New Frontier Media Sees 2nd Quarter Dip in Revenue

Rhett Pardon

BOULDER, Colo. — New Frontier Media Inc., citing more consumer choices and lower discretionary spending, said revenue dipped in its pay-per-view and video-on-demand segments in the past quarter.

But the adult entertainment company, whose cornerstone is The Erotic Network, or TEN, said that it is shoring up declining numbers with new and unique content packages, including short-form, lower-priced content.

New Frontier Media, in its 2012 second-quarter results released Monday, said that revenue overall dipped to $10.3 million as compared to $11.2 million in the same prior-year quarter.

For its transactional TV (pay-per-view and VOD) segment, revenue in the second quarter decreased to $8.7 million, as compared to $9.1 million in the same prior year quarter.

U.S. revenue declined by $100,000 for VOD and $300,000 within pay-per-view category in the past three months, ending Sept. 30.

"[W]e believe these results reflect weaker consumer discretionary spending for our products, as well as competition from other alternatives such as lower cost and free Internet websites," New Frontier Media CFO Grant Williams said in a conference call.

Michael Weiner, New Frontier Media's CEO, said that the company is gaining traction on its new initiative of short-form, lower priced content.

"[T]he new content packages have been tested in certain customers markets and the results of these tests have been positive," he said Monday. "We are optimistic that the expansion of these initiatives throughout the U.S. markets will improve the transactional TV segment’s domestic performance.

"However, we expect the impact from the rollout of these initiatives will be gradual and occur over time, due to the long lead-time in marketing and executing these plans with our customers."