Rentrak Extends Comcast VOD Deal; Q1 Profit Drops 53 Percent10 Aug, 2005 By: Erik Gruenwedel
Comcast Corp. Tuesday became the first cable operator to transition from a trial program to a multiyear commercial agreement with Rentrak Corp.'s nascent OnDemand Essentials data tracking service for video-on-demand and pay-per-view.
Portland, Ore.-based Rentrak has ongoing separate trial pacts with Cablevision, Charter, and Insight Communications, and tabulates customer usage data from Bresnan Digital Cable subscribers located throughout seven mountain states.
“We expect the Comcast announcement to increase awareness and interest in OnDemand Essentials across the media and advertising industries,” said Rentrak chairman and CEO Paul Rosenbaum in an investor conference call. “OnDemand Essentials has the ability to aggregate data from the entire North American cable industry.”
Cable music provider Music Choice is the first content provider to subscribe to the service.
Rosenbaum said the major studios comprise the bulk of business for Rentrak's information services (IS) segment, which includes direct revenue sharing, Box Office Essentials and Home Video Essentials. He said he expects ongoing syndication of aggregated views of data to industry research analysis and trade publications to eventually encompass more than “300 distinct content producers in North America and hundreds more in Europe, Asia and Latin America.”
Rentrak expects the IS unit to report incremental income beginning in fiscal 2007.
That said, 16 percent increases in pay-per-transaction (PPT) and revenue-sharing businesses wasn't enough to overcome ongoing revenue shortfalls caused by the departure of former PPT client Hollywood Video last September.
As a result, Rentrak posted a $744,412 decrease in net income to $655,588, or 6 cents per diluted share, on revenue of $20.9 million for the first-quarter fiscal year 2006 ended June 30.
Revenue was fueled in part by $18.2 million from PPT and $2.53 from IS. Hollywood had accounted for $8.2 million, or 32 percent, of the company's $25.3 million in revenue during the first-quarter fiscal 2005, including net income of $1.4 million, or 13 cents per diluted share.
Now a subsidiary of Movie Gallery, Hollywood's financial departure is expected to have a similar effect on Rentrak's second-quarter revenue, according to Rosenbaum.
Nonetheless, he remained pleased that increased revenue-sharing deals with independent video retailers had helped Rentrak “outperform the [rental] industry.”
He expects the company to generate up to $85 million in revenue for fiscal-year 2006.