The adult entertainment company, which operates pay-per-view and video-on-demand channels, said its hold of the market is shrinking but that industry growth is expanding.
“Playboy, Hustler and even Playgirl have made inroads to the video-on-demand sector,” New Frontier CEO Michael Weiner said Wednesday in a conference call. “It is going to stay competitive for the next 24-36 months.”
Still, New Frontier continues its strength in the hotel category and video-on-demand represents 36 percent of the company’s net income.
“With confidence, our product performs much better in the hotel market,” Weiner said. “We are confident that we will continue to lead the sector.”
New Frontier plans to ramp up marketing by 20 percent in the coming fiscal year, said CFO Karyn Miller, who noted that the company will have a heightened presence at trade shows.
In the fourth quarter, New Frontier’s revenue fell about 3 percent to $10.8 million, compared to $11.1 million for the same quarter a year ago. Net income for the current year quarter was $2.4 million, net of tax, as compared to net income of $3.3 million for the fourth quarter a year ago.
The Boulder, Colo.-based company, which owns The Erotic Networks including Pleasure and seven of its Ten-branded specialty channels, said it expects 2006 revenue in the range of $44.5 million to $46 million.
“Fiscal year 2005 was the most profitable year in the history of our company,” Weiner said. “We are very proud of what we have accomplished and are optimistic that even better years are ahead.”
Shares of New Frontier Media Inc. in midday trading on the Nasdaq were down 1 cent at $5.89.
