RLJ Entertainment Widens Fiscal-Year Loss15 Apr, 2016 By: Erik Gruenwedel
Distributor exiting Acacia health and fitness direct-to-consumer market
RLJ Entertainment, owner of Image Entertainment and Acorn Media, April 15 reported a fiscal-year (ended Dec. 31, 2015) loss of $54.9 million — up 159% from a loss of $21.2 million during the previous-year period. Revenue declined nearly 10% to $124.9 million from $137.6 million.
Contributing to the loss was RLJ’s fitness business — Acacia Lifestyle — which lost $4 million in 2015 and $1.8 million in 2014. The distributor ceased printing a mail-order catalog and transitioned the brand online, focusing on subscription streaming service Acacia TV.
Separately, Acorn TV, the British-centric over-the-top video service, saw its subscriber base grow 65.3%, reaching 195,000 paid subscribers. The service continues to grow despite Netflix’s strong lineup of BBC programming, including original fare “Happy Valley.”
Last December, RLJ placed all three of its proprietary SVOD channels — Acorn TV, Acacia TV and Urban Movie Channel — on Amazon’s new third-party SVOD platform. Dubbed “Streaming Partners Program,” Amazon, for an un-disclosed fee, markets third-party streaming services to its Prime membership base, which includes billing and backend support.
As media companies and content owners — panicking over alleged millennial indifference and the shrinking pay-TV channel bundle, scramble to launch and/or support SVOD services, Amazon’s SPP initiative attempts to provide clarity in crowding SVOD market.
“Prime's add-on streaming video service launch provides us with a significant expansion in audience reach and brand awareness,” RLJ said in a statement.
Regardless, RLJ Entertainment faces fiscal challenges. It ended 2015 with just $4.5 in cash and $65.5 million in debt. It also completed $31 million in capital restructuring by selling shares of preferred stock and warrants to acquire common stock.
"We have taken significant steps to clean up our balance sheet and de-lever the business,” CEO Miguel Penella said in a statement.