Expansion of Company-Operated Locations and Free Magazine Distribution Areas

「For the Group’s company-operated magazines, whose publication areas and circulation continued to expand, the Company reviewed existing publications as well from a profitability perspective and worked to improve productivity through measures including discontinuing some magazines and reorganizing areas.」

「直営誌の生産性向上を趣旨とした発行エリアの見直し等により当社単体の売上高は7,324,300千円と前年同期比3.5％減少した」

「For the Group’s company-operated magazines, whose publication areas and circulation continued to expand, the Company reviewed existing publications as well from a profitability perspective and worked to improve productivity through measures including discontinuing some magazines and reorganizing areas.」

「During the current fiscal year, the Company launched 6 new company-operated magazines: “AO (あお)” in Hokkaido, covering Chitose and Eniwa, with monthly circulation of 61,000 copies; “Orange Club” in Aichi Prefecture, covering Gamagori and Kota, Nukata District, with monthly circulation of 35,000 copies; “Furimo Kawara” in Aichi Prefecture, covering Hekinan and Takahama, with monthly circulation of 42,400 copies; “Maiton” in Wakayama Prefecture, covering Hashimoto and Katsuragi, with circulation of 23,000 copies; “Hatsu Kara,” the first in Hiroshima Prefecture, covering Hatsukaichi, with monthly circulation of 41,000 copies; and “Elbin” in Fukuyama, with monthly circulation of 65,000 copies. In addition, “ARIFT” added 5 editions, including through reorganization: Tokyo Northwest, Tokyo Northeast, Yokohama South, Yokohama North, and Kawasaki-Ota, increasing circulation by 376,550 copies from the end of the previous fiscal year.」

「During the first half, the Company launched 5 new company-operated magazines: “AO (あお)” in Hokkaido, covering Chitose and Eniwa, with monthly circulation of 61,000 copies; “Orange Club” in Aichi Prefecture, covering Gamagori and Kota, Nukata District, with monthly circulation of 35,000 copies; “Furimo Kawara” in Aichi Prefecture, covering Hekinan and Takahama, with monthly circulation of 42,400 copies; “Maiton” in Wakayama Prefecture, covering Hashimoto and Katsuragi, with circulation of 23,000 copies; and “Hatsu Kara,” the first in Hiroshima Prefecture, covering Hatsukaichi, with monthly circulation of 41,000 copies.」

「The purpose is to expand the scale of the media advertising business by bringing the Company’s own Happy Media® publications, principally “Chiiki Micchaku Seikatsu Joho-shi®,” under direct operation by the Group in line with the Company’s growth strategy.」

「As of the end of June this year, the regional free magazines covered 31 prefectures and 135 magazines, with total monthly circulation of 10,939,392 copies. In particular, household distribution rates in Gifu, Aichi, Mie, Shiga, and Tottori prefectures ranged from 89.0% to 66.7%, representing distribution to at least 2 out of every 3 households in each prefecture.」

「Against this backdrop, the Group has sought to establish its regional free magazines as area advertising media covering advertisers in food service, education, beauty, real estate and other sectors, including government agencies, by remaining committed to the advantages of print advertising media, expanding publication areas, and increasing household reach within each prefecture. As of the end of the consolidated fiscal year, the magazines covered 31 prefectures and 140 magazines, with total monthly circulation of 11.43 million copies.」

「Together with VC member companies*, the Company’s medium- to long-term management goal is to “deliver regional free magazines directly by posting to 50 million households nationwide.” At the end of the period, regional free magazines, including VC magazines, covered 31 prefectures and 142 magazines, with monthly circulation of 11.50 million copies.」

「In addition, on 1 July 2022, the Company underwrote a capital increase by 株式会社ケイ・クリエイト and made the company and its subsidiary 株式会社ケイピーエス consolidated subsidiaries, thereby seeking to expand the publication and distribution areas of its own Happy Media® publications, principally the regional free magazine “Chiiki Micchaku Seikatsu Joho-shi®.” Regional free magazines, including VC members*, covered 31 prefectures and 142 magazines, compared with 29 prefectures and 133 magazines in the same period of the previous year, with monthly circulation of 11.64 million copies, compared with 10.09 million copies.」

「On 30 June 2022, we acquired 100% of the shares in the media-business succession subsidiary of 株式会社Success Holders (formerly 株式会社ぱど), now 株式会社中広メディアソリューションズ. This was intended to facilitate the nationwide expansion of our proprietary Happy Media(R), centered on regional free magazines, particularly by expanding the publishing and distribution areas in the Tokyo metropolitan area.」

「The acquisition of the media business successor company as a subsidiary through this share acquisition is intended to expand the sales base and human resources needed to expand the publication areas of the Company’s own Happy Media® publications, principally Happy Media® “Chiiki Micchaku Seikatsu Joho-shi®,” which the Group is rolling out nationwide.」

「Household reach within the main prefectures was 89.7% in Gifu Prefecture, 68.4% in Aichi Prefecture, including 71.4% in Nagoya, 81.0% in Mie Prefecture, 76.4% in Shiga Prefecture, and 69.6% in Tottori Prefecture.」

「As of the end of September 2021, the regional free magazines, including VC members*, covered 29 prefectures, compared with 30 prefectures in the same period of the previous year, and had monthly circulation of 10.09 million copies, compared with 8.90 million copies.」

「As of the end of June 2021, the regional free magazines, including VC members*, covered 30 prefectures, unchanged from 30 prefectures in the same period of the previous year, and had monthly circulation of 10.15 million copies, compared with 8.86 million copies.」

「For expanding circulation and publication areas, the Company focuses on a strategy of increasing household coverage in each prefecture within the areas served by its company-operated magazines, known as a dominant strategy. In other areas, it will continue working with VC member companies and seek to expand the number of VC members.」

「As of the end of December 2020, the regional free magazines covered 29 prefectures and had monthly circulation of 8.82 million copies. Household reach within the main prefectures was 89.9% in Gifu Prefecture, 74.5% in Aichi Prefecture, including 71.5% in Nagoya, 80.3% in Mie Prefecture, 76.2% in Shiga Prefecture, 68.9% in Tottori Prefecture, and 52.1% in Gunma Prefecture.」

「Household reach within the main prefectures was 89.9% in Gifu Prefecture, 76.4% in Aichi Prefecture, including 71.6% in Nagoya, 80.4% in Mie Prefecture, 75.7% in Shiga Prefecture, 67.7% in Tottori Prefecture, and 52.1% in Gunma Prefecture.」

「For the regional free magazines published by us, our consolidated subsidiary アド通信社西部本社 and our VC contract partners, as described above, we suspended publication of certain company-operated regional free magazines by issuing combined editions. As of the end of June 2020, the magazines covered 30 prefectures, with monthly circulation of 8.86 million copies,」

「Also, in April 2020, the former Nagoya Branch was divided into 2 branches inside and outside Nagoya, upgraded to Nagoya Head Office, and made the core of the dominant strategy in the Chubu region. Together with Gifu Head Office, the registered head office, this established a dual-head-office structure.」

「In the first quarter, the company consolidated 2 locations in Fukui Prefecture into 1 location and relocated it. In the second quarter, it suspended 1 company-operated regional free magazine in Wakayama Prefecture. In addition, during the third quarter, it suspended 1 company-operated regional free magazine and closed 1 location in Gunma Prefecture, while consolidating 2 locations in Aichi Prefecture into 1 location and relocating it.」

「In this environment, the company worked to restore earnings by expanding the lineup of new Happy Media(R) products and continuing to consolidate or discontinue sales locations based on profitability. In addition to closing 1 location in Fukui Prefecture in the first quarter, it suspended 1 company-operated regional free magazine in Wakayama Prefecture during the second quarter.」

「In this environment, to recover from the prolonged weakness in business performance since the previous fiscal year, the company continued the suspension of unprofitable magazines and consolidation or discontinuation of locations initiated in the previous fiscal year, and consolidated or discontinued 1 location in Fukui Prefecture during the first quarter.」

「Accordingly, in the second half the company suspended regional free magazines for which no near-term increase in sales or earnings was expected, regardless of when they were launched, and consolidated or discontinued locations.」

「In response to this situation, at the end of the third quarter the company rigorously reviewed the profitability outlook for company-operated free-magazine publishing locations that had expanded rapidly from the end of the fiscal year before last through the previous fiscal year, and decided to suspend or consolidate certain regional free magazines.」

「New launches deemed necessary for management, including promotion of the dominant strategy to establish a position in the free-media sector, will be considered individually, including their projected location-level profitability.」

「As specific measures to restore business performance, the company is working to capture wide-area advertising and local-government public-relations business by leveraging the strengths of its proprietary media, centered on the Chubu region, including household coverage of more than 80% in the three Tokai prefectures of Gifu, Aichi and Mie. It is also seeking to increase advertising value by strengthening coordination between print and online media, promoted under the name IoP (Internet of Paper).」

「As a result of opening 11 locations in 8 prefectures, including Shizuoka, Nara and Wakayama prefectures, where the company had no previous locations, the total number of locations increased to 62. During the same period, the company launched 4 new regional free magazines in the first half and 10 in the second half, for a total of 14, bringing the number of company-operated regional free magazines to 87.」

「During the cumulative three-quarter period, the company opened locations in Saitama Prefecture in October, its third location in the prefecture, and in Gunma Prefecture and Fukui Prefecture in November, each its fourth location in the prefecture, in addition to 6 locations opened in the first half. This brought the total number of locations to 61. During the same period, the company began publishing 8 new regional free magazines in the third quarter, in addition to 4 in the second half, for a total of 12.」

「As a result of these launches and other initiatives, Gifu Prefecture had 12 magazines and a real household coverage rate of 90.8%, Mie Prefecture had 9 magazines and a rate of 80.5%, and Aichi Prefecture had 36 magazines and a rate of 64.1%. The real household coverage rate in the Tokai region was 71.1%.」

「The free magazines comprised 65 company-operated magazines with circulation of 3.79 million copies. Including VC publications, the total was 112 magazines with total circulation of 6.52 million copies,」

「To expand the business scale of our core free-magazine business, Happy Media(R) "地域みっちゃく生活情報誌(R)" (hereinafter, the free-magazine business), we launched 1 magazine in Aichi Prefecture in the first quarter and 1 magazine in Nagano Prefecture in the second quarter. In addition, through business acquisitions, we brought 2 magazines in Miyagi Prefecture and 1 magazine in Hokkaido under direct operation in the first quarter, expanding our publishing areas.」

「As of the end of June 2016, the company-operated free magazines comprised 62 magazines, with circulation of 3.62 million copies. Including VC publications, the total was 109 magazines with total circulation of 6.28 million copies.」

「In its media business, our group plans to invest management resources in expanding its network of locations, with the aim of expanding the publishing areas of its free magazines to increase the group’s name recognition and earnings power and revitalize local economies.」