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Tactics: The tracker

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Saturday, November 01, 2008

We don’t know who you are, but we know what you are watching.

AS HE RACES THROUGH a PowerPoint presentation describing the vast potential of the $93 million media-tracking empire he oversees, Rentrak CEO Paul Rosenbaum pauses to shake his head and say, “I just love this stuff.” By his own admission he knew nothing about the intricacies of information management before gaining control eight years ago of the Portland-based media tracker. It wasn’t his technical knowledge that earned him the job. It was his willingness to fight until he won.


RENTRAK
Publicly traded (ticker: RENT)

HEADQUARTERS: One Airport Way, Northeast Portland

EMPLOYEES: 275

CEO: Paul Rosenbaum

FISCAL 2008 REVENUES: $93.2 million

NEW DEVELOPMENTS: compiling second-by-second television data to sell to advertisers and agencies

PaulRosenbaum
PAUL ROSENBAUM, CEO of Rentrak

PHOTO BY ADAM BACHER

Prior to taking over Rentrak, Rosenbaum, now 65, was a state legislator in Michigan, a trial attorney, founder and CEO of a chemical company (he didn’t know anything about chemicals either, he says), and co-owner of a boxing tour called the Toughman.  The Toughman competition required the champion to defeat four separate opponents in a single day. Rosenbaum, a straight-talking former Golden Gloves boxer with photos of Thomas Hearns and Sugar Ray Leonard on his office walls, clearly relishes a fight. He took over Rentrak by winning a proxy battle over corporate governance in 2000. His original plan was to stay six months as interim CEO, but he changed his mind after seeing an opportunity to lead Rentrak into a whole new area.

Rentrak under Rosenbaum has won a few skirmishes, growing into the top monitor of box-office receipts and video-on-demand data, but the larger battle lies ahead. It has to do with tracking the sprawling world of television, long dominated by the industry’s Goliath: the Nielsen Company. Nielsen ratings are the industry standard, but Rosenbaum is quick to point out that Nielsen only covers the top 25 of 425 networks. Rentrak’s programmers are honing a TV Essentials package to track all networks in all markets, analyzing audience retention and ad performance for advertisers and agencies.

“We can track it second by second,” he says. “This is invaluable to the advertiser. In the past advertising was 50% useless but nobody knew which 50%. It’s a whole different world now.”

To expand into this new business, Rentrak, which has 275 employees, uses the steady revenues of its legacy business of distributing home entertainment to retailers on a pay-per-transaction basis. That was what Rosenbaum inherited after he won the proxy battle: a video distribution business in danger of becoming obsolete. What Rosenbaum decided after consulting with his IT managers was that Rentrak’s greatest asset was the tracking system it had built to follow store-by-store transactions.

With minor modifications, the same proprietary system now covers movies, video-on-demand, mobile devices and cable television. According to Rosenbaum, Rentrak monitors 113 million box-office transactions, 4 billion on-demand transactions and 365 billion TV transactions per year. In case you’re wondering, a television “transaction” consists of a viewer changing channels and keeping it on the new station for 20 seconds or more.

To turn those clicks into money, Rentrak will need to beat Nielsen to the punch: a daunting task but not unprecedented. Rentrak took away Nielsen’s business of tracking box-office revenues for Hollywood studios and today has 100% market penetration in that area. “We are the only company in the world that has unseated Nielsen in one of their existing businesses,” Rosenbaum says, sounding like he’s ready for a scrap. “They may have underestimated us in the past, but they probably won’t in the future.”                       

BEN JACKLET


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