Rentrak Q3 Profit Slips, Revenue Up6 Feb, 2007 By: Erik Gruenwedel
An influx of rental DVDs earmarked with guaranteed minimum revenue terms in its pay-per-transaction (PPT) business resulted in Rentrak Corp. posting fiscal year 2007 third quarter (ended Dec. 31) income down 4.5% to $1 million compared to $1.1 million during the same period last year.
The Portland, Ore.-based media-measurement company expects those titles to exceed its guaranteed revenue minimums during the first quarter of fiscal year 2008, including contributing higher margins in that period.
Rentrak, which has posted profit increases over the past two quarters, reported a 12% increase in revenues to $26.8 million from $24 million last year.
Revenue for company's PPT business increased 10.7% to $23.1 million, compared to $20.9 million last year.
“The movie-rental market has proven to be much more resilient than industry forecasts over the past few years,” said Paul Rosenbaum, Rentrak chairman and CEO, in an investor call. “We expect PPT revenues in the fourth quarter to remain level with revenues in the third quarter. It is a matter of the timing of the movie releases and how quickly we blow through the guarantees.”
The advanced-media and information segment, which includes Rentrak's expansive “Essentials” data tracking of box office, on-demand, supply chain, retail and home video, saw revenues increase 18.4% to $3.7 million compared to $3.1 million last year.
Rentrak said it monitors point-of-sale transactions from more than 10,000 retail locations in North America.
Rosenbaum said the on-demand tracking unit monitored 2.2 billion on-demand program orders between its network and MSO clients, which represented more than 42 million set-top boxes, 23 million households or about 60% of cable-enabled homes.
The CEO said he was excited by the value Rentrak's on-demand data tracking could have when cable operator Comcast reportedly begins offering VOD of select prime-time network programming.
“We expect to be part of that system and to monetize at least a part of that for ourselves,” Rosenbaum said.
The company announced it had signed video-on-demand (VOD) tracking deals with six new content providers: A&E Television Networks, CNET, Havoc TV, IFC Films, The Inspirational Network and PBS Kids Sprout.
Rentrak also signed three new multilevel cable operators (MSOs), including Armstrong's telecommunications, which provides broadband and cable services to Kentucky, Maryland, New York, Pennsylvania, Ohio and West Virginia; Elijay Telephone, which serves systems in Northern Georgia; and Wide Open West (WOW), a cable, internet service and telephone service provider that operates in metro areas of Colorado, Illinois, Indiana, Michigan and Ohio.