Rentrak Posts Q3 Gains, Hints at Probable Name Change12 Feb, 2004 By: Erik Gruenwedel
Spurred in part by its combined VHS/DVD revenue-sharing programs with Warner Home Video, MGM Home Entertainment, and 20th Century Fox Home Entertainment, Rentrak Corp. posted a 25 percent increase in entertainment revenue, to $19.4 million for the third quarter ended Dec. 31, 2003.
In a conference call with investors, Rentrak chairman and CEO Paul Rosenbaum said emerging business opportunities in video on demand (VOD), supply-side data tracking and business intelligence led him to believe that Rentrak should change its corporate name.
“The name is synonymous with a company that was started 18 years ago in the video rental business,” Rosenbaum said. “We are going in a different direction than VHS revenue sharing. The timing is right for us to seriously consider a different name.”
Rosenbaum wouldn't comment what Rentrak's new name might be or when a name-change would be implemented.
Calling its DVD/VHS rental revenue agreement with Warner as its largest, Rosenbaum said up to four other studios are contemplating similar agreements and that Rentrak will benefit “proportionately” if “ongoing discussions” result in agreements with the studios in the next six-to-nine months.
“The more we continue to expand the number and quality of titles we offer, the more we will grow this portion of our business,” Rosenbaum said.
Rosenbaum projects a 15 percent to 20 percent increase in revenue for the fourth quarter.
In addition to its core rental revenue business, Rosenbaum believes VOD tracking data will become a “meaningful” contributor to Rentrak's future revenue growth.
“It is difficult to estimate just how large the potential size of this market for Rentrak,” Rosenbaum said. “VOD availability is increasing rapidly among consumers. This line of business that I had thought was years off now appears to be much closer to reality.”
When asked if Rentrak was negotiating a VOD data tracking agreement with cable operator Comcast, Rosenbaum wouldn't comment except to say that Rentrak continues to meet with all cable operators.
For the quarter, Rentrak had a net income of $792,500, or 8 cents per diluted share, compared with a net loss of $374,600, or 4 cents per share, during the same period last year.
During the third quarter last year, Portland, Ore.-based Rentrak had revenue of $21.3 million, however $5.8 million of that came from 3PF, a third-party fulfillment center that Rentrak ended a relationship with during the quarter.