Business Risks and Risk Management

Infectious diseases and abnormal weather

When an infectious disease spreads or a stay-at-home request is issued by the central or local government, we must cancel concerts and other large-scale events. In addition, in the occurrence of abnormal weather, our business performance may be affected due to ticket refunds and the payment of production costs, caused by the inability to hold concerts and/or halted public transportation.

• Establish a system for early judgment of cancellation or postponement by regarding the safety of consumers as the top priority.
• Deliver videos of live concerts and stages without an audience or hold them with appropriate countermeasures against infectious diseases.
• Use of systems, including one which subsidizes a part of expenses for live converts, stages, and events under specific condition.

Our major artists and other artists under contract with us

Each year, our top three artists account for 30 - 50% of our gross operating revenue (consolidated).When artists take a break from or suspend their activities or their exclusivity contract is not renewed, it may affect our business performance.

• Building relationships with contracted artists from a long-term perspective.
• Hold periodic compliance trainings for contracted artists.
• Enhance artist portfolio.

Variation of our performance associated with schedules of concerts and releases

Depending on factors such as when some concerts take place or when some music, visual works, or movies are released, variations in our quarterly or fiscal performance may be significant.

• Enhance artist portfolio.
• Secure more music and video works.

Making hits and developing artists

Basically, our business entails the difficult task of predicting hits. Whether a song becomes a hit depends on factors such as consumers' taste and preferences and changes in trends. In that sense, no artist can expect to enjoy eternal popularity.

• Enhance artist portfolio.
• Build a system for continuously discovering and developing new artists.

Secure skilled managers and producers

Although we are continually focusing on it, business activities of the Group may be affected if things do not proceed as planned or existing excellent human resources resign.

• Employ new graduates on a regular basis and frequently rotate jobs.
• Improve our personnel systems and organize workshops to support the development of our human resources.

Investment in and production and purchase of content

Depending on the box-office record or sales of content we invested in or produced or purchased, recovering the investment may unexpectedly take a long time or a loss may result. If any of this happens, our performance could be adversely affected.

• Disperse risk by setting an upper limit on the amount of investment or finding partners to invest with.
• Gain and utilize screen rights, online distribution rights and many other rights concerning our works.

Use of social media to spread information

On social media, information about our artist or company may, irrespective of whether it represents our true intention, be negatively distorted before being spread. If this occurs, operations of the Amuse Group could be adversely affected.

• Formulate guidelines within the company.
• Provide trainings to employees and artists.

Infringement of intellectual property rights

There are risks that copyrights on the music created by our contracted artists or products whose production or planning involved the Group, may be infringed upon by a third-party or that the Group may unintentionally infringe upon a third-party's intellectual property rights. Those risks may affect our business performance.

• Provide a form to report any infringement of rights on our official website to allow related departments to respond to the report in cooperation with each other.
• Our Rights Management Department thoroughly manages our rights to songs and content.

Overseas expansion of operations

Legal regulations on copyrights overseas, international affairs, or international relations may cause any of the Amuse Group's rights to be infringed or any of our events to be disturbed. If any of these occurs, the Amuse Group could fail to secure the expected revenue.

• Our Amuse Group Legal Department hires an executive officer certified as an attorney in Japan and the State of New York, to ensure quick action against overseas lawsuits.
• Strengthen the collection of information from our overseas locations in the United States and Asia.

New businesses

Our business activities may become difficult due to an acute change in the business environment or unpredictable issues before the launch of a new business. Those may affect the business performance of the Group.

• Predict various possible risks before starting business.

Cyberattack

If our systems undergo a cyberattack in such forms as usual occurrences of malware, illegal access, or any other attack targeting the Amuse Group, operations of the Amuse Group could be adversely affected.

• In a centralized manner, Information Systems Department controls all ICT equipment and in-house service such as mail and groupware within the Amuse Group.
• Ensure a high level of information security and prevent ICT-related risk.