| Launch Of First DVD Software Rental Business In Japan Toshiba and Matsushita to Invest In Culture Publishers Inc. 15 December, 1997 Culture Convenience Club Co., Ltd. Toshiba Corporation TOKYO -- Culture Convenience Club Co., Ltd. (CCC), Japan's largest video and CD franchise rental chain, its subsidiary, Culture Publishers Inc. (CP), and two of Japan's leading electronics manufacturers, Toshiba Corp. and Matsushita Electric Industrial Co., Ltd., today announced a wide-ranging agreement covering DVD and the digital content business. As the first program under the new partnership, CCC will launch Japan's first rental business of DVD software throughout its nationwide chain of stores. Under the agreement, Toshiba and Matsushita will each invest 296.25 million yen in CP, giving each of them a 19.9% stake in the company. The paid in capital of CP will be raised from 303.8 million yen to 600.05 million yen. CCC operates Tsutaya, Japan's largest franchise chain of video and CD rental stores. Initial rental of DVD software titles will start on December 19 at two of Tsutaya's major Tokyo stores, in Shinjuku and Sangenjaya. The trial program will be extended to ten stores early next year, including branches in the Kansai region (the region around Osaka). DVD rentals will be introduced to Tsutaya's nationwide franchise chain from Spring 1998. The first DVD titles offered for rental will mainly be foreign film titles already in the Japanese retail market. They include titles released by Warner Home Video and other studios which CCC has obtained the right to rent. The number of DVD titles available for rent is expected to reach 200 to 300 by Spring next year, when nationwide renting starts. CP owns video publishing rights for an extensive range of films, and is now expanding its business field into digital contents publishing, including games. Under the new agreement CP will bring titles in its own library to DVD, and also publish and distribute DVD titles for other video copyright holders. Toshiba and Matsushita will cooperate in CP's production of DVD by providing support for DVD authoring, encoding and mastering technologies. Toshiba and Matsushita will also accelerate production of their own DVD titles and provide them for rental. The two companies have invested in CP with the aim of promoting widespread distribution of popular titles in the DVD format to boost the overall DVD market. In Japan, sales of DVD-Video players and title software began in November 1996. Since the launch, consumers have embraced DVD far faster than any previously introduced home entertainment medium. Between 500 and 600 DVD-Video titles are expected to be in the market by the end of 1997, which is a highly favorable comparison with the 91 titles the Laser Disc player boasted in 1981 after its first year in the market. At present in Japan, DVD-Video titles are available only in the retail market. By launching the DVD software rental business and promoting increased availability of DVD software titles, Toshiba, Matsushita, Culture Convenience Club and Culture Publishers will work together to expand the DVD market.
Outline of Culture Convenience Club Co., Ltd.
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