WOWOW INC.

Business Details

The Company produces and procures programming and provides BS Digital Pay-TV Broadcasting, in addition to distribution via cable TV, CS, IPTV, and other transmission networks. It also offers the streaming service "WOWOW On Demand" and "WOWSPO," a sports package for external platforms. The primary source of revenue is the monthly viewing fee from subscribers (¥2,530, tax included), and cumulative net subscriptions is the most important management indicator. Consolidated subsidiaries WOWOW Plus, WOWOW Entertainment, and WOWOW BRIDGE are also included in this segment.

Recent Overview

While a rise in business revenue kept overall sales to only a slight decline despite continued decline in membership revenue, segment profit deteriorated significantly, down 38.9%.

In the Media & Content segment for FY2026 (ending March 2026), revenue was ¥70,104 million (down 0.5% year on year), and segment profit was ¥1,382 million (down 38.9% year on year). Cumulative net subscriptions stood at 2,166,701 at period-end, a net decrease of 193,011 (8.2%) from the prior period-end. New subscriptions were 571,398, down 18.9% year on year, significantly below the 764,409 cancellations. The company promoted co-production of the drama "Kenzo Kitakata's Water Margin" under the WOWOW×Lemino brand through its business alliance with NTT DOCOMO, and expanded its commerce and event operations (including the grand opening of WOWOW Department Store), but intensifying competition with other video streaming services and increased cancellations following the conclusion of programs that drove subscriptions weighed on revenue. The cost reduction effect from the discontinuation of the 4K channel remained limited. For FY2026 (fiscal year 2026), the company plans to concentrate management resources on two priorities: launching a new streaming service and expanding content-diversification revenue.

Key Products

Growth Drivers

• Maximizing digital customer acquisition through a new streaming service planned for launch in fiscal year 2026
• Acquiring new subscriptions through the business alliance with NTT DOCOMO (joint content production, joint procurement, and mutual content provision)
• Expanding content-diversification revenue by strengthening external content sales and advertising businesses
• Developing revenue sources outside membership income through commerce (WOWOW Department Store) and event businesses
• Expanding external sales of BtoB (domestic and international production outsourcing) business
• Improving cost structure by withdrawing from unprofitable businesses such as the discontinuation of the 4K channel
• Improving productivity and reducing fixed costs through AI and DX utilization

Risks

• Continued net decline in cumulative net subscriptions (2,166,701 at end of FY2026 (ending March 2026), down 8.2% from the prior period-end)
• Structural decline in membership revenue due to intensifying competition with other companies' video streaming services
• Sharp decline in new subscriptions (down 18.9% year on year) and risk of increased cancellations following the conclusion of feature programs
• Uncertainty regarding achievement of the target of 2.05 million cumulative net subscriptions at the end of FY2027 (ending March 2027)
• Short-term pressure on profit due to concentrated marketing investment in the new streaming service
• Rising costs of procuring high-quality content and impact on profitability
• Risk that the broadcasting business could contract beyond expectations, and risk of delays in transforming the business model