As promised we have been crunching numbers again and looking at the likely financial aspects of the recently announced VMG / Clear Channel media sales agreement.
We reckon that within the deal their is a panel inventory which is worth over UK PDS 22 Million (based on a known number of 350 – 400 digital panels).
Here’s our take on how we worked that figure out…
First let’s try and figure out how much each screen / digital panel is likely to cost an advertiser.
Remember with VMG, because they have portrait style 6-sheet digital screens (their Iconic Pods) and NOT TVs hanging from the ceiling we can most PROBABLY compare their screens to traditional posters – perhaps even compare it to Clear Channel’s ‘Premium Panel’ rate card?
Clear Channel would charge UK PDS 653 for a ‘Premum Panel’ in a Mall which gives us a figure to work from (though not use itself).
UK PDS 653 might be a bit high for our calculations, so to be on the safe side and in order to take into account discounting etc. let’s say that a VMG digital panel would average out at UK PDS 400.
In-Charge periods are usually 2 weeks duration. We have been told that there are / will be a maximum of 6 advertisers in any in-charge period (Clear Channel will be selling 10 second slots on the VMG panel network we believe).
Based on that 2 week duration there are of course 26 billing periods in one year.
There are probably between 8 to 10 Iconic Pods in each Mall and each one is double-sided!!!
VMG have 22 Malls operational at present with two more to come on stream shortly – by the way we estimate that VMG will add another 10 Malls to their network by October 2008.
With those figures you can do your own calculations – worst case, best case scenarios etc.
But if we were to take, for the sake of argument…
- 22 Malls
- 16 Digital Panels Per Mall (i.e 8 x double sided Iconic Pods)
- Fully Loaded 6 Advertisers Per Panel (unlikely early days but do’able later)
- 26 week Billing Period
- Average Panel sale of UK PDS 400
That works out at something like a UK PDS 22 Million annual income (STG 21,964,800) from the VMG network based on its size now – again, please note – albeit fully loaded with advertisers from day one!!
That revenue of course would be shared (somehow – we are not privy to the percentages) between Clear Channel, VMG and the Mall operators / landlords / property groups.
Over the 10 year length of the contract that is not an insignificant amount!!!!