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The Game's Afoot At Rentrak

12 Nov, 2002 By: Joan Villa

Weak demand for rental titles expected to continue through the rest of the year dampened second-quarter revenues and earnings for pay-per-transaction distributor Rentrak.

Rentrak reported revenues of $20.8 million in the quarter ended Sept. 30 versus $22 million in the year-ago period. Net income from continuing operations fell to $173,115 compared to $566,800 in last year's second quarter.

However, the company is diversifying operations, according to CEO and chairman Paul Rosenbaum. Rentrak has signed four agreements in the past two months with video game publishers to revenue-share games, and is negotiating for 15 additional deals, he said. The company also anticipates signing multiple studios to a new automated service to collect and report box-office performance data.

“These strategies have the potential to add high-margin revenue to our business beginning in our fourth fiscal quarter, more than offsetting the transitional revenue and earnings pressure we are experiencing due to current industry trends," Rosenbaum explained in a statement.

The downward rental trend was blamed on DVD growth that has caused a “dramatic transition” in the industry, he added.

“This growing trend caused weak demand for rental titles in our second quarter and we expect demand to weaken further in our third quarter, making these the two worst quarters we're likely to face in terms of available titles,” Rosenbaum said.

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