Regarding the strategic capital and business alliance between CCC and Taiwan's CMC Group (Central Group)

2012.06.25 Press Releases
Culture Convenience Club Co., Ltd.

Culture Convenience Club Co., Ltd. (President and CEO: Muneaki Masuda, hereinafter referred to as CCC) and Taiwan's CMC Group (Central Group) have today agreed to a strategic capital and business alliance between the two groups. CCC plans to invest approximately 244 million Taiwanese dollars in Deli Pictures, a subsidiary of CMC (Central China Group Ltd.) and a major Taiwanese film distributor. After the investment, CCC will hold approximately 33.4% of Deli Pictures' outstanding shares. Going forward, the two company groups plan to develop international entertainment businesses, primarily in Northeast Asia, including China, based on their capital and business alliance.

The CMC Group is the world's largest manufacturer of optical discs, and its subsidiary, Deli Film & Television, is a major Taiwanese film distribution and video software sales company that holds the rights to sell content from production studios such as Hollywood in the United States, Studio Ghibli in Japan, and the BBC in the United Kingdom. Deli Film & Television not only acquires overseas copyrights, but also actively supports Taiwan's cultural industry in collaboration with its parent company, CMC Group, and actively invests in Taiwanese independent films and dramas, producing hit works such as "Cape No. 7," "Fall, Shin-chan," "Seediq Bale," and "At the Front." Deli Film & Television expects this partnership with CCC to expand its acquisition of Northeast Asian film rights and lead to increased exports of Taiwanese films to various parts of Northeast Asia.

CCC distributes video, music, and other content in Japan through stores and the internet, providing optimal convenience for customers. In terms of video content, we rent 740 million DVDs through "TSUTAYA" stores and our internet home delivery rental service "TSUTAYA DISCAS," which is five times the number of moviegoers in Japan. We also offer video streaming through "TSUTAYA TV." Furthermore, in order to supply works that meet the needs of our users, we also develop content businesses under labels such as Culture Publishers, and actively handle everything from content acquisition to distribution, including film distribution and DVD releases. Through this capital and business alliance, CCC will strategically partner with Deli Film & Television and the CMC Group to develop new entertainment businesses in Northeast Asia, including Taiwan and China.

Through this partnership, CMC Group and CCC will first collaborate in the area of content acquisition, and CCC will leverage its expertise in Japan to support Deli Film & Television's planned digital distribution business in Taiwan. Furthermore, going forward, we will provide consumers with even more wonderful video content through our content distribution and copyright businesses in the film industries of Japan, Taiwan, and China.

■ Comments from Akira Ong (Chairman of CMC Group)
"The CMC Group's entertainment business encompasses everything from copyright agency and cinema management to DVD and Blu-ray pressing and wholesale." In recent years, Taiwan's cultural industry has been gradually revitalized, and with strong government support, we have been able to produce and sell our products independently until now. Currently, we are establishing a copyright management system by partnering with companies around the world, and this is the group's future development strategy. CMC's future business strategy is to expand from Taiwan into the international market. Therefore, we are very pleased with this strategic partnership, and together we will build a new platform for the entertainment business in Northeast Asia. "

■ Comment from Tsai Hongxiu (Chairman of Deli Film & Television)
"The strategic partnership between Deli Pictures and CCC means that both parties have a very strong priority in acquiring distribution channels and copyrights in the Taiwanese, Chinese, and Japanese film industries. As a next step, we would like to consider acquiring agency rights for overseas copyrights in Japan and other Asian countries to further enrich the content available in Taiwan." We believe that this strategic partnership between Deli Film & Television and CCC will allow us to incorporate further successful experiences and provide Taiwanese consumers with even more fantastic entertainment content. Our ultimate goal is to expand our business not only in Northeast Asia but throughout Asia. "

■ Comment from Muneaki Masuda (President and CEO of Culture Convenience Club Co., Ltd.)
"Our partnership with Deli Film & Television, a content business in Taiwan, will increase opportunities to introduce new content such as Taiwanese films to TSUTAYA." We believe that CCC can introduce Japanese and Korean films, which it has connections with, to Taiwan, resulting in a very high level of synergy. Furthermore, in the area of digital distribution services that Deli Film & Television is strengthening, CCC already operates the online home delivery rental service "TSUTAYA DISCAS" and the digital distribution service "TSUTAYA TV," so synergistic effects can be expected. Leveraging CCC's existing business know-how and customer value creation planning capabilities, we aim to build and invigorate a new platform for the Asian entertainment business together with the CMC Group, which is active not only in Taiwan but also in China and Hong Kong. "

[CMC Group: Overview] http://www.cmcnet.com.tw/
CMC Central Co., Ltd. (hereinafter referred to as "Central") is currently one of the world's largest manufacturers of optical discs and other recording media. Since its founding in 1978, Central has focused on optical discs, other recording media, and related products as its main business. Based on existing technologies, Central has continued to research core technologies for recording media. Furthermore, we are expanding our business into the cultural and entertainment industries, with a focus on "resource development, environmental conservation, and the green economy." In order to expand its position in the cutting-edge media market, the Central Group is not only continuously developing new Blu-ray technologies and products, but also engaging in multifaceted business development within the entertainment industry. Currently, its subsidiaries, such as Zhongyi, Weixiu, Deli, and Yayi, are also leading the way in their respective entertainment business areas. Going forward, we will strengthen our entertainment management resources, provide a more comprehensive one-stop service by integrating resources from a more experienced team of specialists and the resources from this cross-border strategic partnership. We aim to become Asia's largest entertainment group, a more wholesome and complete entertainment entity.

[Deli Film & Television: Overview] http://www.deltamac.com.tw/
Deli Film & Television Co., Ltd., a professional distributor of video products, has been developing the Taiwanese market since its founding in 1995 under the corporate philosophy of "providing consumers with the highest quality viewing experience at the most affordable prices," and is now the largest video product distributor in the Asian region. In September 1998, Deli Pictures became part of the Central Group, becoming the largest media group in Taiwan. Currently, we are the distributor of DVDs and Blu-rays in Taiwan for the eight major American companies. Our licensing rights cover Warner Bros., Disney, 20th Century Fox, Sony, Paramount, DreamWorks, Studio Ghibli, the BBC from the UK, and independent films and Asian products distributed by Chugoku Art Studio. It is also involved in the production of independent films and dramas. Going forward, we will promote new business investments for next-generation digitalization and, in line with our multimedia integrated management philosophy, strengthen our efforts in the digital rights market to meet consumer demand for digital video products.

[Culture Convenience Club Co., Ltd.: Overview] http://www.ccc.co.jp/
Culture Convenience Club Co., Ltd. (Tokyo Headquarters: Shibuya-ku, Tokyo; Established: September 20, 1985; President and CEO: Muneaki Masuda) has the vision of becoming "the world's leading planning company" and plans cultural infrastructure that provides information on new lifestyles with lifestyle proposals as its business domain. The company's founding concept, "TSUTAYA," is a one-stop shop offering movies, music, books, and more, and currently operates 1,475 stores nationwide. Last December, they opened "Daikanyama TSUTAYA BOOKS," which proposes a new adult lifestyle aimed at the premium age group, primarily the baby boomer generation. It was also selected as one of the "20 Most Beautiful Bookstores in the World." T-POINT, a common point program used by 40.45 million people, boasts the largest number of users and usage locations in Japan. Beyond its convenience, it also offers recommendation and marketing services, partnering with leading domestic chains and international partners.

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Regarding the strategic capital and business alliance between CCC and Taiwan's CMC Group (Central Group)

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