JVC 2000 Annual Report Download - page 17

JVC 2000 15
AUDIO CDS, VIDEO CASSETTES,
DVDS AND COMPUTER GAMES
JVC is involved in every major
media for entertainment, including
content creation, mastering and
distribution.
HYBRID CARDS (Japan
model)
JVC holds a patent to
this card-shaped optical
disc, which features
areas dedicated to both
playback and recording.
It can be used in a
normal CD-ROM drive.
Growth Supported by the
Age of Content
provide packaging services for editing and creating post-production materials, and our fulfillment operations offer services for
peripheral work generated in content creation, including distribution, delivery, warehousing and printing services. JVC receives
the support of its customers for its efforts to provide exciting services in packaged media for the enjoyment of culture.
Last year, one of our companies in the United States experienced extraordinary growth. JVC Disc America Co., which
develops its own customers, achieved sales and profits that exceeded initial expectations on the back of the favorable U.S.
economy and the hit songs of its client recording companies. Our fulfillment operations continue to grow as one of the top
three businesses in the fulfillment industry in the United States, and we plan to expand the business further. We commenced
fulfillment operations in the United States in 1996, when the PC penetration rate was 40%. Operations were expanded to
provide comprehensive services for delivering PC games created by individuals to customers, for which a distribution
infrastructure did not exist. In Japan, the penetration rate of PCs is expected to exceed 40% this year, leading to a period of
substantial growth for fulfillment operations.
In the audio CD media market in Japan, three powerful alliances are forming, one including JVC, in accordance with
restructuring in the music industry. JVC’s market share in the industry will increase during the current term due to the
Company receiving consignment of Universal Music Group’s media production operations.
The spread of PCs is expected to spur growth in the CD market. With the coming age of the Internet in the United
States, a demand for CDs is anticipated to increase as major Internet service providers distribute connection software on
large volumes of CDs as a means to promote sales. Music distribution via the Internet is creating demand for CD
purchases as mid-age and elder-age groups, which were not a promising market until now, listen to music samples over
networks. This year, shipments of PCs that incorporate CD-R drives, now at approximately 15% of the total penetration
rate, will grow substantially, stimulating significant gains in growth of CD-R/RW media.
Released at the beginning of the Internet age, “hybrid cards” combine both read-only-memory (CD-ROM) and
recordable (CD-R) areas on a single disc. Hybrid cards are being promoted for applications that include electronic
commerce and the clinical records of hospitals. Demand for conventional disc-shaped hybrid discs is expected to
increase as a media for recording game software results.