Management Keynote Report

Every year since 2003 our company has held a business policy briefing in mid-February for makers and advertising agencies. This year the fifteenth such meeting took place on February 17 and was once again very well attended. The following is the keynote report on management that I delivered at the meeting.

Ongen Publishing will celebrate the seventieth anniversary of its founding in May 2019. The start of our growth strategy came in 1971, when the special journal Audio Senka (Audio Special Course) was launched under the policy, proclaimed by then President Masatsugu Iwama, of 渡urturing the audio business and fostering specialty audio stores.

The editorial team consisted of just three people: me, aged 25; a 21-year-old woman who had just joined our company; and Mr. Iwama. Since joining the company at the age of 23, I had been working as an editor on the magazine Rajio Terebi Sangyo (Radio and TV Industry), but now I was appointed as deputy editor in chief of Audio Senka. I can still remember, as if it were just yesterday, asking the president, who was chief editor of the new magazine, 展ho is going to read it? When he replied 鄭udio makers and audio specialty stores, I remarked, 鉄ince the target is clear, it will definitely be a success.

Asking myself what the industry was, I added 砥sers to the conventional reply of 杜akers and distributors. My understanding was that the industry comprised three elements: makers, dealers, and users. So what was the 兎ssence of the industry? The answer, I realized, was products, and I concluded that our mission was to create demand. As an editorial policy, therefore, I proposed the sentiment that 妬n order to respond to customers, the industry must be robust.

Products mean audiovisual equipment from around the world. Makers is the general term for not only all domestic makers but also import trading companies, wholesalers, and other distributors. Dealers are retail stores, and especially audio specialty stores, that handle audio equipment with sincerity. Users is the general term for audio buffs and all lovers of music. The media play the role of informing makers, dealers, and users about products, which are the essence of the industry. They are the embodiment of our company痴 editorial philosophy in issuing magazines of 吐ostering things that have potential value.

Accordingly, Audio Senka became a lubricant for the industry, sincerely confronting makers and dealers and building friendly relations of trust. I understood our everlasting mission to be one of doing our utmost for the constructive development of the industry, and this attitude has not changed at all today as we look toward the future.

Following the launch of Audio Senka, I traveled the length and breadth of the country to see how audio specialty stores and audio retail stores were doing and reported the results. I also introduced regular columns on such topics as audio specialty store management, product research, and the top 10 bestselling products. Information about the bestselling products naturally accumulated in my mind and was very useful in my subsequent work.

Regarding our efforts to create demand, I am proud to say that, on the basis of high-end audio, information emanating from us led to products in the fields of tape audio, component systems, mini component systems, and hi-fi components . Of course, we also responded quickly to the arrival of high-end audio and the audiovisual age, constantly featuring company presidents and responsible directors on our magazine pages and promoting the integration of manufacturing and sales. Various suggestions that I made in the magazine became topical, and I gave talks all over the place.

Furthermore, in the 1980s and 1990s, we held a meeting called the Future Forum three times a year bringing together the top brass of 13 hardware makers. In this meeting, which continued for 15 years from 1985 to 2000, we shared information on profitable business and market creation. We also continued close exchange with the owners of audio specialty stores and audio discount shops. Such people are also avid readers of my monthly 適antogen (徹bservations) column in the magazine, which I have continued writing from 1984, when I became president, right up to the present. Even now, this column is very popular indeed.

This deep involvement with the industry has generated a favorable impression toward Ongen Publishing痴 corporate motto of 田ontributing to the constructive development of the industry, and I am always full of gratitude for the fact that a large support group has formed in the industry to encourage my work.

When Windows 95 went on sale in 1995, the Internet opened up a new era. As I came to understand the wonder and potential of the Internet, I realized that the publishing and information industries were definitely going to face a crisis. Accordingly, with my eyes fixed firmly on the near future, I decided to operate not a corporate website but a portal site based on the wealth of content that we had accumulated so far.

In 1999 we launched the Phile-web portal site, 菟hile meaning friend or lover of something, as in our decade-old magazine Home Theater Phile. The site went online in June 2000. Seeing it as a way to contribute to the development of the industry, as befitted Ongen Publishing, we built a portal site with the address .com rather than

Ever since the start, we have opted not to carry anonymous bulletin boards or price information, because they could work contrary to the development of the industry. Moreover, all articles are written by critics or journalists of Ongen Publishing based on their own original research. As you will be aware, these factors are now attracting increasing attention and are leading to the further enhancement of Phile-web痴 value as a portal site.

Seventeen years after its launch, Phile-web has become the definitive audiovisual portal site with 1.5 million unique users and 15 million page views a month and with worldwide recognition. It has also operated the official Japanese site of the IFA consumer electronics show for 15 years now, and a Chinese version is scheduled to start this year, which means that access is going to balloon even more.

Internet projects are steadily progressing and becoming the core of Ongen Publishing痴 business activities. We are now promoting the 都unflower marketing strategy to expand and strengthen the organic linkage with our publishing and SP businesses, which is proof that our growth strategy is going to function in the future too. We are planning a further leap forward to 10 years down the road.

In 2007 the collapse of Lehman Brothers plunged the world economy into a recession. It was then that, in collaboration with the head offices of Bic Camera, Yodobashi Camera, K痴 Denki, and Edion, we launched the free magazine business as an aid for salespeople. We inaugurated the SP Division to handle this business.

Free magazines began in June 2007. The first, titled Premium Headphone Guide, provided an impetus for the current headphone boom and since then has done exceedingly well as the main magazine for headphones. This SP business , which includes free magazines for each of our awards, has developed steadily and become a core pillar of our activities together with the web.

Our existing magazines, which have been impacted the most by the Internet, consist of 11 consumer magazines, including the quarterly Audio Accessory, AV Review, the quarterly Analog, the quarterly Net Audio, and Home Theater Phile, as well as special editions, and Senka 21. The big reform that we carried out on all of these magazines, beginning with the issue of Audio Accessory put on sale on February 21, 2008, was to make them all-color. This was our response to the age of the Internet, in which color expression had become the norm.

I called the person in charge at Toppan Printing over to our company and talked about with him about the future of publishing, as a result of which all of our magazines became all-color and at a 20% lower cost than before. The all-coloring and digitization of our publications were realized thanks to the relationship of trust that Ongen and Toppan had established by working together on all of our magazines ever since the inaugural issue of Audio Accessory. Consequently, we were able to make our magazines even more informative, and our overseas strategy has been made easier too. Moreover, our magazines are now not only distributed by Amazon and Fujisan Magazine Service but also available via Phile-web, which has boosted their circulation.

An even bigger factor has been the sales promotion strategy for our magazines via Phile-web, which carries advertisements and reviews and introduces the editorial content of each magazine. Recently we calculated the advertising value of Phile-web, which amounted to a whopping 400 million yen a year. This effect has become evident even amid the publishing recession, and our magazine sales are stable. We would not have been able to achieve these results if we were not involved in the management of a huge site. Furthermore, they would not be feasible without all-color pages and reliable editorial content.

And then there is our unparalleled strong award business. The results of such awards as the Audio Excellence Award, the Visual Grand Prix (now known as just the VGP), the Analog Grand Prix, the Audio Accessory Grand Prix, the Home Theater Grand Prix, and the Digital Camera Grand Prix are announced in our main magazines, free magazines, and on the Phile-web site, so the number of viewers is huge. These effects have won the support of users and led to the actual purchase of award-winning products. According to one survey, 70% of 4K televisions sold carried the red VGP mark.

This year we will even more thoroughly implement our 都unflower marketing growth strategy and contribute firmly to increasing your sales. As a part of these efforts, we will strengthen our introduction on Phile-web and in our other media of high-end audio, analog equipment, and so on, as well as visual equipment and home theater, and endeavor to attract customers to retail stores and boost sales.

Last year we positively helped to attract visitors to audio fairs in Hokkaido, Sendai, Shinshu, Hokuriku, and Kyushu, and organizing retail stores expressed their gratitude to us for the successful events. Also last year, in collaboration with the International Audio Society of Japan, we carried information about the Tokyo International Audio Fair regularly on Phile-web so as to attract visitors, and again we received expressions of gratitude for the success. This year we will continue to contribute to such PR activities, including on the occasion of the Ototen audiovisual show in May.

This year, without wavering, we will continue to abide by our founding philosophy and do our utmost to contribute to the development of the industry. I look forward to your further support and kind guidance in this endeavor.

Finally, I thank you for your attendance today and offer my best wishes for the prosperity of your companies and for your own personal good health and happiness. Thank you.