According to the data released by Private, the company’s wireless sales climbed 19 percent from the same period last year, reaching $1.02 million in sales for the quarter. Internet sales saw a similar bump, increasing 12 percent to $2.05 million, while broadcasting jumped more modestly, climbing 3 percent to $3.67 million.
Private’s new media sales for the quarter totaled more than $6.6 million, representing 60 percent of the company’s total net sales for the quarter, an increase of 8 percent over the same period last year.
Private’s hard goods sales were off significantly from the third quarter of 2006, as revenues from DVD and magazine sales decreased 18 percent to $4.4 million — part of what Private described as an “industry-wide decrease in DVD sales.”
The company cited its flagging DVD and magazine sales and “continued strategic transitional factors” as the reason its net sales dipped 4 percent to $11.02 million for the quarter.
As Private forges ahead into 2008, the company expects to see significant increases in its wireless and broadcasting sales, and Private anticipates particularly strong gains in the IPTV market, according to CFO Johan Gillborg.
“During the 12-month period ending June 30, the European IPTV market experienced a tremendous growth of 231 percent to 5 million IPTV subscribers and based on this number we have reached a 74 percent (3.7 million subscribers) coverage of this market,” Gillborg said.
Gillborg noted that IPTV expansion is coming fastest in the European market, where users are “signing up for IPTV services in the hundreds of thousands each month, making Europe the biggest and fastest growing IPTV region in the world.”
“We have successfully implemented part of our new media strategy and contracted for supplying content for TVOD services with 23 major platform operators in 11 territories in the region,” Gillborg said.
Gillborg also is enthusiastic about Private’s prospects for growth in the mobile content market, which he said is “still in its infancy.” As of September, Gillborg said that Private content was available to more than 783 million handsets in 34 countries, via 81 operators, including 21 operators that went live with their services in 2007.
“The markets of Asia and the Americas are currently underexploited and therefore represent a significant growth potential to the company,” Gillborg said. “Mobile TV, increased penetration of 3G handsets and the implementation of age-verification systems offer additional significant growth potential with both current and future operators in 2007 and beyond.”
Gillborg said that he expects hard product sales to continue to decline in the months ahead, and that Private is restructuring its hard-product distribution system in order to offset its losses in that sector.
“As we are moving further into a world of global digital content delivery, DVD pricing and volume is being affected considerably and as a result the industry in general is experiencing a severe downturn in DVD sales,” Gillborg said. “During the first quarter of 2007 we started a reorganization of our distribution of DVDs and magazines. Through this reorganization, we expect to maximize existing sales and over time reduce the revenue impact of this on our overall business.”
Private also announced today that it the company is making its first foray into the U.S. VOD market, with a deal that will reach more than five million U.S. subscribers and offer the content in multiple languages.
"We are extremely happy that this foreign language package is a unique way to differentiate us from the other adult VOD offerings currently in place," said Private COO Peter Cohen. "This is a perfect fit for our high quality movie content. Private movies are currently available in 8 languages: English, French, Dutch, German, Portuguese, Italian, Greek and Spanish. With over 20% of the US population speaking Spanish, this is a significant unique selling point for this VOD offering and gives us a leading edge for gaining huge exposure in the highly competitive US market."
