JVC 2003 Annual Report Download - page 30

Victor Company of Japan, Limited
28 Annual Report 2003
Movie Release
Dawn of a New Day—The Man Behind VHS
How JVC invented the VHS video
Hit CDs (from left)
SMAP:
MIJ
Keisuke Kuwata: Top of the Pops
MINMI: Miracle
Popular DVDs (from left)
SMAP:
Clip SMAP
Keisuke Kuwata: Keisuke-san Video mo Iroiro to
Taihen ne
UA: Sora no Koya
Toshiaki Shibuya
President & Chief Executive Officer, Victor
Entertainment, Inc.
changing this approach. Our goal is to
create a structure that generates earn-
ings from a large number of medium-
scale hits by accurately managing the
breakeven point for each release. Ac-
complishing this will depend greatly on
our ability to acquire content rights to
generate future profits. This is why we
plan to increase investments in Japan
and overseas for locating promising art-
ists at an early stage in their careers.
Mentoring their development will give us
a growing range of rights to distribute,
a process that will directly translate into
higher sales and earnings. Our unique
JVC corporate culture gives us enor-
mous advantage here. We offer artists the
support of a globally respected brand,
a producer of recorded and recordable
media, and a manufacturer of quality
audio and visual products. We will
make full use of these attributes to
heighten Victor Entertainment’s profile
as a source of total entertainment that
creates dreams and excitement for
people worldwide.
Our Objective: Becoming a “Matrix
Music Company”
During the past fiscal year, Victor
Entertainment established a more
profitable operating structure by low-
ering the breakeven point. The main
factor was a change in the company’s
SOFTWARE BUSINESS
Victor Entertainment, Inc., a wholly
owned subsidiary, is the nucleus of
JVC’s software operations. This
company’s mission is
to make people
happy through music by nurturing a
“human network” that creates dreams
and excitement.
The company’s stable
of performers includes many well-
known Japanese artists. Maximizing its
library of music content, Victor Enter-
tainment produces and promotes high-
quality, highly marketable products. To
increase earnings from content rights,
the company actively searches for
promising artists and nurtures their
development.
Raising Earnings by Leveraging
Software Rights Assets
The majority of sales and earnings in
the software business are derived from
music sales through various channels.
Selling our own content is just one part
of this business. We are also Japan’s
leading distributor of music and video
software, thanks to our extensive library
of JVC-produced content, as well as
deals with content partners to supply
independently produced material. For
many years, marketing activities for the
software business were structured to
support mega-hits that break through
the one-million mark. We are currently
employment structure to enhance pro-
ductivity. Also, with a greater degree
of concentration on music content busi-
ness, we rely less on sales of other pre-
recorded software. Now we are shifting
to matrix style operations to boost earn-
ings. Here, the greater proportion of
earnings come from content created by
a “human network” of professionals
and artists we manage as well as their
JVC-controlled publishing rights. We
maximize these assets in many ways:
sales of compilation albums and other
recorded media featuring our own
artists; Internet music distribution
services; artist management; music
publishing; and much more. Opportu-
nities for new businesses exist as well.
Through alliances and joint ventures,
we will create new markets and effec-
tively demonstrate our diverse
strengths.