JumpTV Subscriptions Grow 32% in Third Quarter
November 8, 2006TORONTO--(CCNMatthews - November 08, 2006) - JumpTV Inc. ("JumpTV" or "the Company") (TSX: JTV) (AIM: JTV), the world's leading broadcaster of ethnic television over the Internet, today announced quarterly results and selected financial metrics for the quarter ended September 30, 2006.
Revenue for the third quarter 2006 increased 58% to US $534,671 from US $337,389 in the same period a year ago. Sequentially, revenue increased 25% from US $426,998 in the second quarter 2006.
Net loss for the quarter ended September 30, 2006 was US $6,494,411 or US $0.23 per basic and diluted share compared to US $1,086,525 or US $0.08 per basic and diluted share in the same period a year ago and US $6,449,005 or US $0.31 per basic and diluted share in the quarter ended June 30, 2006. During the quarter, the Company invested heavily in the development of its next generation product offering (JumpTV 3.0), and continued to invest in personnel dedicated to its global business development efforts in connection with obtaining additional channel partnerships and marketing partnerships with major ISPs and Internet portals.
JumpTV had 225 channels signed as of September 30, 2006, as compared to 204 channels as of June 30, 2006 and 59 channels as of September 30, 2005.
Subscriptions increased 32% to 23,885 from 18,119 in the second quarter 2006 and subscribers increased approximately 35% to 22,019 for the third quarter 2006 from 16,319 in the second quarter 2006. Average Monthly Churn was 22.8% compared to 15.8% for the quarter ended June 30, 2006. The $0.99 first-month subscriber promotion resulted in a high churn rate during the quarter as certain subscribers cycled in and out of the offer.
For the third quarter of 2006, JumpTV's subscriber acquisition cost (SAC) was US $21.80 compared to US $30.00 in the second quarter of 2006. The Company's natural search optimization initiatives and the increased number of subscribers acquired through affiliate marketing partners were the primary drivers of the 26% reduction in subscriber acquisition cost (SAC) during the quarter.
Average monthly Revenue per User (ARPU) was US $9.43 in the quarter ending September 30, 2006 compared to US $10.31(1) in the second quarter of 2006. The Company's ARPU declined due to the testing of a $0.99 first-month subscriber promotion and other test marketing initiatives. The Company expects to continue to introduce additional channel bundles at higher monthly subscription rates (e.g. approximately $15/month) which is expected to increase ARPU in future quarters.
G. Scott Paterson, Chairman & CEO of JumpTV, said:
"We are delighted with the growth in subscriptions in Q3 particularly in light of the fact that our focus has been and continues to be, in the near term, securing new channel partnerships, improving our user experience and developing marketing partnerships around the world (which are soon to be launched).
We have made significant strides in all aspects of our business. We have signed, on average, two new channel partnerships a week, bringing our total number of partners to 233 as of today's date. Among our recently announced channel partnerships are MBC, one of the top pan-Arab general entertainment channels, Al Arabiya News Channel, one of the leading Arabic language news channels worldwide and Television Broadcasts Limited (TVB), one of the world's largest producers of Chinese-language television programming.
Very significantly, we launched JumpTV 3.0, our new online television experience. JumpTV 3.0 adds video-on-demand, pay-per-view and social networking functionalities to our platform as well as enhanced digital rights management and pre-roll advertising capabilities.
We have recently entered into marketing agreements with Comcast, the largest broadband ISP in the United States, Que Pasa, a leading Hispanic oriented portal, and Maktoob, one of the world's most visited Arabic online destinations; each of which we expect to launch commercially prior to year-end.
We have worked diligently to put in place the requisite components of our business strategy necessary to drive subscriber growth in 2007 and beyond."
(1) The Company reported an ARPU of $9.91 in the prior quarter by dividing total subscriber-related revenues for the period by the average subscribers for that period. Average subscribers for the period were calculated by adding the total subscribers at the end of each month and by dividing by the number of months in the period. We have adjusted this figure to $10.31 to be consistent with the definition we disclosed in both our prospectus and prior quarters Management Discussion and Analysis. This definition states that ARPU is calculated by dividing total subscriber-related revenues for a period by JumpTV's average subscribers for that period. Average JumpTV subscribers for a period is calculated by adding the average JumpTV subscribers for each month and dividing by the number of months in the period. Average JumpTV subscribers for each month are calculated by adding the beginning and ending JumpTV subscribers for the month and dividing by two.
The company will hold a conference call to discuss its third quarter results at 8:00 a.m. PST, 11:00 a.m. EST and 4:00 p.m. GMT on Wednesday, November 8, 2006. A replay of the call will be available for 7 days using the following dial-in numbers: US - 1-877-519-4471 or International - 973-341-3080; conference code 8068898. The call will also be available via live audio cast on the JumpTV website, located at www.jumptv.com. The audio cast will be archived on the Company's website for a period of 30 days.