New Year and will take the world markets by storm. Stay tuned for more information about GSBC by going to its web site or to its strategic alliance partner web site. Obviously, there is much more to come!

Disclosure: Author has no position in the above-mentioned stocks.