The Business Program for 2002 -Creating new corporate values-
January 28, 2002
Ichiji Shiohata
President and CEO
Video Research Ltd.
Today, at the beginning of the year, I would like to explain our business plan for 2002 and my view of the coming year.
The state of the already weak Japanese economy could worsen this year. As advertisers cut back their advertising spending, many companies in the advertising and broadcasting industries are faced with a significant drop in sales and profits. Despite this difficult environment, our mid-term results showed an increase in both sales and profits. We also expect an increase in sales and profits on a full-year basis with sales projected at 19.7 billion yen and profits at 3.2 billion yen.
This year marks an important milestone for us as we celebrate our 40th anniversary and our three-year management plan enters its final year.
Under this three-year management plan, we have been building the foundations for transforming Video Research into an integrated marketing-information services provider. For example, with the release of the first Comprehensive Newspaper Survey scheduled for March this year, we now provide benchmark data on all of the major traditional media of TV, radio, newspapers, and magazines as well as the Internet. We have also established our systems for OOH data and brand research services.
In addition to expanding our range of services, our R&D people have been working to develop analysis techniques that will allow more accurate data analysis. As part of these efforts, we are introducing a canonical expansion model to our products that will include the Comprehensive Newspaper Survey. We are the first research company in the world to adopt this model as an estimation system for media-mix reach.
These efforts are our first step towards becoming a full-scale media-mix marketing data provider to meet new marketing needs, as the media environment undergoes drastic changes driven by diversifying consumer attitudes and behavior and rapidly developing information technology. The integrated marketing information service that we aim to provide includes an extensive support system for marketing planning. This system integrates an enormous amount of media and marketing data using information technology, and I believe services derived from it will become essential to the media and advertising industries in the 21st century.
Now, I would like to explain briefly our plan in each business area for this year.
First, Media research.
The broadcasting industry will be gearing up in earnest for the launch of digital terrestrial television (DTTV) under the government-backed e-JAPAN plan. Although there are still many issues yet to be resolved, DTTV is scheduled to be launched in the top three television markets in 2003 with a plan to extend the service nationwide by 2006. With its new functions-things like interactivity and selective recording for later viewing-DTTV will transform people's TV viewing experience dramatically. As a result, the nature of the TV ratings service, which is our core business, is also expected to undergo a significant change. In response to this, we will start developing a new definition of TV ratings, as well as new standards and audience measurement technologies for digital broadcasting based on this new definition.
We will promote transition of the data recording period in 16 zones from its current 24 weeks to 52 weeks. We are going to start a daily reporting service in the Niigata area in April this year. And we will continue to extend this service to other areas. Preparatory work for the introduction of people meter (PM) services in the Nagoya zone in 2004 or later will begin this year. We will also start looking into the question of increasing the sample size in the Kanto area and the feasibility of extending the PM audience measurement system nationwide.
In radio audience research, we will start independent surveys in the Chukyo area (Nagoya) this year. The Chukyo area is the last of the top-three markets to see implementation of independent surveys. We will continue to our efforts to expand the areas in which we conduct joint and independent surveys, as well as promoting the introduction of the portable audience measurement system.
In March, we will release the results of the Comprehensive Newspaper Survey conducted last year. Since this is a new service, we have to strive to build trust in our data among members of the industry.
In magazines, we plan to promote qualitative research on media value and get into the planning and marketing of custom-made research projects. In OOH media,, this year we will launch two new services, the Machi Media Report ("Town Media Report") and the Ambient Media Data Guide.
As the broadband era begins, we will step up Group-wide sales efforts in the Internet business. In particular, we will strengthen and expand our Internet-related services by renewing the WebPAC, the only system in Japan that allows detailed profile analysis, as well as launching the WebAdsReport, a new Internet ad information service. We will also step up our sales efforts for the info LOOP, a mobile phone-based CRM service for broadcasters.
In addition, we are planning to start a test run of the new web-based iNEX service in October. The commercial service is scheduled to commence in January 2003. A new system will be also introduced to the CASS service to expand its service content.
In the media-data service area, we will have to make every effort to increase customer satisfaction and consolidate our expertise and know-how.
Next, I'd like to turn to new business development
We will start commercial service of the Mind-Top, our a brand- and ad-awareness survey launched last year. We aim to establish an industry standard for marketing models by providing an integrated information service that is centered on brands through Mind-Top. In new survey and standard development, we will encourage the use of our media-mix model as standard logic in the industry, starting with a seminar on the Canonical Expansion Model by Professor Danaher in February this year. We will also start testing a purchasing survey system and other new systems that use PDAs.
In our international business development...
...we extended our operations abroad four years ago, when we set up our first overseas subsidiary, Video Research USA, in New York as a base to gather information on the broadcasting and advertising industries in North America and Europe. At the end of last year, we founded our second overseas subsidiary, Video Research International (Thailand), in Thailand. The new company will start operations this year, and we will be stepping up our sales efforts for the ThaiACR as well as laying the groundwork for our participation in TAM bidding.
In Taiwan, Broadcasters Market Research, in which we have a stake, will start TV ratings research this year. The company also plans to launch a data serving service in December. Both services are now in the final stages of preparation. On our side, the support system for their implementation will be further strengthened.
To further strengthening our management system...
...we will continue to improve the new personnel system introduced last year by establishing clear criteria for employee evaluation and implementing procedures that are designed to ensure its fair and equal application.
In a move to strengthen our corporate accountability, we acquired
ISO9001 certification in 1999. At the end of last year, we also acquired
the Privacy Mark, a certification system created by the research industry.
This year, we plan to acquire ISO9001:2000 certification.
In closing, I'd like to tell you about the Video Research Group.
The VR Group consists of Video Research, Video Research Comhouse, Video Research Net-com and VRUSA. Video Research Thailand and Broadcasters Market Research are expected to join the Group this year.
The Group's total annual sales are expected to exceed 20 billion yen in fiscal 2001, with total profits amounting to 3.4 billion yen.
[That's all I have to report today. Thank you very much for your attention.]
