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Recently, the entertainment industry environment has changed, with users’ tastes diversifying and an improvement of the infrastructure for online and mobile distribution. In response to these changes, the Group restructured the content business of its Entertainment business in January 2009 through the integration and reorganization of Victor Entertainment, Inc. and JVC Entertainment Company, LTD., to strengthen its base for creating hit content.

Under the new framework, we are further expanding our businesses and improving profitability. To this end, we are strengthening the four related functions — content creation, management, music publication and other property rights-based business, and network and distribution — and deepening coordination among them, and developing the content business into a multifaceted entity centering on Victor Entertainment. We are also creating a diverse array of hit content under the new structure by using the Group’s comprehensive capabilities and focusing on training new employees to create new hit content. Furthermore, we are leveraging our content beyond just creation by pursuing other profitable opportunities, including content management and property rights-based opportunities, or licensing, through the optimization of our management resources and under a flexible structure in which proactive alliances with other companies are an option. In addition, we are further improving profitability in the music distribution field, where we see high growth potential, by developing the online media business spearheaded by a newly established network/distribution company.

In the media business, which centers on the trustee business, we are strengthening our business base and improving profitability by integrating the pressing processes for entertainment and non-entertainment CDs/DVDs. To this end, a capital and business alliance has been established among JVC, Victor Creative Media Co., Ltd. (a subsidiary of JVC that engages in the pressing of CDs/DVDs), Toppan Printing Co., Ltd., and its subsidiary Toppan Seihon Co., Ltd.