SOFTBANK, Yahoo! Japan start operating joint venture, strengthen moving-picture content service business

SOFTBANK CORP. (Head Office: Minato-Ku, Tokyo; Representative and President: Masayoshi Son; hereafter SOFTBANK) and Yahoo! Japan Corporation (Head Office: Minato-Ku, Tokyo; President and CEO: Masahiro Inoue; hereafter Yahoo Japan) today began operating TV Bank Corp. (Head Office: Minato-Ku, Tokyo; Representative and President: Masayoshi Son; hereafter TV Bank), a joint venture established by the two Internet companies.

SOFTBANK and Yahoo! Japan will concentrate their human resources and know-how related to moving-picture content services on TV Bank in order to strengthen the SOFTBANK Group’s business in such services. Specifically, TV Bank will procure moving-picture contents, develop distribution and search systems for moving-pictures, operate the systems, and create and operate web pages for the services.

On December19, 2005, a new portal, Yahoo! Streaming (http://streaming.yahoo.co.jp/), operated by TV Bank began providing access to about 100,000 moving-picture titles, mostly free of charge. Yahoo! Streaming is intended to become a business model in which content services are accompanied by moving-image commercials so that the portal site operator can earn revenue from advertisers. Under this business system, TV Bank will significantly expand the number of titles to be provided free of charge while most of the contents which had been provided only to paid subscribers in the past will be also offered to general viewers free of charge. In addition, TV Bank will try to improve both pay-to-view and free-of-charge contents both in terms of quantity and quality by receiving significant support from major content providers both at home and abroad which have formed partnerships with TV Bank. Furthermore, viewers can access moving-picture contents being provided by portals other than Yahoo! Streaming by utilizing the newly-added content search function. We hope to build the world’s largest-scale search index for moving-picture contents as soon as is feasible.

In addition to the above services, Yahoo! Streaming plans to add a function that allows viewers to contribute their own videos to the portal. Under this function, called “moving-picture contribution,” moving pictures taken or produced by viewers and contributed to the portal will be posted as contents on web pages operated by the portal. Starting from January 2006, Yahoo! Streaming will actively solicit viewers to submit their own videos by sponsoring contests on a regular basis. Initially, TV Bank will accept contributions from viewers via mail. Viewers will be able to contribute their videos via the Internet around the spring of 2006 by which time the function enabling on-line contributions will be available.

Internet contents, which had been mainly provided in the form of text information in the past, have been increasingly shifting towards moving-picture information and voice information, thanks to the rapid advancement in the broadband infrastructure. Against this business background, SOFTBANK and Yahoo aim to make Yahoo! Streaming and other moving-picture content services a major pillar of their next-generation business operations by linking up with content providers and advertising agencies.

Outline of Joint Venture

Lineup of Executives Representative

Director and President

Masayoshi Son (President and Chief Executive Officer of SOFTBANK Corp.)

Director

• Masahiro Inoue (President and CEO of Yahoo! Japan Corporation)
• Ken Miyauchi (Director of SOFTBANK Corp.)
• Hiroaki Kitano (Director and COO of Yahoo! Japan Corporation)
• Tomotaka Nakagawa (Director of Contents Business Promotion Center at SOFTBANK BB Corp.)
• Yoshimitsu Goto (General Manager of Finance at SOFTBANK CORP.)
• Manabu Miyasaka (VP of Media Business Unit at Yahoo! Japan Corporation)

Business Model

Two main types of contents are being provided by Yahoo! Streaming – one being offered free of charge and the other being offered as a pay-to-view service. Free-of-charge content services, which account for most of the services being provided by the portal site, adopt a business model in which the portal operator’s revenues are generated with advertising fees being paid by advertisers as their moving-image commercials are inserted in video contents. Contents for pay-to-view services adopt a business model in which viewing fees paid by viewers become the main revenue sources for the site operator. Collected advertising revenues and viewing revenues are divided between TV Bank and the content providers according to the number of viewings and the amount of revenues collected after commission fees are deducted.

Nature of Advertising and Cooperation with Advertising Agencies

It is possible to accurately count the number of moving-image commercials inserted in web contents which have been actually viewed by consumers. Based on these data, TV Bank plans to distribute contents that reflect viewers’ tastes and behavioral characteristics. The Company will try to exploit and expand the market for moving-image commercials in cooperation with advertising agencies such as Dentsu Inc., Hakuhodo DY Media Partners Inc., Asatsu-DK Inc., cyber communications Inc. and Digital Advertising Consortium Inc. The Company will provide a large number of advertisers with opportunities to promote sales and marketing of their products and services, while targeting not only broad-based potential customers but also selective potential customers in an effective manner.

Major Content Partners of Yahoo! Streaming (in order of Japanese “hiragana” characters)

• IT Japan (South Korean dramas)
• Aviva (personal computers)
• IMAGICA Corp. (animation)
• Interactive Media Mix Inc. (South Korean and Taiwanese dramas)
• Space Communications Corp. (gravure, hobbies, games)
• Satellite Channels Incorporated (culture)
• Avex Entertainment Inc. (dramas)
• AT-X Inc. (animation)
• GAGA Crossmedia Marketing Inc. (movies, dramas)
• GINGA KOBO (dance, gravure)
• Club iT Corp. (movies, dramas, games)
• Kenshoen Co. (sports)
• C Net Corp. (culture)
• Ski Jumping Pairs (animation)
• ZST (combative sports)
• Sony Communication Network Corp. (South Korean and Taiwanese dramas)
• SOFTBANK Creative Corp. (soccer, combative sports, music, gravure)
• SOFTBANK BB Corp. (movies)
• Twin Ring Motegi (motor sports)
• Tsukuba TV (gravure)
• Fishing Vision (hobbies)
• T&M (dramas, hobbies)
• Digital Adventure Inc. (hobbies, gravure)
• Digital Ultra Project (hobbies)
• Digital Laboratory Inc. (music)
• TV Asahi Corp. (cars, dramas)
• TV Tokyo Medianet Inc. (animation)
• Toei Co. (animation, movies with special-effects)
• Toei Video Co. (dramas)
• Toyo Media Links Corp. (gravure, relaxation)
• TOORISE Co. (Taiwanese dramas)
• Tricolor Ltd. (gravure)
• Nippon Animation Co. (animation)
• Japan Association of Music Enterprises (music)
• Repco (animation)
• Panasonic Network Services Inc. (dramas)
• Bandai Channel (animation)
• Fandango Inc. (comedy programs)
• For-side.com (gravure, music)
• PRIMEDIA.TV (movies)
• Frontier Works Inc. (animation)
• Pronto Inc. (animation)
• Pony Canyon Inc. (animation)
• Media brst Inc. (comedy programs)
• Unisia Co. (South Korean dramas)
• Yoshikura Design Ltd. (combative sports)
• Line Communications Inc. (gravure)
• WOWOW Inc. (movies, comedy programs)
• Watanabe Entertainment Co. (comedy programs)

New Content Partners of Yahoo! Streaming (in order of Japanese “hiragana” characters)

• Aoi Advertising Promotion Inc. (movies)
• FEG Inc. (boxing-type comprehensive combative sports K-1)
• Oscar Promotion Co. (idols)
• Kadokawa Pictures, Inc. (movies)
• J SPORTS Broadcasting Corp. (sports programs)
• GDH K.K. (movies)
• Cinema Cruise Inc. (movies)
• Shochiku Co., LTD. (movies)
• Stardust Promotion Inc. (movies)
• Digital Hollywood Entertainment Corp. (contests)
• Tohokushinsha Film Corporation (movies)
• Fukuoka SoftBank Hawks Marketing Corp. (baseball)
• BBC Worldwide Ltd. (broadcasting, multimedia, publishing)
• China Television Company, Ltd. (CTV) (Taiwanese TV station)
• Chinese Television System, Inc. (CTS) (Taiwanese TV station)
• Formosa Television (FTV) (Taiwanese TV station)
• Korean Broadcasting System (KBS) (South Korean TV station)
• Munhwa Broadcasting Corporation (MBC) (South Korean TV station)
• Seoul Broadcasting System (SBS) (South Korean TV station)
• Shanghai Media Group (SMG) (Chinese TV station)
• Taiwan Television Enterprise, Ltd. (TTV) (Taiwanese TV station)
• The Associated Press (AP) (The world’s largest news agency)
• Zee Telefilms Ltd. (major Indian media company)

As for cooperation with domestic terrestrial television broadcasters, Japan Broadcasting Corp. (NHK) has been participating in an experiment of our project. Negotiations are also underway with Nippon Television Network Corp., Tokyo Broadcasting System Inc., Fuji Television Network Inc. and TV TOKYO Corp. over the selection of specific contents, how to provide such contents and when to offer the service.