New Frontier Media Sees PPV Up, Eyes Euro IPTV Expansion

Rhett Pardon
BOULDER, Colo. — New Frontier Media’s CEO says pay-per-view sales numbers are up, despite a slumping global economy.

Further, the company expects those numbers to stay up through fiscal 2010, said Michael Weiner in a conference call Monday discussing the release of the company’s third-quarter earnings.

“Even in a very challenging economic environment, New Frontier Media grew its core transactional TV quarterly revenue by six percent and maintains a solid financial foundation,” Weiner said. “During the quarter, we continued to build on our previous successes in the transactional TV segment and launched our content to more than 2 million international pay-per-view network homes and more than 5.5 million international video-on-demand network homes.”

New Frontier Media already reaches 179 million U.S. households, where it is the exclusive distributor of Penthouse-branded TV content.

Weiner noted that New Frontier Media recently inked a new video-on-demand deal that would reach more than 3 million homes. Weiner, who wouldn’t disclose the carrier, said he expects to launch content on the platform later this year.

Weiner also said that its marketing of IPTV services are moving on schedule in the U.S., have slowed in the U.K. and will be expanded to other European countries.

“[In the U.S.], we have experienced little churn as we enter our fourth billing cycle with our initial customers,” he said. “[But] while our U.K. customers have positive reactions, we are cognizant that the economy has hindered adoption.

“Because the technology has been well-received and has universal operability, we are evaluating options for expanding the territory in which we make our set-top box available,” said Weiner, who noted that New Frontier Media is launching affiliate programs throughout Western Europe. “We are using this marketing approach as a more cost-effective means of acquiring new customers.”

Ken Boenish, New Frontier Media’s president, said that expanding into Western Europe is a natural move for the company.

“The reason why we’ve decided to sort of cast a wider net and include all of Western Europe is that because of our server location in Amsterdam, we are really able to easily serve all of Europe. And we really don’t see a reason why we should constrict our activity just to the U.K. at this time.”

The company on Monday posted a third-quarter net loss of $8.85 million, as compared to net income of $3.13 million in the prior-year quarter. The results were negatively affected mainly by goodwill and asset impairment charges.

Revenue for the quarter decreased to $12.62 million from $17.92 million, hurt by shrink in revenue from film production to $1.8 million from $7.6 million.

For the fiscal year, New Frontier Media reported a net loss of $6.4 million, compared to net income of $6.8 million. Net sales declined to $39.1 million from $43.3 million.

New Frontier Media shares on Monday traded at $1.59, down 11 cents, on the Nasdaq.