Rentrak Shrugs Off 23% Profit Decline4 Nov, 2008 By: Erik Gruenwedel
During a quarter that saw DVD sales slip 3.5% and rentals 1.5%, Rentrak Corp. reported a 5% increase in second-quarter (ended Sept. 30) fiscal-2009 pay-per-transaction (PPT) DVD rental revenue to $21.2 million, from $20.3 million during the prior-year period.
The Portland, Ore.-based data-tracking company said the rise was due to higher volumes of title units shipped as consumers sought out rental as a cost-effective alternative to sellthrough in the current economic climate.
The increase marked the second consecutive quarterly gain for the PPT segment.
“Even though the sellthrough and rental DVD businesses are down, we are holding our very well,” said Paul Rosenbaum, chairman and CEO of Rentrak. “Looking at our numbers, I’m going to assume people are going to their local video stores and renting DVDs.”
Revenue in Rentrak’s data tracking businesses (Advanced Media Information) division grew 23%, to $3.1 million from $2.5 million last year. The AMI segment, which includes separate tracking services for cable video-on-demand, retail sales, theatrical revenue, and soon linear TV tracking, is set to launch in the first quarter of fiscal 2010.
The commercial launch of digital download tracking service currently being tested with select studios is slated for later in the fiscal quarter, according to Rosenbaum.
Rentrak said the AMI segment tracks user data for more than 54 million set-top boxes in the United States, which it said represented 100% market penetration.
The company announced that U.K.-based Virgin Media selected Rentrak to track ad revenues for its VOD service. The 90-day trial tracks ads to program genres and tests the range of ad responses on a weekly basis.
Consolidated revenue grew 7%, to $24.3 million in the quarter from $22.8 million last year.
Net income fell 23%, to $842,000 from $1.1 million last year, which the company attributed to increased costs associated with its AMI division, in addition to downturns in the economy and expected effective tax rate.
The company said it had about $26 million in free cash with no debt.