■Overview of Space Shower SKIYAKI Holdings <4838>

1. Business Overview

The company has restructured its business segments after the management integration to optimize its business portfolio and create synergies, providing original content produced in-house to users in the content segment (including the event business, live house business, artist management business, label and agent business, Pay TV business, on-demand business, and Infinias entertainment cafe business) and the solution segment, which offers services to solve client challenges (including SKIYAKI's platform business, fan club business, EC/MD business, Sepp's alliance business, video production business, and SPACE SHOWER FUGA's distribution business). The revenue composition by segment for the fiscal year ending March 2025 was 54.4% for content and 45.6% for solutions.

The company is characterized by its strength in developing all music entertainment-related businesses, including artist and creator management, event hosting, live house operation, labels, agents, copyright management, music Pay TV, video production, entertainment cafes, fan club platform operation, and distribution.

To further enhance group synergies, a reorganization involving the succession and absorption of some subsidiaries is planned for April 1, 2025. Specifically, SKIYAKI will absorb Connect Plus to centralize the fan club business, the alliance business of Space Shower Network will be succeeded to Sepp to consolidate creative solution functions, and the digital distribution business will be centralized to SPACE SHOWER FUGA to operate the distribution business as a unified entity.

(1) Content Segment

The event business of Space Shower Network hosts various large-scale events under its own brand, such as the music festival "SWEET LOVE SHOWER" and the hip-hop festival "POP YOURS", and follows a revenue model that generates income from ticket sales, merchandise sales, and food and beverage sales. The live house business operates the live houses "WWW" and "WWWX" in Shibuya, Tokyo, generating income from rental fees and ticket sales. It works in conjunction with broadcasts and the internet, sending out the vivid appeal of music in a multi-dimensional way.

The artist management business engages in 360-degree management activities centered around the company's affiliated artists, generating revenue from master recordings, publishing, live performances, and MD income. The label and agent business involves music production, music publishing management, and agency operations, generating revenue from master recordings, copyright income, and agent fees. The business operates all aspects related to music software, including artist management, music label functions, digital music distribution, CD manufacturing and sales, and copyright management, fully supporting artist activities.

The Pay TV business operates Japan's largest music dedicated channels, "SPACE SHOWER TV" and "SPACE SHOWER TV Plus," which have about 7 million households able to view them. The revenue model is based on price per unit multiplied by the number of viewable households (as the company is a program supplier, it has the rights to edit the entire channel and decisions on pricing through broadcasting operators). The on-demand business operates "Special On Demand," which has a revenue model based on price per unit multiplied by the number of paid memberships.

Infinia's entertainment cafe business operates "@Home Cafe" in Akihabara, Tokyo, and Nipponbashi, Osaka. A new store in Nagoya, Osu, is planned to open in spring 2025, marking the first expansion into the Chubu region (the 11th store in Japan). It is a theme park styled cafe where customers can enjoy unique service based on the world view of "Masters and Maids." Additionally, the "@Home Shop" sells maid-related goods. The revenue model is based on price per customer multiplied by the number of visitors, which reaches about 0.73 million annually.

(2) Solution Segment

SKIYAKI's platform and fan club businesses focus on the all-in-one fan platform "Bitfan" and the custom fan platform for enterprises "Bitfan Pro." "Bitfan" provides a low-cost platform service for artists that includes official websites, fan clubs, fan sites, merchandise sales, live streaming, and electronic ticket sales, all in one place. With translation features and support for overseas currencies, it assists creators in their activities both domestically and internationally. "Bitfan Pro" offers customizable platform services designed for major artists. The total number of paid memberships for the fan platform is around 1.3 million. The EC and MD business develops, manufactures, manages inventory, delivers and ships artist merchandise, following a revenue model based on price per unit multiplied by the number sold. Also, it operates "LiveFans," one of the largest live music information services in Japan with approximately 9 million page views monthly. As of April 1, 2025, SKIYAKI will absorb Connect Plus, consolidating its fan club management business.

Sep specializes in creative music video production and is the industry's number one firm. The alliance business generates revenue through sponsorship advertisements and commissioned event production. The video production business earns money through producing concert recordings and music videos. It plans and produces over 400 diverse pieces of content annually based on high creativity and trust with creators, including commercials, VPs, web content, and XR. Furthermore, for commissioned event production, it is producing the "FUKUOKA MUSIC FES," one of the largest indoor music festivals in Japan, in collaboration with the professional baseball team "Fukuoka SoftBank Hawks" and select shop "BEAMS." As of April 1, 2025, Sep will inherit the alliance business from Space Shower Network.

SPACE SHOWER FUGA was established in 2021 as a joint venture between Space Shower Network and FUGA, which operates global digital distribution. In the distribution business, it handles music distribution through digital streaming and provides Marketing Services. Its revenue model is based on distribution fees. By combining Space Shower Network's know-how and network in the Japanese market with FUGA's industry-leading distribution system and overseas network, it provides the necessary tools and services to deliver partners' music to listeners worldwide in the best way possible.

(Authored by FISCO guest analyst Masanobu Mizuta)