Rental by yaosaigeng

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									Current TSUTAYA Business Status and
          Future Direction
                                                                        Initial Challenges/Policy




                   Mar. 2008 TSUTAYA Business Initial Management Challenges
                      • Accelerated new store (80) and replacement openings (45)
   Franchise          • Further “Next-Gen” progress
                      • Product innovation

                      • Driving distribution reform (CD, DVD sales TR-SCM)
  Fulfillment         • Pursuit of 100% PPT product conversion
                      • Consolidated commerce flow

                      • Clarification of store ownership criteria
     Stores           • Design of lifestyle navigation store model
                      • Specific implementation of Clicks & Mortar concepts

                      • World’s first online MPS×MUS store
Internet-Related
                      • Commercialization of music and video electronic delivery
                            Accelerated         Rental Distribution   Sell-Thru Distribution      Corporate Stores    Internet Strategies
                             Openings                 Reform                  Reform                  Review




                      Store Openings Through Mar. 2008
Cumulative Store Opening Trends for Mar. ’08 (Plan) Versus Mar. ’07 (Actual)
                                                                                               Openings planned
                                                                                                                     125
120

100

 80

 60                                                            51                                                    46
                              Actual Openings      43                                      Mar. ’07 Openings

 40
                                                   21 23
 20

  0
         Apr   May    Jun     Jul         Aug        Sep        Oct      Nov        Dec         Jan       Feb        Mar
                            Openings Tracking to Plan
         Interim Results Show Openings Over Twice the Pace of Prior Year
                             Accelerated         Rental Distribution    Sell-Thru Distribution      Corporate Stores    Internet Strategies
                              Openings                 Reform                   Reform                  Review




                 Net Store Growth Plans Through Mar. 2008
Net Store Growth Trends for Mar. ’08 (Plan) Versus Mar. ’07 (Actual)
                                                                                                 Net growth planned
                                                                                                                       75
 80
 70
 60
 50
 40
                                                                 28
 30                          Net growth results       24
 20
 10                                                    4                                     Mar. ’07 net growth       6
                                                                   2
  0
         Apr   May     Jun      Jul        Aug         Sep        Oct       Nov        Dec         Jan       Feb       Mar

                              Net growth also tracking to plan
                Accelerated   Rental Distribution   Sell-Thru Distribution   Corporate Stores   Internet Strategies
                 Openings           Reform                  Reform               Review




             Store Opening Drivers for 1% Club

                    • Initial inventory at no cost (Rental)
 Product            • Most-preferred wholesale pricing (Book/CD/DVD Sales)
                    • Preferred procurement for opening inventory (Games)


 Fixtures
                    • Expense accommodation for fixtures and equipment
Equipment            for new openings and renovations
Furnishing



Training            • Store staff training programs
                           Accelerated   Rental Distribution   Sell-Thru Distribution   Corporate Stores   Internet Strategies
                            Openings           Reform                  Reform               Review




               Interim Period Store Opening Status of 1% Club Companies
                                                                                                   (Stores)
                         Interim Mar. 2007              Interim Mar. 2008
    Openings                   (Actual)                       (Actual)
                                                                                                 Difference


1% Club members                  11                            32                                 +21

Other companies                  10                            11                                   +1
 Total openings                  21                            43                                 +22

Companies in 1% Club
  with new openings
                                    11                         21                                 +10

                       1% Club companies drive store openings
    Further Promotion of
Next Generation TSUTAYA
Yokohama, Kanagawa Prefecture
                                TSUTAYA Kohoku Minamo
                                          Opened on July 20, 2007
 Top Culture Co., Ltd.          Sales Floor Space: 2,700 m2
Samukawa, Takaza-gun, Kanagawa Prefecture
                                                  TSUTAYA Samukawa
                                                    Opened on August 29, 2007
 Fuji Citio Co., Ltd.                       Sales Floor Space: 1,160 m2
Hirakata, Osaka Prefecture
                                                    TSUTAYA Hirakata Station
                                                      Opened on October 25, 2007
 TSUTAYA STORES, Inc.        Sales Floor Space: 1,770 m2 (Including merchandise sales dept.)
                                        Accelerated         Rental Distribution       Sell-Thru Distribution        Corporate Stores      Internet Strategies
                                         Openings                 Reform                      Reform                    Review




                     Franchise Participation of Others in the Same Industry
              TSUTAYA Conversions Planned                                                TSUTAYA Conversions Planned
            for Previously Joined Franchisees                                          for Franchisees Joining This Year
Lepton                            Wonder                                    Fuji                                    Osada Bunshodo
                                  Corporation


 Liberty                         Wonder GOO                                 Bach                                    Book Plaza AZ
                                                                                                     Total Chain                               Total Chain


                                                                                                 36        stores                              6     stores




TSUTAYA conversions current FY    TSUTAYA conversions current FY            TSUTAYA conversions current FY          TSUTAYA conversions current FY

         5 Locations                    2 Locations                                2 Locations                             2 Locations
Non-TSUTAYA remaining 6 stores   Non-TSUTAYA remaining 15 stores
                              Accelerated     Rental Distribution      Sell-Thru Distribution   Corporate Stores   Internet Strategies
                               Openings             Reform                     Reform               Review




                    Progress on Eliminating Initial Rental Inventory Burden
                                                           ¥10 million initial investment achieved for 1% Club
Target: Regional Roadside Locations                        member companies from stores opening in November

            05                        06                               07
Year Ended Mar. 2006            Mar. 2007                           Nov. 2007–                  Mar. 2008 (Target)



           Video
                                      PPT
      ¥34 million                                                      PPT
                                                                                                         PPT
                                      Video
                                ¥10million
           Music                    Music                           Initial Exp.
      ¥15 million               ¥10 million                         ¥10 million
  Total   ¥49 million       Total   ¥20 million              Total   ¥10 million                      Total   ¥0
Aim for 100% PPT initial rental product inventory during current fiscal year
                       Accelerated    Rental Distribution     Sell-Thru Distribution       Corporate Stores      Internet Strategies
                        Openings            Reform                    Reform                   Review




                        Comic Rentals Launch Plan
                                                                                                      150 Stores
                                                                                                              Forecast



110
                                              100 Stores
                                                 (September 26)
100
90                                                                                           Initial Plan:
80                                                                                     100 stores by Mar. 2008

70
60
50
40
      2007/                                                                                2008/
       Feb Mar   Apr   May     Jun   Jul     Aug       Sep    Oct       Nov       Dec       Jan       Feb       Mar
                                                                        Initial Challenges/Policy




                   Mar. 2008 TSUTAYA Business Initial Management Challenges
                      • Accelerated new store (80) and replacement openings (45)
   Franchise          • Further “Next-Gen” progress
                      • Product innovation

                      • Driving distribution reform (CD, DVD sales TR-SCM)
  Fulfillment         • Pursuit of 100% PPT product conversion
                      • Consolidated commerce flow

                      • Clarification of store ownership criteria
     Stores           • Design of lifestyle navigation store model
                      • Specific implementation of Clicks & Mortar concepts

                      • World’s first online MPS×MUS store
Internet-Related
                      • Commercialization of music and video electronic delivery
                                Accelerated     Rental Distribution      Sell-Thru Distribution     Corporate Stores   Internet Strategies
                                 Openings             Reform                     Reform                 Review




                     PPT Product Conversion Share Transition
90%   04                   05                             06                                      07
80%                                                    International movie titles                                           International
70%
                                                                                                                            TOTAL
60%                                                                   TOTAL
                                                                                                                            Japanese
50%
40%                                                                   Japanese movie titles
30%                                                                                                                         Anime
20%                                                                                               Japanese, animation
10%
                                                            Animation titles                      titles leave room for
                                                                                                       improvement
0%    04                    05                          06                          07
      /4 5 6 7 8 9 10 11 12 /1 2 3 4 5 6 7 8 9 10 11 12 /1 2 3 4 5 6 7 8 9 10 11 12 /1 2 3 4 5 6 7 8 9


           Monthly Aver.                  Monthly Aver.                       Monthly Aver.               Monthly Aver.
            Mar. 2005                      Mar. 2006                           Mar. 2007                Interim Mar. 2008
             39.6%                            47.0%                            57.2%                          62.7%
           PPT conversion advances for Japanese movies and animation.
                   Total PPT share of revenues improves greatly.
                                Accelerated        Rental Distribution   Sell-Thru Distribution   Corporate Stores    Internet Strategies
                                 Openings                Reform                  Reform               Review




                     Full Proxy Ordering Policy Leads to Greater PPT Shipments
(million units)                                                                                                  (%, million turns)


                  06                                                     07
                                                                                                   Shipments
  10.0                                                                                            Prior Yr Comp       100
                                                                                                  +27%
    8.0                                                                                                                 90
             PPT Shipments
                  (< L. axis)


    6.0                                   Share of proxy ordering stores
                                                                                                   Rental turns         80
                                          (> R. axis: %)
                                                                                                  Prior Yr Comp
                                                                                                  +30%
    4.0                                   PPT Turns                                                                     70
                                          (> R. axis: million turns)



    2.0                                                                                                                 60
                     2Q           3Q                       4Q                    1Q                    2Q
     Complete proxy ordering of video rental product initiated in July last year
          has led to large increases in PPT shipments and rental turns
                              Accelerated     Rental Distribution      Sell-Thru Distribution     Corporate Stores     Internet Strategies
                               Openings             Reform                     Reform                 Review




                        Existing-Store Prior Yr Comps for Mar. 2008
                        08/3月期の既存店売上前年比計画
 Existing-Store Sales Prior Yr Comps

07               Q1      Jul    Aug      Sep     Q2    Interim                                    Ref.         Ref.            Oct
                                                                                                Interim       Annual
               Results Results Results Results Results Results                                    Plan         Plan        Results

Rental         107.2%     103.1%    104.7%      107.1% 105.0% 106.0% 103.8% 104.2%                                          102.1%

CD&DVD sales    94.1%      99.5%      92.0%       94.9%             95.5%        94.8%          95.7%         95.2%           90.8%

Publications    97.1%      97.1%    101.6%      101.2% 100.0%                    98.6% 100.8% 101.5%                          97.5%

Game sales     106.8%     105.9%    110.0%      100.2% 105.3% 106.1% 109.4% 101.4%                                            90.3%

 Total         102.1%     101.2%    101.5%      102.9% 101.8% 102.0% 101.4% 100.8%                                            98.1%


   Sell-thru continues to struggle, but total across all categories outperforms plan
                   Rental maintains successful business conditions
                         Accelerated   Rental Distribution        Sell-Thru Distribution   Corporate Stores     Internet Strategies
                          Openings           Reform                       Reform               Review




           Progress on CD & DVD Sell-Through Fulfillment Reform
               Traditional                                         Henceforth (TR-SCM*)

          Order recommendation                                      Proxy ordering                                Oct. 25
                                                                                                              Proxy ordering
          (Store-level ordering)                               (Head office consolidated)                          starts


                                                                                                               Warehouse
           Company warehouse                                     Label/Studio warehouse                        Integration
                                                                                                              by Mar. 2008
                                            After integration, wholesale co. shipping costs expected to be cut by over 30%

                                                             Sharing of reduced costs with
         Negotiate wholesale rate
                                                              label/studio and wholesaler

                                             Drop in logistics cost,
                                                inventory risk
                                                                             Revenues        Improvement of
Goals    Reduction of      Reduction of                ↓
                                                                                             Gross-margin to
        dead inventory   lost opportunity      Improved                    Up 10%             inventory ratio
                                               w/sale rate
                                                    *TR-SCM:TSUTAYA RECORDS – Supply Chain Management
                                                        SCM
                                                                        Initial Challenges/Policy




                   Mar. 2008 TSUTAYA Business Initial Management Challenges
                      • Accelerated new store (80) and replacement openings (45)
   Franchise          • Further “Next-Gen” progress
                      • Product innovation

                      • Driving distribution reform (CD, DVD sales TR-SCM)
  Fulfillment         • Pursuit of 100% PPT product conversion
                      • Consolidated commerce flow

                      • Clarification of store ownership criteria
     Stores           • Design of lifestyle navigation store model
                      • Specific implementation of Clicks & Mortar concepts

                      • World’s first online MPS×MUS store
Internet-Related
                      • Commercialization of music and video electronic delivery
                           Accelerated        Rental Distribution    Sell-Thru Distribution   Corporate Stores   Internet Strategies
                            Openings                Reform                   Reform               Review




                      Corporate Store Divestitures and Closures

 (Store units)                                                                                           Through-Year

                                                                                              20 20 stores
     20

     15                        Cumulative stores divested           12
     10                                                             8                          8

       5                                 4
                 0
       0
                 Q1                      Q2                         Q3                         Q4

             Four locations divested as of the interim reporting period
To close or divest 20 locations for the year, the second half plans for divesting 16.
                                                                        Initial Challenges/Policy




                   Mar. 2008 TSUTAYA Business Initial Management Challenges
                      • Accelerated new store (80) and replacement openings (45)
   Franchise          • Further “Next-Gen” progress
                      • Product innovation

                      • Driving distribution reform (CD, DVD sales TR-SCM)
  Fulfillment         • Pursuit of 100% PPT product conversion
                      • Consolidated commerce flow

                      • Clarification of store ownership criteria
     Stores           • Design of lifestyle navigation store model
                      • Specific implementation of Clicks & Mortar concepts

                      • World’s first online MPS×MUS store
Internet-Related
                      • Commercialization of music and video electronic delivery
ALL TSUTAYA Strategy          Accelerated
                               Openings
                                                Rental Distribution
                                                      Reform
                                                                        Sell-Thru Distribution
                                                                       2007-2009 TSUTAYAグループ中期事業計画
                                                                             Reform        Review
                                                                                                 Corporate Stores
                                                                                                  Internet Strategies



       MPS            Music   Books         Games
              Video
 MUS
   RENTAL

  SELL-THRU
                      ALL TSUTAYA
              Physical (Stores)
    USED

                                             MPS × MUS
                                                    +
                                                          MPS
                                            Physical × Virtual
                                                      MUS
                                                              Video                              Music         Books   Games


                                                                       RENTAL

                                                                      SELL-THRU
                                                                                     Virtual (Internet)
                                                                        USED
                          Accelerated     Rental Distribution   Sell-Thru Distribution   Corporate Stores     Internet Strategies
                           Openings             Reform                  Reform               Review




                     TSUTAYA DISCAS Membership Growth                                                       Through-Year
                                                                                                               Target
                                                   316,000
(unit: 1,000)
450                              Sep. 2007:                                                                 415,000
400                    Growth since Sep. 30, 2006 141,000 (Up 81.3%)
350
300
250                                                                                                         316K
200
150
100
 50                                     Renamed TSUTAYA DISCAS
                                        In October 2004
   0
       02 03           04            05                      06                       07                     08
       /12 /3 6   9 12 /3 6     9 12 /3 6               9 12 /3 6                9 12 /3 6              9 12 /3

   DISCAS membership tracking successfully towards target of 415,000 members
                                               TOL Membership Growth
             TOL Membership Share (%)                   Sep. 30, 2007:        12.16
                                                                                 million
1,400
                                                            Growth Since Sep. 2006                                 12.16 million
                 EZweb
                                                            2.18 million (Up 21.8%)
1,200                               Web
                  20%               30%
1,000
        SoftBank 10%
 800                      i-mode
                           40%
 600


 400


 200


  0
        01                 02                  03                04                05                06                07
        /3   6   9   12    /3   6   9     12   /3   6   9   12   /3   6   9   12   /3   6   9   12   /3   6   9   12   /3   6   9


                          TOL membership continues successful growth curve
                                Accelerated     Rental Distribution   Sell-Thru Distribution   Corporate Stores   Internet Strategies
                                 Openings             Reform                  Reform               Review




                    Multi-Use Cross Promotion of Internet Services
Initiatives to Integrate Internet Services (MUS)



                                              Mutual traffic-
                                              building offers

                                          Quick member registration

Entertainment info, EC member offers (12 million)              Home delivery rental, video download offers


                      Achieving Multi-Use (Sell-Thru & Rental)

   Mutual customer offers between TOL (EC) and DISCAS drive functional integrating
                                  Accelerated   Rental Distribution      Sell-Thru Distribution   Corporate Stores   Internet Strategies
                                   Openings           Reform                     Reform               Review




                          Storefront and Internet Services Integration
                      TOL Mobile                                                      ALL TSUTAYA
   Now             Premium Service
                                                            Future                  Premium Service
                                                                  At Physical Stores                   At Point Alliance
                                                                                                           Partners




                                                                       Ex. Double points,
Digital Content Service                                                                                Ex. Discount coupons
                                                                      rental reservations



                                                                                                     Digital Content Service


              Virtual × Physical × T Point Alliance enlarges value proposition to customers
                            Aiming for increase in premium mobile members
            Accelerated   Rental Distribution      Sell-Thru Distribution      Corporate Stores        Internet Strategies
             Openings           Reform                     Reform                  Review




TSUTAYA DISCAS Expands Electronic Delivery Offering

                          March Warner Bros. titles launched
                          July Toei Anime BB premium titles launched


                          August                Launch
                          Bandai Channel titles: ‘Mobile Suit Gundam’ series,
                                                 ‘Evangelion’, ‘Keroro-Gunso’, etc.

                          November                    Launch
                          Paramount Pictures titles: ‘Dream Girls’, ‘MI:III’,
                                                      ‘An Inconvenient Truth’, etc.


                                  Total electronic titles                   9,416 (As of Nov. 11)
                                                                                            *Excludes adult titles

								
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