The Kadokawa Group, which aims to become a "Mega Software Publisher," is moving beyond publishing to achieve sustainable growth in film, software, websites and mobile apps, and by developing business overseas with an emphasis on Asia. Kadokawa Shoten is a well-established Japanese publisher of books, Mangas and Manga magazines.
Kadokawa Shoten was established on November 10, 1945 by Genyoshi Kadokawa. The company's first publication imprint, Kadokawa Bunko, was published in 1949. The company went public on April 2, 1954. In 2003, Kadokawa Shoten was renamed Kadokawa Holdings, transferring the existing publishing businesses to Kadokawa Shoten. On July 1, 2006, the parent company was renamed to Kadokawa Group Holdings, and inherited the management and integration businesses within Kadokawa Shoten.
In January 2007, Kadokawa Group Holdings inherited the management and integration businesses within Kadokawa Shoten. The magazine businesses was transferred to the Kadokawa Magazine Group. The video game divisions of Kadokawa Shoten, ASCII Media Works and Enterbrain were merged into Kadokawa Games. Since the founding of Kadokawa Haruki in 1976, Kadokawa was also active in movie production.
Kadokawa Group Holdings include currently 43 affiliated companies, with main activities in publishing, movies and cross media publications.
In fall 2013, Kadokawa integrated nine subsidiaries to become Kadokawa Corporation and installed a new corporate executive.
Key company developments in 2013
Kadokawa’s restructuring caused a push in corporate revenues, from 147 billion JPY in 2012 to 161 billion JPY in fiscal year 2014 (ending in March 2013). Fiscal year 2013, the relevant time period for the Global Publishing Leaders ranking, period of time, saw revenues of 86 billion JPY, up from 76 billion JPY in 2011.
Based on Kadokawa’s detailed financial breakdown in its 2012 annual report, revenues from not only book publishing, but also from digital publishing and overseas activities (notably in Taiwan) have been included in this report. Overall, revenues from these ventures rose to 86.10 billion JPY in 2012 (from 75.83 billion JPY in 2011 on a like-for-like basis). Digital sales alone have increased by 43% per year.
Emerging from a difficult economic environment in Japan, Kadokawa reported a return to profitability in 2011. Revenues from the book business rose for the ninth consecutive year in 2011 with sales of anime-based “light novels” (“bunku”), representing 42.2 % of overall sales.
Ownership, mergers & acquisition, internal organization
The move to consolidate Kadokawa’s nine subsidiaries into Kadokawa Corporation was driven by a high growth strategy and desire to expand in the digital market and become a platform provider.
Kadokawa Shoten Co., Ltd. and Kadokawa Pictures Inc. were brought together in an internal merger to synergize the company’s publishing and film businesses.
Taiwan and Hong Kong have been at the center of Kadokawa’s international efforts, but Kadokawa expanded its strategy in 2014 to become “a truly global entertainment enterprise, with a focus on overseas expansion.”
Kadokawa has already built up a presence in China, establishing Guangzhou Tianwen Kadokawa Animation & Comics Co., Ltd. (non-consolidated) in 2010. The company is joint venture with the Hunan Publishing Investment Holding Group, a Chinese state owned publishing conglomerate.
Masaki Matsubarhe, Kadokawa’s new top executive, plans to accelerate growth from expanding digital, citing “a wider and wider range of digitized content through an increasingly powerful array of technological devices.”
With revenues generated from e-books of over 14 billion JPY, Kadokawa’s digital revenues are matched only by Shogakukan.
In spring 2014, Kadokawa launched an industry-wide e-book distribution platform, branded “ComicWalker,” which is available online as well as an app, offering many of its core brands in English, including Gundam, or Evangelion. The app will offer roughly 200 manga titles, including classics such as Mobile Suit Gundam and Sgt. Frog. The platform is also expected to include French versions of manga.
In 2012, Kadokawa launched the e-book distribution platform Book Walker with formal approval from Apple, as a response to Amazon’s Kindle Fire and Kobo’s e-readers. The company acquiried Dwango Co. Ltd. and formed an alliance of GREE, Inc. to develop the platform into a major entertainment platform. 7,000 titles were made available on Book Walker as of 2012.
The Media Factory division has been at the core of efforts to expand Kadokawa’s value chain for “light novels” and “comic essay for women” as well as children’s books. The division has also driven growth with the creation of original games since 2009.
In April 2011, Kadokawa also entered the Android market, overseen by “Kadokawa Contents Gate Co. A new service, “Fan+,” was launched in cooperation with the Japanese TV company NTT.
Bestselling authors & titles
Sales were strong for the paperback title Yoake no Machi de (a movie by the same name was released in 2011) and also the paperback titles Mioka and Tsukumogami Kashimasu (television dramas based on these two novels have been created). Business-related book sales were solid as well, with several new titles becoming social topics, including Shiranaito Hajiwokaku Sekaino Daimondai 2, the follow-up edition to the bestseller released in the previous fiscal year, and The True Nature of Deflation, presenting a new angle on the nature of the Japanese economy. The 2010 Honya Taisho (The Booksellers Prize) award winner Tenchi Meisatsu and the 2010 Manga Taisho award winner Thermae Romae series were also popular, and sales rose sharply for both titles.
In the publishing division, a main focus has been put on children (with the Kadokawa Tsubasa Bunko imprint launched in 2009), women, and the elderly. Kadokawa has also collaborated with Chukei Publishing and Kadokawa Shoten.
Key points for analysis & conclusions
Kadokawa aims to combine all digital media formats and distribution channels among its content businesses. This led the company to restructure in late 2013, and to aim at a digitally driven strategy to achieve both domestic and international growth.