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'Unfavorable' DVD Release Slate Slows Rentrak Q1

7 Aug, 2007 By: Erik Gruenwedel

Rentrak Corp. posted first quarter fiscal 2008 (ended June 30) net income of $1.3 million, compared to income of $1.6 million during the same period last year.

The absence of content from its fifth largest program supplier (rumored to be Warner Home Video) and an unfavorable home video release schedule contributed to a 12.7% decline to $22 million, from $25.2 million in the company's pay-per-transaction (PPT) business.

By comparison, the advanced-media and information (AMI) segment, which includes Rentrak's expansive “essentials” data tracking of box office, on-demand, television, supply chain, retail and home video, saw a 37.6% increase in revenue to $2.4 million, from $1.7 million last year.

Total revenues reached $24.3 million, compared to $26.9 million last year.

In a call with investors, Rentrak chairman and CEO Paul Rosenbaum said fragmentation within the industry, spurred by digital distribution of content, continues to alter the ways in which media is consumed, thereby underscoring the importance of the Portland, Ore.-based media measurement company's data gathering business.

“In our view, the industry's accelerating pace of change and curiosity about new distribution methods expands what is already a distinct opportunity for Rentrak,” Rosenbaum said.

He said PPT revenues would decline in the second and third quarters as home entertainment continues to experience a decline in rental activity.

“Even if we succeed in reaching an agreement with this [fifth largest program] supplier through fiscal 2008, it will not benefit our PPT business materially until the first quarter of [fiscal 2009],” Rosenbaum said.

He said Rentrak has completed the first version of data gathering (Switch Digital Video) of advertising and programming viewed via digital TV set-top boxes and would implement rollout of the technology in the next 12-to-24 months.

Rentrak currently collects data from 42 million set-top boxes.

The technology circumvents the need to attach a special device to set-top boxes that transmits on-demand usage data to a central server and then to Rentrak. The company said the technology could also be used to monitor traditional linear TV programming.

“[The software] will fundamentally alter the way in which cable programming and advertising is delivered to set-top boxes,” Rosenbaum said.

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