TORONTO - The former general manager of EBay Canada, who took the reins at Internet broadcaster JumpTV Inc. (TSX:JTV) just over a week ago, says the company could build its position by focusing on growth in niche communities to drive its business as it expands and cutting costs in the short term.
"We have a global footprint of people with like passion and like interests. When you have that as a foundation, you have the ability to build these incredibly robust, unique niche communities," said Jordan Banks, the new chief executive said Tuesday.
The mild shift in focus could be a sign of major changes at the company, which was created seven years ago. It could also be the first step towards migrating the subscriber-based business towards an advertising model.
JumpTV, which reports in U.S. dollars, posted a $6.5-million loss in the summer quarter, about the same as a year ago. The loss equalled 13 cents per share compared with 23 cents on fewer shares a year ago.
Revenue nearly quadrupled to $2 million from $535,000 last year, largely thanks to acquisitions
The revenue boost followed the consolidation of CyclingTV on Aug. 1 and the addition of the broadband sports network operation of XOS Technologies on Sept. 1.
Banks said JumpTV needs to look at cutting costs and centralizing its operations in the "very short order."
He emphasized that it didn't mean shifting its field experts, located in the international markets they serve, to the company's headquarters.
"What I'm really talking about is taking some of the key functions that exist across the company, making sure there is no redundancy of effort and headquartering as many people as I can in Toronto where as a management team and executive team we can see each other," he said.
JumpTV broadcasts programming over the Internet, primarily through video streaming. The company has 305 channel partnerships including 175 with U.S. college and professional sports teams, growing from a total of 225 a year ago. It also has distribution rights for a number of international cultural channels, particularly targeting Latino and Asian viewers.
"My vision is you take these niche segments - whether it's niche by geography, by interest, by language - you provide them to the tools to build these niche communities, and once you have that sticky, passionate, engaged community, essentially what you've built is an ad network," Banks told investors at a special meeting.
"We are uniquely positioned to build those ad networks in a very robust way."
Banks also said that JumpTV needs to focus on "Tier 1" content - or high-quality programming - in order to boost its subscriber count.
"Traditionally the company has said 'we need to go out there and capture as much content as we can, regardless of what tier it's in and where it's located,"' he said.
"That has served the company fairly well to date with no question in my mind we need to switch that dynamic and start focusing on quality of content rather than quantity of content."
Of the latest quarter's revenue, $287,000 was from advertising, while the subscriber count rose to 86,000 at Sept. 30, up by 56,000 in three months. JumpTV said it had 94,000 subscribers as of this week.
The third-quarter net loss included $686,000 in stock-based and other non-cash compensation, and $1 million in amortization.
July-September churn was 13.2 per cent, while subscriber acquisition costs declined 57 per cent from the second quarter to $14.49 per client, thanks to "an increased focus on search engine optimization, targeted event-driven marketing campaigns and a reduction in marketing expenses."
JumpTV ended the quarter with $60.2 million in cash.
The company's shares closed up five cent or about 2.5 per cent at $2.08 on the Toronto Stock Exchange Tuesday.
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