About Japanese Music bussiness trend, especially, Mobile Music Download trend.

1. Music Trend in Japan - What can we learn from the past? - Mar, 2009 COZY MIZOGUCHI [email_address] +81-08-1205-8448 COZY MIZOGUCHI , All rights reserved

6. New trend *based on my personal assumption *There are some which we can already see. 1 BUT, still / more, ability + power to develop new artists + create new songs/genre are critical / siginificant. 2 In order to get potential new comers, “Scalability” as Majors is more important for appealing actual evidence in producing hit artists/songs to artists firms. *Probably, we will have 2 ways from now more on in either major, and/or small but having unique artists. 3 “FAN Club” to become as reliable revenue stream by web, especially Mobile / Smart-phone; Digital contents are profitable business, because we don’t have to consider stocks, distribution. 4 Live to be more prioritized as both; 1)effective communication opportunity with Fans, 2)selling CD, artists items directly, etc. 5 In Japan, CD, DVD packing to be survived at some level, due to; 1)Pricing remaining policy enacted by law 2)Premium DVD attached CD are really supported by Fans, among female. What will be required to Record company from now on? COZY MIZOGUCHI , All rights reserved

7. Japanese Mobile Download Trend Number of Mobile Download Entire Japanese mobile download market shows grim; Ring-tune = 70% size to compared with FY07, Full-track = showing sudden slowdown 0 10 20 30 40 50 60 70 0 50 100 150 200 250 300 （ million ） Last year comparison (%) Ring-tune Full track ＦＹ０８ ＦＹ０７ ＦＹ０６ １Ｑ ２Ｑ ３Ｑ ４Ｑ ＦＹ０５ １Ｑ ２Ｑ ３Ｑ ４Ｑ １Ｑ ２Ｑ ４Ｑ Resource from RIAJ, 08 COZY MIZOGUCHI , All rights reserved

9. Shares about Japanese MP3 Players Maker % by units % by Amounts APPLE SONY TOSHIBA PANASONIC KENWOOD COWON CREATIVE 58.7 23.3 1.1 0.7 0.2 0.3 0.1 54.0 26.7 1.8 0.8 0.5 0.3 0.2 Result of survey by BCN, 08 APPLE, SONY are 2 major dominant players in Japanese MP3 market. attached #2 COZY MIZOGUCHI , All rights reserved

10. Japanese Population of Distribution “ Past” Youngsters = “Previous” mobile main users grow up, shifting their behavior for music download from mobile to PC, presumably. Size of current younger bracket is relatively smaller than “Past” youngsters. attached #3 COZY MIZOGUCHI , All rights reserved

11. Growth of Japanese PC Download Simulation based on actual PC download performance / trends by RIAJ attached #4 - # of download in PC is up from 23,500k in Q1/FY07 to 25,000k in Q2/FY08. COZY MIZOGUCHI , All rights reserved 0 5,000k 10,000k 15,000k 20,000k 25,000k 30,000k 35,000k 40,000k 0% 5% 10% 15% 20% 25% 30% 35% Actual Simulation % of PC download # of Download ＦＹ０７ ＦＹ０８ ＦＹ０９ １ Ｑ ２ Ｑ ３ Ｑ ４ Ｑ １ Ｑ ２ Ｑ ３ Ｑ ４ Ｑ １ Ｑ ２ Ｑ ３ Ｑ ４ Ｑ Mobile Full-track PC Download