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 Our Achievements(2)---Key Policies of the Current Fiscal Term |
Improving Profitability through Structural Reform of the Broadcasting Services.
In the broadcasting services, which has been our mainstay business since the company was established, ensuring stable profits remains an important issue. During the current fiscal term, we implemented the following policies in order to further strengthen our profit structures.
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Cables Removed from 2.4 Million Utility Poles |
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The broadcasting services essentially has a high-profit structure, and it is possible to enhance profits by controlling SGA expenses. Accordingly, during the current fiscal term, we removed cables from 2.4 million utility poles in regions with low population densities and switched to music distribution using communications satellites, thereby slashing facility use costs.
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| Promotion of digitalization project |
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Sales Costs Reduced by Consolidating Sales Offices |
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By switching to broadcasting from communications satellites, the territory that requires cable maintenance was reduced and work loads cut. In conjunction with these changes, the number of sales offices was also reduced (we had 192 sales offices at the end of the term). |
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Individual Customers Cultivated |
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We made efforts to acquire new individual customers, and we were able to make up for the decrease in retail customers by increasing the number of individual customers. |
Clarifying the Distinction between Core Businesses and Complementary Businesses and Concentrating Management Resources
Under our current business structure, we have positioned broadcasting services as our mainstay business, broadband as a future core business, and the remaining business domains as complementary businesses. Within the process of repositioning each business domain, we implemented the following measures.
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U's BMB Entertainment Corp., a USEN group company, merged with Taikan Co., Ltd., a dealer with an extensive sales territory, and also acquired the karaoke business subsidiaries of Pioneer Electronic Corporation and Clarion Co., Ltd. As a result, we were able to create an integrated structure for the karaoke business within the group and achieve efficient operations. |
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| U's BMB Entertainment |
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U's BMB Entertainment is a group company that engages in sales and leasing of karaoke-related equipment and operating the U-bou karaoke establishments. |
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The assets and our directly-managed U-bou karaoke establishment business and karaoke sales equipment business were transferred to U's BMB Entertainment and its subsidiary U's BMB Standard, respectively. |
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| Karaoke U-bou |
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U-bou is a karaoke establishment chains, combining karaoke services in private rooms with food and beverage services. There are currently 80 locations in operation nationwide, and all locations enjoy the solid support of karaoke fans. |
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The Netprice Mall, a shopping mall website that was a part of our Internet services, was transferred to Rakuten, Inc. In the future, we expect further sales cooperation from Rakuten with respect to the broadband business, a future core business. |
| Netprice Mall |
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The e-commerce market in Japan is expanding rapidly, as is the number of new market entrants. Netprice Mall is a tool that easily provides the systems needed to create e-commerce sites at low cost and has already been adopted by numerous businesses. |
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| Rakuten, Inc. |
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Japan's largest e-commerce mall is Rakuten Market, which is operated by Rakuten, Inc. Rakuten Market currently boasts approximately 13,000 companies under contract (as of October 2003). |
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Improving Our Financial Status |
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| We improved our financial status through the following measures. |
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In orderp to procure the capital needed until the broadband business becomes profitable, we implemented an allocation of new shares to a third-party worth a total of ¥10 billion for U's Communications Corp., a group company. The shares were acquired by Sony Communications Network, ITX, SKY Perfect Communications, and other business partners. |
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Karaoke establishment operation, the karaoke equipment sales business, and the karaoke music transmission service business were transferred to U's BMB Entertainment for ¥15.1 billion. |
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Convertible-typed bonds with warrants were issued for ¥5 billion and underwritten by Deutsche Bank. |
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