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Rentrak Tracks 70% VOD Market; Q3 Profit Dips Slightly

7 Feb, 2006 By: Erik Gruenwedel

A 5.7% increase in pay-per-transaction (PPT) video commerce was not enough to overcome higher cost of sales, as Rentrak Corp. posted third-quarter (ended Dec. 31) net income of $1.1 million.

The Portland, Ore.-based company reported income of $1.2 million during the same period last year. Revenues for the quarter totaled $23.9 million, compared to $22.8 million last year.

Rentrak is on track to exceed fiscal year revenue guidance of $80 million by nearly $10 million.

In an investor call, Rentrak chairman and CEO Paul Rosenbaum said the company's venerable PPT business actually increased 17% when excluding the residual effect of Hollywood Video's acquisition by Movie Gallery.

He said the higher costs were attributed to minimum guaranteed unit shipments from two unidentified studios.

“The overall rental business was flat or down in December,” said Rosenbaum.

Citing ongoing diversity of digital entertainment distribution, Rosenbaum said the company beginning in fiscal 2007 would expand its on demand data tracking services from cable to include wireless, satellite, digital video recorders and Telco's.

“Eventually, all content will be delivered via some type of Internet protocol,” said Rosenbaum. “The lines of differentiation between [cable, satellite, cell phones, PCs and MP3 players] are getting blurred.”

Rosenbaum said the company tracked 70 percent of all cable video-on-demand activity (1.7 billion individual views) in the quarter and would begin officially reporting on demand revenues in the first quarter FY Q1.

He said the day-and-date release of director Steven Soderbergh's film Bubble underscored the growing importance of data tracking.

“Multiple simultaneous feedback demands those needs to be responded to,” said Rosenbaum. “The business of information and intelligence data tracking is transferring from the studios to the TV networks and advertising agencies.”

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