“Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100...

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Tokyo Stock Exchange First Section: Code No. 3770 ZAPPALLAS, INC. ZAPPALLAS, INC. Zappallas Zappallas , the spirit inside you. , the spirit inside you. Mid Mid - - term vision term vision for the business management of for the business management of Zappallas Zappallas

Transcript of “Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100...

Page 1: “Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100 fortune-tellers, to comprehensively produce the fortune-telling ... iPhone Dec. 2009 “TAROT

Tokyo Stock Exchange First Section: Code No. 3770

ZAPPALLAS, INC.ZAPPALLAS, INC.

““ZappallasZappallas, the spirit inside you., the spirit inside you.””

MidMid--term vision term vision for the business management of for the business management of ZappallasZappallas

Page 2: “Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100 fortune-tellers, to comprehensively produce the fortune-telling ... iPhone Dec. 2009 “TAROT

5,319

6,939

8,551

10,308

11,225

7661,251

1,8712,709 3,016

0

2,000

4,000

6,000

8,000

10,000

12,000

FY2006 FY2007 FY2008 FY2009 FY2010

Net Sales Operating income

(C)2010,Zappallas,Inc.All Rights Reserved. 1

In the term ended April 2010, our company increasedsales and profit continuously, but growth rate is edging down.

BackgroundBackground

(millions of yen)

↑30%

↑23%

↑21%

↑9%

◆◆

↑63%↑50%

↑45%

↑11%

Page 3: “Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100 fortune-tellers, to comprehensively produce the fortune-telling ... iPhone Dec. 2009 “TAROT

0.0

50.0

100.0

150.0

200.0

250.0

FY2005 FY2006 FY2007 FY2008 FY2009 FY2010

Fortune-telling Decome Standby Hobbies, games

(C)2010,Zappallas,Inc.All Rights Reserved. 2

【Reference】 The number of subscribers to our fee-based contents, which had been growing, decreased from the previous year for the first time in the term ended April 2010.

(10,000 peoples)

216.0218.6

190.1

140.1

97.7

67.7

↑44%

↑43%

↑36%

↑15%

↓1%

By increasing advertising costs, the number of Decome subscribers increased, but the number of fortune-telling subscribers did not change, and the number of subscribers of other services decreased.

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(C)2010,Zappallas,Inc.All Rights Reserved. 3

The growth of “fortune-telling” and “Decome” markets in the official mobile field,which have been our core businesses, became sluggish .

Due to the saturation of the quantity of sites, etc., the “fortune-telling” market, which had been growing steadily, is now sluggish.

The “Decome” market, which had been growing rapidly is expected to be slow growth. It is become charge-free models are distributed and contents provider excessiveness.

The future growth of the official mobile market is uncertain, due to the growth of smartphones and the substitution of the unofficial market, including Moba-ge, Gree, and mixi.

It is imperative to shift business models, and develop the base for new businesses.

It is imperative to shift business models, and develop the base for new businesses.

103

123

158

182

200

214

55

116

171

0

50

100

150

200

250

2004 2005 2006 2007 2008 2009

Fortune-telling market Decorated email market(100 million yen)

1,000

2,000

3,000

4,000

5,000

(100 million yen)

2,663

3,150

3,666

4,272

4,835(Reference) Mobile contents market

Page 5: “Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100 fortune-tellers, to comprehensively produce the fortune-telling ... iPhone Dec. 2009 “TAROT

(C)2010,Zappallas,Inc.All Rights Reserved. 4

In this situation, Zappallas aims to regain the sustainable growthearly, based on three basic strategies.

III. Diversify and strengthen our businesses (including overseas markets)

I. Improve the fortune-telling business thoroughly

II. Expand our business field

Page 6: “Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100 fortune-tellers, to comprehensively produce the fortune-telling ... iPhone Dec. 2009 “TAROT

(C)2010,Zappallas,Inc.All Rights Reserved. 5

Win a dominating share in the field of fortune-telling,which is our strength business, as a base (i)

I. Improve the fortune-telling business thoroughly

I. Improve the fortune-telling business thoroughly

◆ Comprehensively produce the “fortune-telling” business, and make it profitable outside the mobile field.

Contents business

Utilize the fortune-tellernetwork with about 100 fortune-tellers, to comprehensively

produce the fortune-telling business!

Commercializedright (goods)

Broadcasting(terrestrial, CS)

Events, entertainment

Packages(CD, DVD)

Publication(magazines, books)

Digital(mobile, PC)

Promotion

Format sale Real(stores, commercial

Facilities)

Outside Japan

Screen right

Other PFSecondary use

Media businessGame productionright

Resale/business in related fields

Page 7: “Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100 fortune-tellers, to comprehensively produce the fortune-telling ... iPhone Dec. 2009 “TAROT

(C)2010,Zappallas,Inc.All Rights Reserved. 6

Monetization through our own efforts

Monetization in cooperation with other companies and supervisors (revenue sharing and royalty models, etc. )

Conventional official mobile sites・・・・・・・・・・・・・・315 yen (monthly)Fee-based PC sites・・・・・・・・・・・・・・・・・・・・・・・・・1,000 -3,000 yen (every time)Mobile applications ・・・・・・・・・・・・・・・・・・・・・・・・・350 yen- (every time)

Publications ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・1,000-1,500 yen (per copy)

Games/DVDs ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・3,000 yen (unit price)

Goods ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・1,000-4,000 yen (unit price)

Lectures/performances ・・・・・・・・・・・・・・・・・・・・・100,000 yen (per lecture)Events・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ Event-related profit × ?% (every time)

Sale of imaging and character production rights・XX yenSale of rights outside Japan ・・・・・・・・・・・・・・・・・XX yen

Real fortune-telling・・・・・・・・・・・・・・・・・・・・・・・・・ 3,000-5,000 yen (every time)

【Reference】 Estimated profits under the assumptionthat a comprehensive fortune-telling business is produced

In this fiscal year, several contents will be comprehensively produced, and the profit source will be improved.

In this fiscal year, several contents will be comprehensively produced, and the profit source will be improved.

I. Improve the fortune-telling business thoroughly

I. Improve the fortune-telling business thoroughly

Page 8: “Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100 fortune-tellers, to comprehensively produce the fortune-telling ... iPhone Dec. 2009 “TAROT

(C)2010,Zappallas,Inc.All Rights Reserved. 7

Win a dominating share in the field of fortune-telling,which is our strength business, as a base (ii)

◆ Optimize the customer-attracting method・ Optimization of advertisements, and sophistication and strengthening of SEO measures

◆ Optimize the subscriber analysis systemImprovement and optimization of the subscriber analysis system (subscriber database), which is one of our strengths.・ Increase subscribers・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・Introduction of new attractive sites satisfying needs・ Promote subscribers to continue their subscription・・・・・・・・・・・・Development of contents that keep attracting customers ・ Promote subscribers to access other sites and register many sites

・・・Timely link to other sites that would meet needs via email magazines and our sites

◆ Keep introducing high-quality contents in the official contents field・ We plan to open 51 sites, exceeding the number in the previous term: 39 sites.

◆ Develop a new mobile system platform・ Develop a new platform by ourselves and introduce it by the end of this fiscal year, in order to double our

businesses efficiency.

◆ Rigorously review and improve the existing contents and services・ The revision of the charging system, the increase in subscription rate, the reduction in cancellation rate, and

the streamlining of site operation, etc. are in progress through over 20 projects.

I. Improve the fortune-telling business thoroughly

I. Improve the fortune-telling business thoroughly

Page 9: “Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100 fortune-tellers, to comprehensively produce the fortune-telling ... iPhone Dec. 2009 “TAROT

(C)2010,Zappallas,Inc.All Rights Reserved. 8

Win a dominating share in the field of fortune-telling,which is our strength business, as a base (iii)

◆ Cope with the mobile platforms outside the official contents fieldUtilizing a variety of our fortune-telling services (91 services and 270 sites), we will expand our

businesses swiftly, targeting the platforms of other companies, such as Moba-ge-town and mixi, and smartphones, such as iPhone and Android-installed mobile phones, and then we will not miss any chances to obtain profit.

No. of applications

iPhone Dec. 2009 “TAROT READING (charge-free)”May 2010 “TAROT READING Premium (fee-paying)”May 2010 “TAROT READING Plus (charge-free)”

3 applications 350 yen per download

Android-installed mobile phones

Dec. 2009 “TAROT READING (charge-free)”Apr. 2010 Start of the supply to DoCoMo Marktet

1 application Charge-free only

Open platform Oct. 2009 Start of the supply of the mixi Apps. “Miku-Miku Aisho Uranai”Dec. 2009 Start of the charging for the mixi Apps. “Miku-Miku Aisho Uranai”Jan. 2010 Start of the supply of “Kyukyoku no Uranai Moba DX” to the Moba-ge open platform Apr. 2010 Start of the charging service for “Kyukyoku no Uranai Moba DX”Jun. 2010 Start of the supply of social game applications (scheduled)

2 applications 50-100 yen per menu

I. Improve the fortune-telling business thoroughly

I. Improve the fortune-telling business thoroughly

Timing of introducing contents, and their descriptions Charging system

Page 10: “Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100 fortune-tellers, to comprehensively produce the fortune-telling ... iPhone Dec. 2009 “TAROT

(C)2010,Zappallas,Inc.All Rights Reserved. 9

II. Expand our business field

II. Expand our business fieldFrom now on, we will broaden our business range actively

while emphasizing the compatibility with the fortune-telling business, and aim to diversify our businesses.

--Policy for our future business domain--

III. Diversify our businesses

III. Diversify our businesses

III. Diversify our businesses

(where?)

II. Expand our business field(what business?)

(Expansion of target areas)

Outside Japan, such as China and other Asian countries

The business domainto be cultivated by Zappallas

I. Improve the fortune-telling

business thoroughly

(Official mobile)

(Fortune-telling)

Page 11: “Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100 fortune-tellers, to comprehensively produce the fortune-telling ... iPhone Dec. 2009 “TAROT

(C)2010,Zappallas,Inc.All Rights Reserved. 10

Soul

Prediction

Divination

Enlightenment

Aura

Self-enlightenment

Genuine entertainment contents, which

follow their originalpractices and

cherish and appreciate nature (pristine states)

such as “fortune-telling”

Fields from which we will not aggressively approach

Broaden the concept of “fortune-telling”and extend it to closely related fields

--Policy for expanding our business field--

Spiritual power spot

Kippo-doriShrines and

sacred places

Spiritual power goods

Feng shui LOHAS Aroma

CompatibilitySoulmate

Natural Natural cosmetics

OrganicMedicinal

food

Aroma therapy

Slow food

Yoga

View of career

HealingDetox

World music

Fields to whichwe will advance actively

Learning

Travel

Lifestyle

Love

Food

Beauty

Body

Work/study

EntertainmentFields in w

hich our customers have som

e interests; our intrinsicfields

Know

-how to create contents, w

hich has been developed through the fortune-telling business

II. Expand our business field

II. Expand our business field

III. Diversify our businesses

III. Diversify our businesses

Page 12: “Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100 fortune-tellers, to comprehensively produce the fortune-telling ... iPhone Dec. 2009 “TAROT

(C)2010,Zappallas,Inc.All Rights Reserved. 11

◆ We established a beauty business division, and plan toopen 15-20 new mobile sites in the term ending Apr. 2011.

The contents in the fields of “beauty,” “body,”and “life” are being improved.

◆ In May 2010, the new site titled “Natural Bijin Guide” was opened.

This mobile site helps customers become healthy and beautiful from the inside of the body, with the Indian practice “Ayurveda.” We support customers from the aspects of health and beauty, by checking individual constitutions based on Ayurveda, suggesting treatments for beauty and health, including diet and massage, according to constitution type menstruation cycle, season, and weather, and enabling customers to manage their health easily with their mobile phones.

HealingHealing

TherapyTherapy

BeautyBeauty

AromaAroma

II. Expand our business field

II. Expand our business field

III. Diversify our businesses

III. Diversify our businesses

Page 13: “Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100 fortune-tellers, to comprehensively produce the fortune-telling ... iPhone Dec. 2009 “TAROT

(C)2010,Zappallas,Inc.All Rights Reserved. 12

Purposes of this siteChange our customers into true fans by enabling them to see, share, and agree with the world views of the contents operated by ZappallasStreamline the process of increasing new subscribers by concentrating promotion activitiesRetain our subscribers, and allow them to browse other contentsPromote our fee-paying subscribers to register for more than one contentAttract latent customers in different ways, through satellite sites

Flowchart of the streaming of subscribers

New site

Charge-free subscribers

Fee-paying subscribers (only 1 site)

Fee-paying subscribers (over 2 sites)

Those who have cancelled

New subscribers Existing subscribersSite for all of our subscribers

Email magazine

Promotion

Satellite sites

In addition, we will release a site for all of our subscribers, which include all business services of our company in this summer

Satellite sites

II. Expand our business field

II. Expand our business field

III. Diversify our businesses

III. Diversify our businesses

Page 14: “Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100 fortune-tellers, to comprehensively produce the fortune-telling ... iPhone Dec. 2009 “TAROT

(C)2010,Zappallas,Inc.All Rights Reserved. 13

Mar. 2010Mar. 2010May 2010Jul. 2010 (scheduled)

Oct. 2010(scheduled)

The business alliance with iPeer was announced.The business alliance with GGwan and MMclick through the establishment of a corporation in Hong Kong was announced.The business alliance with Vogins was announced.The shipping of the chip for Zappallas applications (iPeer) will be started (trial shipping)The supply of the fortune-telling application “Mirai no Kiseki” through Kuro (iPeer) will be started.The shipping of the chip for Zappallas applications (Vogins) will be started.Establishment of a corporation in Hong Kong.The shipping of the chip for Zappallas applications (iPeer) will be started on a full-scale basis.

Price/■元

Price/■元

・menu setCPrice/■元

結婚運

金銭運

人生運

Images of the contents of the iPeer application “Mirai no Kiseki”

Efforts for monetize digital contents in the Chinese market◆ Start of contents distribution in China, based on the business alliance, etc. with Chinese firms

他アイコン

他アイコン

他アイコン

他アイコン

他アイコン

Terminal top page Kuro top page Menu page of “Mirai no Kiseki”

Fortune-telling page Confirmation of charging

Display of the results

We will keep emphasizing our business in ChinaII. Expand our

business fieldII. Expand our

business field

III. Diversify our businesses

III. Diversify our businesses

Page 15: “Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100 fortune-tellers, to comprehensively produce the fortune-telling ... iPhone Dec. 2009 “TAROT

(C)2010,Zappallas,Inc.All Rights Reserved. 14

Net sales: 20 billion yen

Target consolidated sales and operating income 3 years from now

(100 million yen)

0

40

80

120

160

200

Term ending Apr. 2011 Term ending Apr. 2013

Net sales: 11.23 billion yen

Operating income:3.02 billion yen

Operating income:4.5 billion yen

Increase in net sales due to the expansion of our business field,

including beauty

Adding of overseas sales from contents distribution, etc. in

China

We will double sales in a medium term (in 3 years).

Increase in net sales due to the expansion

of the fields other than own portal and

mobile fields

Page 16: “Zappallas, the spirit inside you.” · Utilize the fortune-teller network with about 100 fortune-tellers, to comprehensively produce the fortune-telling ... iPhone Dec. 2009 “TAROT

(C)2010,Zappallas,Inc.All Rights Reserved. 15

Any business forecasts or other such items contained in this document, excluding reports of past performance, are assumptions based on the company’s classified management plans, information available at the timeof release, and uncertain factors affecting future performance. Actual performance may differ due to various factors.