Press Conference by President Shinichi Yoshida (Outline)

June 30th, 2015

Speakers:

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

Audience Rating Update:

Shinichi YoshidaF

As we are at the end of the first quarter (April to June) I will explain our results briefly. We are placed at the second place in all categories including all-day, golden, prime-time, and prime-2 but the difference between the top and the second place is quite large in all categories. So, we need to keep accelerating the improvement in our ratings. However, g2018 FIFA World Cup Russia: Asian 2nd Qualifiers, Japan vs. Singaporeh achieved a good rating, and gIfm Homeh featured in The Thursday Drama slot, and other programs including gOsamu Hayashifs Now or Never Infotainmenth have contributed much to improve the rating of golden-time by 0.4 point up from last year and to keep the last yearfs level in prime-time. We can conclude that the first quarter has paved the way for the following quarters to move onward. From this July onward, we are going to improve the ratings further with programming that synchronizes with gTV Asahi & Roppongi Hills/ Summer Festival SUMMER STATION.h

Takashi Hirajo:

I will talk about the annual audience ratings. Our audience ratings are 7.0% for all-day, 11.1% for golden-time, 11.4% for prime-time and 7.0% for prime 2, placing us second in all categories. The specific programs that contributed to our ratings are sports programs including gThe AFC Asian Cuph in January, gThe ISU World Team Trophy 2015h in April, and g2018 FIFA World Cup Russia: Asian 2nd Qualifiers, Japan vs. Singaporeh in June; dramas including gAIBOU: Tokyo Detective Duo- Season 13h and gDoctors 3: The Ultimate Surgeonh in the fourth quarter, and gIfm Homeh in the first quarter; the news show, gHodo Stationh in the fourth quarter; and variety shows including gThis is the key! Akira Ikegamifs News Academyh in the fourth quarter, gCream Quiz Miracle 9h throughout the first half year, gQuiz Presentation Variety, Lord Qh in the fourth quarter and gOsamu Hayashifs Now or Never Infotainmenth in the first quarter.

I will now talk about the first quarter. Our audience ratings are 6.7% for all-day, 10.6% for golden-time, 10.8% for prime-time and 6.7% for prime 2, placing us second in all categories. The ratings for the individual programs are: the drama series gIfm Homeh aired in The Thursday Drama slot of the first quarter has ended with an average rating of 14.8% and with a rating of 19.0 % for its final episode. This figure of 19% is the third highest rating among all prime-time dramas aired in 2015. In fact, the top and the second are the two episodes from gAIBOU: Tokyo Detective Duo - Season 13h aired in February and March. Not every drama of all stations for this quarter has finished yet, but as of now gIfm Homeh is at the top among all the drama series for the first quarter with its average rating of 14.8%. Other than this, there is gNew Tokyo Metropolitan Police First Investigation Unit 9h which will air its final episode tomorrow. The rating for this series is now around 13% with an average rating of 11.9%. It will probably finish as the 5th among all the drama series aired by commercial broadcasters in the first quarter, so the two dramas did well in the drama series category.

Now I will go on to the variety show category and explain about our new shows launched in prime-time after the April reshuffling of programs. Normally, it is said that variety shows have a tough time at the outset, but the four shows we launched in April are all doing quite well. First, we have gStunning Revelations - A Variety Show with Real Buddhist Monksh aired on Mondays at 19:00. The series started off well with a rating of 11.1%, and now has an average rating of 9.7%. It is ranked 3rd among the 15 new prime-time variety shows launched in April by all stations. gShikujiri Teacher`Learn from Mistakes!h has an average rating of 10.7% as of now. It started off well with 12.8%, the top rating among all shows aired in the same time slot, and the current average of 10.7% ranks it as the 2nd among all the variety shows starting in April. In fact, gShikujiri Teacher`Learn from Mistakes!h received the gHoso-Bunka Foundation Awardh as the gBest TV Entertainment Show of 2015h. gNow I Know!! Akira Ikegami Explains the Newsh (tentative English title) is a renewal launch, but it is now leading at the top among all variety shows starting in April with its average rating of 11.3%. gYOU didnft know this?h aired on Sundays at 19:00 has a rating of 9.1% and is currently ranked 6th among the 15 shows launched in April.

Next, I will introduce the one-off sports programs with successful results. g2018 FIFA World Cup Russia: Asian 2nd Qualifiers, Japan vs. Singaporeh achieved 22% in ratings. The gKirin Challenge Cup 2015, Japan vs. Iraqh aired the week before also got a high rating of 15.8%. As for the regular programs outside prime-time, gLife Paradiseh is achieving steady high ratings, an average of 11.3% for this first quarter, 0.9 point more than its highest rating for the first quarter in the past. gHodo Station SUNDAYh which has moved to Sunday afternoon since January has an average rating of 7.5% at present. This figure is 0.8 point up year-on-year in terms of average in the same time slot.

Now, I will talk about the major line-ups from now on. gSummer Festival SUMMER STATIONh will start from July 18th. The festival was very popular last year, and this year the area will be expanded. In conjunction with this event, we will start our summer special line-up starting from this weekend. The line-up is highlighted by large scale special shows on weekends. First, on this coming Sunday, we will air gBeat the Champions! 2015 Summer Special Battleh (tentative English title), a summer version of our popular annual New Yearfs special show. Next week, we will air gMaromaro at His Best 4-Hour Specialh (tentative English title), a special variety show starring Shingo Katori and Kimimaro Ayanokoji, featuring songs from the Showa era and stand-up comedy by Kimimaro Ayanokoji. And we will air gThe 144th Openh starting the following week from July 16 to July 19. In addition, we will also cover gMAZDA All Star Game 2015h to be held on July 17 and 18. These major special programs are scheduled for the weekends to create synergy with the festival.

Now, I will introduce special programs commemorating the 70th anniversary of the end of World War II. A special drama, gDrama Special commemorating the 70th anniversary of the end of the War: A Kamikaze (Suicide Attack) Pilot, Who Flew with His Wifeh (tentative English title) featuring Maki Horikita and Hiroki Narimiya will be aired in August. Also, a special program, gThe Scoop Special: A Truth of the Atomic Bomb Revealed after 70 Yearsh (tentative English title) will be aired on August 9. We will air a special extended version of gAll Night Live Debateh on August 14, commemorating the anniversary of the end of the war. We are planning some more special programs for the occasion and we will announce them as soon as their details are fixed.

Sales Results:

Shinichi Yoshida:

The year-on-year sales results for the month of May are 100.5% for time-sales, 88.8% for spot-sales, making the total sales of 94.0%. The time-sales successfully exceeded the level of the previous year as we made a strong effort to improve the sales of the regular programs as well as of the yet to be filled CM slots for one-off special programs. Spot-sales fell short of the level of the previous year due to the cooling down of the market that has been continuing since this February, and also because of the decrease in advertisements from industries we consider as our forte.

Next, I will talk about the sales result for June. The year-on-year sales for the month of June are around the level of 81% and more for time-sales, 92% and more for spot-sales, making the total sales of 87% and more. The programs that contributed to the time-sales are gThe U.S. Open Championshiph and g2018 FIFA World Cup Russia: Asian 2nd Qualifiersh, but, it wonft reach the level of the previous year because the sales of g2014 FIFA World Cup Brazilh last year was too big. The market for spot-sales is still weak in June, and the Tokyo market is expected to fall short of the previous year. In the same way as in May, the advertisements from industries that we do well in have decreased and so our sales wonft reach the level of the previous year.

The year-on-year sales for the month of July are around the level of 93% and more for time-sales, 96% and more for spot-sales, making the total sales of 95% and more. As for the time-sales, we are planning to air many major sports coverage, including gThe Open Championshiph, gMAZDA All Star Game 2015h and gFINA World Swimming Championship KAZAN 2015h. We will sell these slots soundly and aim to reach the level of the previous year. I think the market for spot-sales is beginning to pick up in July and we are working on sales and marketing projects related to gSummer Festival Summer Stationh which will start on July 18.

Revenue from Non-broadcasting Businesses:

Gengo Sunami:

First, I will talk about the sales of formats. It is decided that gBeat the Championsh will be aired in the U.S. It is a very popular special program which TV Asahi has been airing since 2000 and FOX Broadcasting Company, one of the four major American networks will air the format with the title gBeat the Championsh in its prime-time slot. It will be aired at 21:00 ET on Tuesday, June 30 on a special one-hour slot. In the original program, the two members of the Tunnels challenge super athletes in Japan using unique styles of challenge, but in the U.S. version, amateurs who have sports-experience challenge the super athletes and a popular comedian will host the show. The shooting of the program has been completed at a high school in the Los Angeles suburbs and FOX is promoting it in the media as well as through its website. In the Japanese version, Kei Nishikori, James Rodriguez, Tiger Woods and other world-famous athletes were featured in the show, and the U.S. version is also studded with super star guests. Scottie Pippen, an ex Chicago Bulls pro-basketball player, Missy Franklin, an Olympic gold medalist swimmer, and Rob Gronkowski, a NFL superstar enjoy unique handicapped games. TV Asahi has been marketing international distribution of gBeat the Championsh format in partnership with a Swedish agent, Eccho Rights. Following the U.S., it will be aired in Germany this autumn and we expect that it will be aired worldwide including Asia and Europe. A special episode of the Japanese version, gBeat the Champions! 2015 Summer Special Battleh (tentative English title) will be aired through TV Asahi network at 21:00 on Sunday, July 5.

Next, I will talk about our event business. A Broadway musical in which TV Asahi has invested is now running with big success. It is gJersey Boysh performed for the first time in Japan. It is based on Four Seasons, a super star quartet of the 60s famous for their beautiful falsetto vocals and their hit songs including gSherryh and gBig Girls Donft Cryh. The musical portrays four young men and their dreams, setbacks and glories. The musical won the Tony Awards including the Best Musical of the year, which is the most treasured award in the performing art category and has been a box-office hit worldwide. Its movie version was produced and directed by Clint Eastwood last year and it has just made a big hit in Japan. The show is performed with live music, playing familiar songs including gCanft Take My Eyes Off Youh which was a revival hit in the 80fs worldwide with a boom of discotheque. It is now showing at Tokyu Theatre Orb in Shibuya until Sunday, July 5.

Takashi Hirajo:

Next, I will talk about movies. As for the latest movie of Crayon Shin-chan, gMovie Crayon Shin-chan: My Moving Story! Cactus Large Attackh, which I said would end with the second biggest hit in its history in the previous press conference, continued to do well and actually ended as the biggest hit ever. It attracted a total number of 1,916,140 audiences and made 2,238,800,000 yen at the box-office. It topped gMovie Crayon Shin-chan: Action Kamen vs. Leotard Devilh, produced in 1993 and had been the biggest hit with box-office sales of 2.22 billion yen up till now. The record breaking figure was made last Saturday, and we can expect the figure to grow even further as the movie is still showing. gStand by Me Draemonh, which was released last August and became a mega hit with box-office sales of 8.38 billion yen, was released in China on May 28 and it made 530 million yen on the very first day. The large population in China may be a contributing factor, but it has made 9.3 billion yen at the box-office just in 11 days since its release surpassing the total sales made in Japan. The movie was on theater for 30 days and finished its showing on June 26, and we are told that its sales finally reached 10.5 billion yen. Especially on May 31, it made 1,776,000,000 yen at the box-office just in one day and it recorded the biggest box-office sales of an animation movie for one day in China. The biggest sales up till then was the 1,361,000,000 yen made by gKung Fu Pandah and so gStand by Me Doraemonh surpassed this result by far. This movie was sold to 60 countries and regions and it recorded the biggest box-office sales by a Japanese film in Hong Kong as well.

Could you give us your opinion on Netflix?

Shinichi Yoshida:

Recently, a coproduction with Fuji Television was announced. Before that, new steps were already taken like adding a push button for Netflix on remote controllers, and, though this is all within our expectation, I think it is pretty clear now that their market strategy in Japan includes development of contents through co-productions. The framework and overall picture of how they will move ahead with their business in Japan is yet to be seen and we are watching them closely. Of course, the entry of Netflix will make the video streaming business much more competitive, but this may lead to expansion of the market as well, and we are very interested in how it will develop. Having a Netflix button on a remote controller is one thing, but we are interested more in how they will influence our core business, namely the TV broadcasting business including production. In any case, they are a powerful global company and we are watching their moves very carefully.

What is your opinion on the issue of a comment made at a study session of LDP, which could be taken as a pressure on the news media?

Shinichi Yoshida:

As everyone is mentioning since last week, I, too, think freedom of speech and freedom of the press is the foundation of a democratic society, and ideas and expressions that neglect this foundation are an issue of big concern. To influence the press by using pressure should never be allowed. Regarding this matter, Chairman Inoue of the National Association of Commercial Broadcasters in Japan announced his opinion in the form of an informal talk yesterday, and Japan Newspaper Publishers and Editors Association, of which we are members, also announced a similar point of view. My opinion is basically the same. Discussions are still under way and I think it is only natural that this incident comes under criticism, so I am following closely how the Diet, which should be the citadel of discourse, and the world of politics will cope with this issue.