December 15, 2014
Company Name:

GMO Internet, Inc.
(TSE First Section, Code: 9449)

Address:

26-1 Sakuragaoka-cho Shibuya-ku Tokyo JAPAN

Representative:

Masatoshi Kumagai, CEO and Representative Director

Contact:

Masashi Yasuda, Managing Director

Telephone:+81 3 5456 2555

URL:

http://www.gmo.jp/en

Notice of Investment in new “Specified” Subsidiary and to Establish Culture Incubation Division

At a Board of Directors meeting convened today, GMO Internet Inc. resolved to invest capital in GMO Culture
Incubation, Inc. at the same time establishing a new Cultural Incubation division. As a result the company
becomes specified subsidiary and as such we announce the following details.
1．Objective of Capital Increase
Music consumption is increasingly shifting away from CDs and album downloads, and towardsubscription-based content streaming services including music recorded at club and festival events. The shift
has brought about the commercial success of Electronic Dance Music (EDM), a new phenomenon in dancemusic in which DJs are personalities who perform in front of tens of thousands of people at EDM events.
The online music content market declined 3.9% in value over the past year and is now worth JPY1.56 trillion(*1) globally. Conversely, the festival and event market grew to over JPY400 billion (*2). At the same time, thegrowth of EDM is producing more DJ stars.
GMO Internet places importance on the promotion of culture and arts, and decided to establish the culture
incubation division as a means to promote Japanese talent and culture on the global stage.
GMO Culture Incubation, Inc. was established on November 11, 2014. The company today announces acapital increase aimed at ramping up the new business. As a result, capital in the new company is greater than
one tenth of the value of capital in GMO Internet, and as a result the new company is designated a “specifiedsubsidiary”.
GMO Culture Incubation was established to support Japanese artists striving to achieve global success whileat the same promoting one of our core aims, to make people happy and provide inspiration. The first initiativeof the new Culture Incubation business will be in the EDM and dance music genre and will aim to promote
Japanese DJs and artists globally.
*1：IFPI*2：IMS Business Report 2014

1

2．Overview of Subsidiary (as of December 15, 2014)(1)

Company Name

GMO Culture Incubation, Inc.

(2)

Address

Cerulean Tower, 26-1 Sakuragaokacho, Shibuya-ku Tokyo, Japan

(3)

CEO

Yuki Yoshiyama(4)

Business Description

Culture incubation(5)

Capital

JPY100 million(6)

Fiscal Year End

December 31(7)Date Established

November 11, 2014
GMO Internet, Inc.

85.0% (before capital increase 100.0%)

Major Shareholders

Yuki Yoshiyama

5.0% (before capital increase 0.0%)

and Ownership Ratio

2 other individual(8)
investors(9)

10.0% (before capital increase 0.0%)

Relationship withCapital Relationship

See (8) above.

GMO Internet, Inc.

Executive Relationship1 member of the GMO Internet Board ofDirectors and 1 member of the Board ofAuditors to serve concurrently on the Board ofDirectors

Transactional

NoneRelationship

3．Effective Date
December 12, 2014
4．Outlook
The impact of this announcement on 2014 results forecasts is immaterial.

(Reference) Consolidated Results Forecast (published February 6, 2014)
Consolidated

Consolidated

Consolidated

Consolidated

Net Sales

Operating Profit

Ordinary Profit

Net Profit

JPY 105,000 million

JPY 12,500 million

JPY 12,500 million

JPY 5,500 million

JPY 93,704 million

JPY 11,000 million

JPY 10,941 million

JPY 5,244 million

Current Forecast(FYE12/2014)
Previous Term Results(FYE12/2013)2