KADOKAWA ANNUAL REPORT 2005

In the IT and digital content business, along with the expansion of the mobile site market, the media-mix with magazine/book media is increasingly in demand. Recently more and more magazines are released based on the premise of linkage with the Internet and mobile sites. We are now in an age where the IT business related companies of the Group should deploy their business full scale.

The largest class entertainment information site in Japan, “Walkerplus.com” has improved its market recognition degree, and further expanded its business territory. The service area of the company covers 8 regions, where the “Walker” magazine is sold, and Saitama and Kyoto prefectures. The clients of the company are restaurants, wedding ceremony halls, hair salons, inns, communities, etc., and the area of business covered by clientele is expanding. The business of “Daily Walker” and “Movie Walker” for cellular phone with 310,000 paid up members has grown to yield stable profit and is supporting the management base of Walkerplus. This cellular phone service provides a full range of nationwide urban and entertainment information such as gourmet information, TV programs and movie schedules. Privilege coupons are offered when gourmet information is accessed, and a ringing melody site linked with “Walker” and “The Television” is also provided. The company released a local information magazine linked with the web site and cellular site “Adachi ward Walker” in July, 2005, which showed favorable sales results.

Kadokawa Interactive Media supplies the TV listings and movie information to monthly magazine media with a circulation of approx. 18 million copies such as “The Television Weekly”, “The Television Monthly” and the information magazine “Walker”. The company carries out not only information supply business but also editorial work on the three The Television magazines. The company now has the web-based TV listings “Web The Television” covering the whole country and has expanded the daily update service to nationwide coverage. The business of the company consists of the distribution of electronic program guides (EPG) to the providers, the weekly distribution of the program guide to local newspaper companies, the weekly and monthly distribution of the same to town information magazines nationwide and the production and supply of TV listings data to local TV stations for uploading to their web pages. Their distribution of data for hard disk recorders using a “New program table production system” has taken root. Furthermore, the company has started the operation of a TV listings site for cellular phones “Keitai The Television” as a business, and the number of paid up members, who are able to access the comments on TV programs has reached 50,000.

The specialist web site “chara-ani.com” undertakes E-commerce for the selling of goods related to characters and animations produced by the Kadokawa Group, the provision of information on products and events and character business including agency business related to copyrights. The company deals with various goods from DVDs, CDs, books, game software, and figurines to character goods. Moreover, original goods exclusive to chara-ani are actively created and sold. It is easy to buy products Via the Internet, even expensive products can be sold, which is the attractive feature for character and animation fans. A huge number of character groups are sent out into the world from comic magazines, light novels and TV animations by the animation and comic division of Kadokawa Shoten, Fujimi Shobo, Media Works, Enterbrain and so on. The cellular shopping site “chara-ani mobile” has also been started making the purchase of products even more convenient for users. The number of members registered with chara-ani now exceeds 150,000. This company also performs the role of liaison with the publishing companies of the Group with regard to events concerning characters and animations.

Kadokawa Digix is a unique company, which is engaged in the solution business in the field of media communication, by merging analog and digital technologies in the production of TV programs and content for the web and cellular phone networks. In the department of visual products, the company produces high quality image content from content sources within the Kadokawa Group, ranging widely from entertainment areas such as dramas and variety programs to welfare and education content. For cellular phone applications, the company supplies content to a wide range of carriers based on its experience of engagement in the production of I-mode content. “Bunko yomi hodai (all you can read bunko editions)”, which provides novels for easy reading on a cellular phone has been well received. The company extended an invitation for postings of “300 character novels” and recruited students for novel writing classes on the paid site in September, 2005. Moreover, the company provides high quality production, operation and management of web sites. Needless to say, the company is indispensable to the content business of the Kadokawa Group for the creation of home pages for each company as well as for its strong support capabilities.