Press Conference by Chairman & CEO Hiroshi Hayakawa and President Shinichi Yoshida(Outline)

March 31, 2015


Hiroshi Hayakawa, Chairman & CEO
Shinichi Yoshida, President
Masaya Fujinoki, Executive Director in charge of Finance Division, Corporate Strategy Division, & Compliance Audit Department
Gengo Sunami, Executive Director in charge of Business and Administration Division Takashi Hirajo, Executive Director in charge of Programming Division

General Review of this fiscal year 2014 and Plans for this fiscal year

Hiroshi Hayakawa:

I will begin my review of the fiscal year 2014 with the audio ratings. The count of annual ratings has closed and our final result was 2nd place for all-day, golden-time and prime-time and 1st place for prime-2. On year-on-year basis, TV Asahi had the biggest loss and the difference with the top increased as well. We were a very competitive runner up in the audience rating race competing for the top position in 2012 and 2013, but I think the reason for our slowdown in 2014 lies in our losing points in our entertainment programs such as variety shows which used to be our point boosters. But we have managed to turn around the sluggishness of the first half and kept the runner-up position with our smash hit dramas that started in fall; gAIBOU: Tokyo Detective Duo-Season 13 g and gDoctor-X `Surgeon Michiko Daimon g. The slowdown in audience ratings directly affected our sales results, and the sales result for the fourth quarter slackened heavily. We expect the total sales to underperform the initial forecast for the year. Announcement of financial statements will be made in the beginning of May.

We gave the status of growth business to the concept of gMedia Cityh and I could feel its great potential this year. Our vision of the gMedia Cityh consists of EX THEATER ROPPONGI, our headquarter building, and Roppongi Hills, and we held gSummer Festivalh as its first event, which was a big success with 4,450,000 visitors. In the present era of the Internet, it was a very fruitful success for us, as it has given us hands-on experience that there is a good chance of making a business chance with real events if you are creative enough.

Another topic Ifd like to mention, gStand by Me Doraemonh the film we invested in. It became a blockbuster with the total revenue of over 8.3 billion yen and its international distribution is also going well. The TV series gDoraemonh expanded its market to a cable channel in the U.S. as well, so our international distribution business of TV programs and formats is also doing extremely well. The key factor behind the blockbuster hit of gStand by Me Doraemonh was a collaboration with a powerful creator, and we will continue our challenges by working together with the network of our highly valued creative partners.

We have finished the first year of our management plan. The management plan consists of the integrated programming of three waves: terrestrial TV broadcasting, BS (broadcast satellite), and CS (communication satellite) in our core business of broadcasting, and our growth business related to the Internet and gMedia Cityh. And I would like to talk about what we have been preparing behind the scene throughout this year in the Internet business. We have been exploring prospects in the Internet business to function as a core of our growing business and now we have decided to establish new companies to operate businesses that take full advantage of the power of CyberAgent in development and management of smartphone services and the power of TV Asahi in high-quality production and archives of visual contents.

One of the companies is called gAbema TVh which manages a video distribution platform business where contents are supplied from several special video channels of various genres. We have developed a system of subscription based video distribution service by creating our native application catered to smart-devices including smartphone and tablets, to which we distribute videos provided by the cooperation of content providers of all genres and our affiliations including terrestrial, BS and CS stations. And we will also launch a new company that operates a news channel, a channel devoted to news. The channel will take full advantage of CyberAgentfs proven skills in business management and resource developments together with TV Asahifs know-hows in newsgatherings and program production. The capital of gAbema TVh will be 300 million yen and it is scheduled to be launched by the end of April. President Fujita of CyberAgent will take the chair of the president and I will also serve as a part-time director. The capital contribution ratio will be 60:40 (CyberAgent: TV Asahi). The content of its business is what I have just told you. The news channel is also scheduled to be launched by the end of April with a capital of 50 million yen. President Fujita will take the chair of the president and Mr. Sunami, an executive director of TV Asahi, will serve as a part-time director. The capital contribution ratio is 51% by CyberAgent and 49% by TV Asahi.

I hope you will take what I have just told you as our goal for the fiscal year of 2015. While we have been working on them, we were also active in pursuing our business abroad and we have been able to establish a new starting position for our business strategy in the Asian region. The strategy involves cooperation with the media conglomerates in India and Thailand. We have already worked on existing business with Kantana of Thailand in the past, and recently we have worked together with the gKantanah group with a gCool Japanh project, a project to introduce Japan worldwide led by the Japanese government, and since then, we have been building up our relationship with them through the distribution of our contents of professional wrestling and gCrayon Shin-chanh in Thailand. And with Zeel in India, we have agreed on an overall cooperation. These two companies have their broad networks across Asia, and we hope we will have stronger footholds in developing our businesses in the entire Asian market with their cooperation. We have a news bureau in Bangkok as our base for such Asian business strategy, but now we will launch our business bureau in Bangkok to nourish and further develop the cooperative relationships with the two companies.

Now, with all these projects moving ahead, although the two that I just mentioned are positioned as our important strategies, our major challenge, more than anything else, for this coming new fiscal year is to improve our audience ratings. The environment of the TV media is extremely tough with the worst record of HUT for golden-time and prime-time. What kind of timetable can win the audience rating race? We will pursue the answer to this problem by thinking through and examining such strategy thoroughly and will continue our challenge to win the race.

And at the same time, we are looking forward to a dynamic development of the Internet businesses including the above mentioned video distribution service. In order to tackle these challenges, we have executed 23 mid-career recruitments in the past year. The recruits are expected to become a driving force in the integration of programming and business. All of them will join us on April 1, and together with 32 new graduates, we will have 55 fresh staff members in all.

From an overall point of view, we have faced various challenges in this first year of a holdings structure. The business results were indeed one of the challenges, but we were also faced with the problems regarding broadcasting ethics and the safety control of the program production phase. We are taking these problems seriously and we will face the start of our second year of the Management Plan with well-focused concentration.

If I may add a supplementary comment regarding the corporation with CyberAgent, we have had a long and friendly relationship that we have nourished through personnel exchange and contents development projects. We have agreed with each other to put our respective strengths together to operate the business. However, we know that they are the professionals in the field of the Internet business, so we will carry out our role as we learn more about the business from them. In this respect, we are very grateful to President Fujita and there is no inconvenience on our side with the business scheme of CyberAgent taking the leading role here. We will take this opportunity to learn and gain more knowledge about the Internet business.

Audience Rating Update:

Shinichi YoshidaF

I would like to give you the outline first. As for the audience rating for the last quarter starting from this January and ended last week, we were placed second for golden-time, all-day and prime-time. We have had successful programs including gDoctors: The Ultimate Surgeon: Season 3h aired on Thursday drama slot and gThis is the key!! Akira Ikegami's News Academyh, and we were able to steadily maintain our number 2 position, which in turn has placed us the second for the second half of the fiscal year as well as for the fiscal year as a whole. Though there are still much to catch up with the number one station, the fact that we were able to end the FY in the number 2 position will give us momentum to move onward and as we enter the first week of the new FY, I hope this FY will be the year for us to come up much closer to the number 1 station.

Takashi Hirajo:

I will report on the details of the audience ratings. The FY 2014 has come to an end, and we are placed 2nd in all-day with 7.1%, 2nd in golden-time with 10.9%, 2nd in prime-time with 11.3% and the first in prime-2 with 7.3%. We have ended the fiscal year in 2nd place for all-day for the 5th time since the launch of our station, and also it is the third consecutive year to hold the position. For golden-time, we ended in above 2nd place for the 3rd time since the launch of the station, making it the third consecutive year to hold that position. For prime-time, we ended in above 2nd place for the 5th time since the launch of the station, and it is also the third consecutive year to hold that position. For prime-2, we have ended at the top for ten consecutive years.

I will now look back on the programs of FY 2014. Firstly, among our serial dramas, gDoctor-X: Surgeon Michiko Daimonh, featured in the Thursday night drama slot aired in the third quarter achieved a very high audience average of 22.9% throughout the term. It won the top audience rating of all the serial dramas aired in 2014 by all broadcasters in Japan. AndgAibou: Tokyo Detective Duo Season 13h aired from October on Wednesday night at 21:00 also achieved a successful average rating of 18.3% for the fourth quarter. Its average ratings for the third and fourth quarters is 17.4%, which is the 4th highest rating (tied) for the season in the history of the gAibouh series. Other dramas did very well including gDoctors: The Ultimate Surgeon |Season3h featured in the Thursday drama slot that achieved an average rating of 14.4% for the fourth quarter, gBorderh aired in the first quarter, and gWoman in the Crime Labh. And our regular non-scripted programs such as gCream Quiz Miracle 9h and gSUGOI Japan! Through the Eyes of Foreign Expertsh starting from the third quarter came up with good and steady audience ratings. Our special programs have achieved successful ratings as well. The special programs that contributed high ratings include gBeat the Champions g, the special program featuring Akira Ikegami (gAkira Ikegami Year-end Special: Will this yearfs news stay in history? Understanding 2014 by comparing now with the pasth) gGood Luck on a No Manfs Islandh, and hNews unknown to Takeshih (tentative English title).

As for our news and information programs, gHodo Stationh achieved the average rating of 12.7% for the fourth quarter, which was the highest in a year and the average rating for the fiscal year was 12.4%. gSuper J Channelh achieved the fiscal year average of 8.2%, which was the 4th highest in the history of the program and it is their third consecutive year to mark the average rating of more than 8%. gParadise in Lifeh aired on Saturday at 18:00 achieved a record breaking fiscal year average of 10.9%, which marks the highest in the history of the program.

As for our sports programs, gFIFA World Cup 2014 Brazil, Japan vs. Columbiah in June achieved a very high rating of 37.4% and the gAFC Asian Cuph series aired in January also achieved successful ratings. And our coverage of figure skating events, gISU Grand Prix of Figure Skating 2014 Chinah and gGrand Prix of Figure Skating Final 2014h aired in the prime-time also achieved very successful ratings.

The overall results of average audience ratings for the second half of the FY are: 7.2% for all-day, placing us second; 11.7% for golden-time, placing us second; 12.0% for prime-time, placing us second; and 7.4% for prime-2, placing us at the top. The rating positioning for the second half of FY are the same as those of the entire FY.

As for the fourth quarter, it also ended with the good ratings; 7.3% for all-day, placing us second, 11.7% for golden-time, placing us second, 12.0% for prime-time, placing us second, 7.4% for prime-2, placing us at the top. Now that the fourth quarter ended, I would like to make a brief report on its overall results. The average rating of gAibou: Tokyo Detective Duo Season 13h for the quarter was 18.3% and its last episode of two hours special ended with a great success recording 20.3% which was the highest in the season and also the highest in two years. The average rating of gThe Ultimate Surgeon -Season 3h featured in the Thursday drama slot was 14.4% for its nine episodes. The two programs, gAibou: Tokyo Detective Duo Season 13h and gThe Ultimate Surgeon -Season 3h were the 1st and the runner up respectively among all the prime-time drama series aired by all TV stations in the fourth quarter. A non-scripted program, gThis is the key!! Akira Ikegamifs News Academyh (tentative English title) achieved the average rating of 14.0% for the quarter, and it which will be revamped and shifted to Saturday at 20:00 from April. Other programs that deserves to be mentioned for their contributions for the quarter include gCream Quiz Miracle 9h, gHodo Stationh, gQuiz Presentation Variety, Lord Qh, gParadise of Lifeh, gThe Saturday Night Mysteriesh, gThe Sunday Entertainmenth (tentative English title), all of which have achieved over 12% ratings.

Highlights of New Programs:

Takashi Hirajo:

I will talk about upcoming programs and their broadcasting schedule. First of all, gISU World Team Trophy 2015h will be held from April 16 to 19. We can expect excellent results in this international team competition featuring Yuzuru Hanyu, Takahito Mura, Kanako Murakami and Satoko Miyahara. We have a strong lineup of regular dramas for April. First, a Thursday drama, gIfm homeh in which Takuya Kimura will play the leading role in a weekly drama at TV Asahi for the first time. The casting for the drama is star-studded including Aya Ueto. It will start on April 16. We will present gNew Tokyo Metropolitan Police First Investigation Unit 9 - Season 10h featuring Tsunehiko Watase, Yoshihiko Inohara and other familiar members. It will start on April 22. At our prime-time slots, we will launch four variety shows: gCream Stew Presents What Only 30% of the Japanese Population Know. Be Proud if You Know Ith (tentative English title) will start at 18:57 on Sunday, April 5. gStunning Revelations - A Variety Show by Real Buddhist Monksh (tentative English title) which has caused a big buzz as our late night show will start as a prime-time show on April 6. gAwry Teacher`Learn from My Mistake!h (tentative English title), which also was our buzz-causing late night show will start as a prime-time show on April 20. And as mentioned before, our program featuring Akira Ikegami will be revamped and start as a prime-time show on April 11. Furthermore, a new program featuring Matsuko Deluxe, gStrolling Streets at Nighth (tentative English title) and others scheduled for Neo Variety 2 slots are very promising. We have many more exciting programs, but I wonft go into those details today.

Sales Results:

Shinichi Yoshida:

I will talk about the sales results for February. The year-on-year sales results for the month of February are 91.8% for time-sales, 78.3% for spot-sales, making the total sales of 84.2%. As for time-sales, it didnft reach the level of last year when we had the special programming for the Sochi Olympic Games, but we were able to realize the goals by our successful sales of regular and special programs. On the other hand, as for the share of spot-sales of the 5 TV stations, it went down considerably compared with last year due to bad market conditions. The year-on-year sales results for the month of March are 86% and more for time-sales, 92% and more for spot-sales, making the total sales of the Sales Division to shift around 90% and more as of now. Time-sales wonft reach the level of last year as we donft have any large scaled one-off drama scheduled this year while we had the 55th anniversary special, the two-straight night drama gMiyamoto Musashih last year. As for spot-sales, it picked up slowly with the unspent budget and other factors, but it wonft reach the level of last March when the market was thriving with the last-minute demand before the hike in consumption tax.

I will talk about the sales results through the year briefly. Time-sales will surpass the level of last year. But as I reported now, since the level of the second half of the year falls behind that of the first half, spot-sales wonft reach the level of last year that marked the best record in our history. However, spot-sales have already reached well over 100 billion yen. It is the 3rd time in our history to surpass this amount and the 2nd best sales in terms of ranking, second only to last year. We will report the details in our financial statements in May.

I will now talk about the sales of the first month of the new fiscal year April. Currently, the year-on-year sales are shifting around 99% and more for time-sales, 80% and more for spot-sales, making the total sales of the Sales Division to 88% and more. The sales for the April programming reshuffle are going steadily led by the dramas which recorded high audience ratings in the last second half of the year. As for a one-off programming, we have been working hard in the sales of gISU World Team Trophyh which will be aired from April 16. Our spot-sales made a slow start as there are less buying activities in general from the field of businesses that we normally do well with. We will work on more active promotion and increase our sales one by one.

Special Events and Revenue from Non-broadcasting Business:

Gengo Sunami:

First, I will talk about the business of special events. A large-scale special exhibition commemorating the 400th anniversary of Ieyasu Tokugawafs death, gDai Sekigahara Exhibitionh has started in the Edo-Tokyo Museum in Ryogoku on March 28th. It is our original project that we have been preparing for more than four years. Due to the good advance reviews, the exhibition made a wonderful start with more than 10 thousands visitors by the afternoon of the second day. The exhibition will be held at three venues in Tokyo, Kyoto and Fukuoka serially until October. At the Tokyo venue, visitors are crowded to see unique exhibits including Ieyasufs large gold flag which indicated the location of the military commander at battle fields, Mitsunari Ishidafs favorite sword named gIshida Masamuneh, Sakon Shimafs samurai warrior helmet and Yoshitsugu Otanifs sword. The Georama projection mapping, which restages the geography of the Sekigahara field, the weather and the actions of the military commanders of the time, shows the visitors the day of decisive battle of Japan vividly and in an-easy-to-understand manner. Also, the voice guidance by a special supporter Anne, a popular actress known as a gRekijoh, a nickname given for a women strongly interested in history, together with two other voice actors are also enjoying popularity. There will be some differences in exhibits at the three venues, but the collections are larger than ever including 7 national treasures and 60 important cultural properties. The exhibited armors and swords are the ones which were actually used in the battle. The exhibits have a tremendous impact beyond expectation. It is well worth watching.

Next, I will talk about our publishing business. Both the volume 1 published last September and the volume 2 published this January of gThis is the key!! Akira Ikegamifs News Academyh have been reprinted at the same time. The 3rd edition of the volume 1 added 2000 copies to make it 34000 copies in total, while the 2nd edition of the volume 2 added 2000 copies to make it 27000 copies in total. The volume 1 is entitled gThe Ukraine Issue: the Runaway Extremist in Iraqh and the volume 2, gDictators and Dictatorship of the World.h

Takashi Hirajo:

I will now report on the box office results of the films that we have invested in. gDoraemon the Movie: Nobita in Space Heroesh, premiered on the 7th of March, has been very successful with the following figures achieved as of yesterday: the total number of audience is 2,388,947 and the total revenue is 2,685,890,000yen. A new film released last year entitled gNew Nobita and the Haunts of Evilh recorded the second best revenue for Doraemon serial movies so far, but the Space Heroes is up by 103% year on-year against the Haunts of Evil. gSuper Hero Taisen: GP Masked Rider No.3h was released last Saturday, March 28th, with the total number of audience of 311,000 and the total revenue of 388,000,000yen as of yesterday.

Mr. Kogafs controversial statement on gHodo Stationh aired on the 27th :

Hiroshi Hayakawa:

gHodo Stationh is a program that plays a role of transmitting news and commentaries on the news. But what had happened has nothing to do with exchange of comments or thoughts about a news, and the fact that an exchange on personal matters regarding their TV appearance had taken place on air is something that should never have happened. It must have been something that made no sense from the viewersf point of views, and I very much regret to have such happening that was not at all scheduled. As the show was aired live, that was the most we can do as a broadcaster at the moment to cope with the situation, but it is our regret that something like that had happened while the show was on air, and I would like to express my apology to our viewers.

What kind of attention are you going to give from now on?

Hiroshi Hayakawa:

The case of Mr. Koga is that he was a guest commentator for Friday, and such commentators are asked to appear on the show on each occasion. The time being the turn of the fiscal year, I think it was already told to Mr. Koga that they wonft be asking him to appear on the show from the new FY. It may be that he had taken it as being pulled out from the show, but the fact is, rather than it being caused by my intention, what I had asked the staffs working at the news show production site at the end of last year was to do an overall review on the show on all 5 of our daily weekday shows regarding renewal, enhancement, and improvement on their contents and the production structure including their personnel resources. The reason behind my instruction is to cope with the increasing competitiveness of gwide-newsh and gwide-showsh (major daily news and/or infotainment shows on weekdays). I think the case in question is simply a matter resulting from such reviews.

Any pressure from LDP or the office of the Prime Minister at the back?

Hiroshi Hayakawa:

There seems to be such reports going around, and Ifm not sure of your intention behind the question, but there has been absolutely no pressure nor anything like that given to me, Yoshida, the President, or the General Manager of the News Division.

The Hodo Station Case: did you talk with Mr. Koga after the 27th broadcast?
For example, any complain or any negotiation from him for his future appearance?

Hiroshi Hayakawa:

After the show, the General Manager of the News Division and the Producer in charge of the show have made a serious protest against his deeds to him in person. And as for the future, we have no plan to ask for his appearance.

The member of 3 Bjunior was released from the hospital:

Shinichi Yoshida:

I would like to express my deepest apology once again to her and her family and people involved for having such an accident during the filming of our show. I have been informed that she has recovered her consciousness and left the hospital on the 10th of March. And I was told that she is attending her school from the following day after she left the hospital. I would like to refrain from making any further comment regarding the matter as it would intrude on her privacy and it may work against medical instruction, and we would like to keep her and her family away from any possible harm to their feelings.
We are very much aware of the seriousness of the case, and we have established an in-house investigation committee to execute detailed investigation by interviewing people involved in the case. We are doing our best to determine the cause through such on-going factual investigations. We are going to come up with a preventive measure based on the reports from our investigations, but we are still working on it. I think we are already at the final stage to draw the preventive measure, but the process of getting professional opinions from the specialist seems to be taking time. As soon as it is ready, I would like to share the information with you.