Analysis Of China's New Media Advertising Enterprises Financing Difficulties And Solutions

Media advertisement industry in China not only has a great potential but also has been growing fast. The degree of shuffling and changes that took place in media industry in last 3 years compared to prior 10 years is a lot. Hosting 2008 Olympic has opened the opportunities for media advertisement industry to develop and to attract investments like never before. In order to expand and to advance in media industry a large amount of investment is needed. Media development needs to be accompanied by increase in investment that supports intrinsic need. The key to proper development is utilizing a large investment appropriately in media advertisement.Due to earlier introduction of capital market to other industries and their several years' experience in this field, now initial foundation is in place. The channels to financial investment are continually maturing. However, media advertisement industry only recently entered capital markets. Due to the special characteristics and perspectives, media industry has been insulated from the capital market for a long time: reasonable utilization of capital market and ensuring safety and benefit. It is not only necessary for the industry to try their best but favorable government policy, support and lead is also needed concurrently. New media advertisement industry is newly emerging and developing sector where venture capital became the main financing channel. Due to immature market and government policies and measures, industry's only financing channel, high capital, financial predicament became a condition for new media advertisement industry's main element in development. This paper will address current issues in active venture capital involvement in new media advertisement industry: the reasons for financial predicament and looking for solutions, abundant financing channels with obstacles, quest in new economy, and the new perspectives on the new emerging financial market system.The following paper is divided into five chapters.Chapter 1 - Introduction to new media, new media advertisement and two ways to finance both types of industries: internal and external resources and theory of financing groth period, looking at the financial structure of small and medium size enterprises in the US. The focus will be on the concept of venture capital's characteristics and process.Chapter 2- Introduction to the current financial situation of China's new media advertisement industry. Looking at the reasons for internal and external financial predicament.Chapter 3 - Define internal and external financial resources. To look at detailed analysis of China's new media advertisement industry's response to financial predicament and solutions. Internal channels include: establish clear payment method, strengthen marketing skills and competitiveness, re-position enterprise development strategy, adjust enterprise development measures and directions, increase fund utilization rate and strengthen enterprise's own financial support. External channels include: active development of new financing system and new procedures, appeal to improve financing environment, establish strong banking system for emerging market service, develop and mature venture capital market, abundant venture capital channels, standardize new media advertisement industry's financial market, stabilize and place laws governing financial market.Chapter 4 - A brief analysis of SM's financial predicament and propose ways to resolve issues: to adopt financial lease to increase assets needed for new media, to adopt consolidation of mortgage, to receive bank loans, strengthen enterprise's internal business management and its ability to self govern, change company's capital structure, to adopt advertisement industry fund: change enterprise's development strategy and adjust development approach.Chapter 5 -Summarized the current financial predicament and propose ways to resolve issues via SM case study.