10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2006

OR

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to            

Commission file number: 0-15159

RENTRAK CORPORATION
(Exact name of registrant as specified in its charter)

Oregon	93-0780536
(State or other jurisdiction of incorporation	(I.R.S. Employer Identification No.)
or organization)

7700 NE Ambassador Place, Portland, Oregon	97220
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: 503-284-7581

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act:

Large accelerated filer  o    Accelerated filer x    Non-accelerated filer o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes o    No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common stock $0.001 par value	10,562,432
(Class)	(Outstanding at November 1, 2006)

RENTRAK CORPORATION
FORM 10-Q
INDEX

PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets — September 30, 2006 and March 31, 2006 (unaudited)
	Condensed Consolidated Income Statements - Three and Six Months Ended September 30, 2006 and 2005 (unaudited)
	Condensed Consolidated Statements of Cash Flows - Six Months Ended September 30, 2006 and 2005 (unaudited)
	Condensed Consolidated Statements of Stockholders’ Equity — Years Ended March 31, 2005 and 2006 and Six Months Ended September 30, 2006 (unaudited)
	Notes to Condensed Consolidated Financial Statements (unaudited)
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.	Quantitative and Qualitative Disclosures About Market Risk
Item 4.	Controls and Procedures
PART II - OTHER INFORMATION
Item 1A.	Risk Factors
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
Item 4.	Submission of Matters to a Vote of Security Holders
Item 6.	Exhibits
Signatures

Rentrak Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except per share amounts)

	September 30,			March 31,
	2006			2006 (1)
Assets
Current Assets:
Cash and cash equivalents	$	7,714		$	15,666
Marketable securities	22,089			14,832
Accounts receivable, net of allowances for doubtful accounts of $447 and $461	14,720			18,314
Note receivable	451			—
Advances to program suppliers, net of program supplier reserves of $18 and $32	87			225
Income tax receivable and prepaid taxes	48			—
Deferred income tax assets	107			110
Landlord receivable	415			—
Other current assets	689			607
Total Current Assets	46,320			49,754
Property and Equipment, net of accumulated depreciation of $5,443 and $5,876	5,126			3,623
Deferred Income Tax Assets	417			312
Other Assets	622			639
Total Assets	$	52,485		$	54,328
Liabilities and Stockholders’ Equity
Current Liabilities:
Accounts payable	$	10,395		$	15,493
Taxes payable	903			972
Accrued liabilities	548			532
Deferred rent, current portion	20			—
Accrued compensation	885			1,366
Deferred revenue	502			484
Total Current Liabilities	13,253			18,847
Deferred rent, long-term portion	791			—
Notes payable	598			—
Commitments and Contingencies	—			—
Stockholders’ Equity:
Preferred stock, $0.001 par value; 10,000 shares authorized; none issued	—			—
Common stock, $0.001 par value; 30,000 shares authorized; shares issued and outstanding: 10,558 and 10,697	11			11
Capital in excess of par value	46,912			48,069
Accumulated other comprehensive income	181			181
Accumulated deficit	(9,261		)	(12,780		)
Total Stockholders’ Equity	37,843			35,481
Total Liabilities and Stockholders’ Equity	$	52,485		$	54,328

(1)Derived from our March 31, 2006 audited consolidated financial statements.

See accompanying Notes to Condensed Consolidated Financial Statements.

2

Rentrak Corporation and Subsidiaries
Condensed Consolidated Income Statements
(Unaudited)
(In thousands, except per share amounts)

	For the Three Months Ended September 30,						For the Six Months Ended September 30,
	2006			2005			2006			2005
Revenue	$	24,083		$	20,164		$	50,984		$	41,046
Operating expenses:
Cost of sales	15,561			13,518			34,147			28,350
Selling and administrative	5,833			5,161			11,789			10,333
	21,394			18,679			45,936			38,683
Income from operations	2,689			1,485			5,048			2,363
Other income (expense):
Interest income	341			254			695			410
Interest expense	(1		)	(1		)	(2		)	(2		)
	340			253			693			408
Income before income taxes	3,029			1,738			5,741			2,771
Provision for income taxes	1,098			634			2,222			1,011
Net income	$	1,931		$	1,104		$	3,519		$	1,760
Basic net income per share	$	0.18		$	0.10		$	0.33		$	0.17
Diluted net income per share	$	0.17		$	0.10		$	0.32		$	0.16
Shares used in per share calculations:
Basic	10,553			10,551			10,617			10,550
Diluted	11,102			11,061			11,129			11,080

See accompanying Notes to Condensed Consolidated Financial Statements.

3

Rentrak Corporation and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)

	For the Six Months Ended September 30,
	2006			2005
Cash flows from operating activities:
Net income	$	3,519		$	1,760
Adjustments to reconcile net income to net cash flows provided by operating activities:
Tax benefit from stock option exercises	154			43
Depreciation and amortization	822			815
Loss on disposal of fixed assets	33			—
Adjustment to allowance for doubtful accounts	(14		)	(133		)
Stock-based compensation	458			—
Deferred income taxes	(102		)	968
(Increase) decrease in:
Accounts receivable	3,608			1,858
Notes receivable issued to customers	(451		)	—
Advances to program suppliers	138			993
Landlord receivable	(415		)	—
Income taxes receivable and prepaid taxes	(48		)	124
Other assets	(258		)	6
Increase (decrease) in:
Accounts payable	(5,098		)	(3,246		)
Accrued liabilities and compensation	(534		)	(209		)
Deferred rent	811			—
Deferred revenue and other liabilities	18			88
Net cash provided by operating activities	2,641			3,067
Cash flows from investing activities:
Purchase of marketable securities	(7,257		)	(14,813		)
Purchase of property and equipment	(2,348		)	(1,001		)
Note receivable payments received	183			252
Net cash used in investing activities	(9,422		)	(15,562		)
Cash flows from financing activities:
Payments on capital lease obligations	—			(24		)
Proceeds from notes payable	598			—
Issuance of common stock	179			75
Repurchase of common stock	(1,948		)	—
Note receivable, related party	—			753
Net cash provided by (used in) financing activities	(1,171		)	804
Decrease in cash and cash equivalents	(7,952		)	(11,691		)
Cash and cash equivalents:
Beginning of year	15,666			21,983
End of period	$	7,714		$	10,292
Supplemental cash flow information:
Cash paid during the period for interest	$	—		$	2
Cash paid during the period for income taxes, net	2,285			110
Supplemental non-cash information
Common stock withheld in payment of exercise price for stock options	$	238		$	—

See accompanying Notes to Condensed Consolidated Financial Statements.

4

Rentrak Corporation and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited)
(In thousands, except share amounts)

								Cumulative
					Capital			Other					Total
	Common Stock				In Excess			Comprehensive		Accumulated			Stockholders’
	Shares		Amount		of Par Value			Income		Deficit			Equity
Balance at March 31, 2004	9,739,537		$	9	$	41,094		$	181	$	(22,489	)	$	18,795
Net income	—		—		—			—		5,243			5,243
Common stock issued pursuant to stock plans	522,557		1		2,394			—		—			2,395
Common stock used to pay for option exercises	(25,381	)	—		(270		)	—		—			(270		)
Issuance of common stock	308,200		—		2,774			—		—			2,774
Income tax benefit from stock option exercises	—		—		996			—		—			996
Balance at March 31, 2005	10,544,913		10		46,988			181		(17,246		)	29,933
Net income	—		—		—			—		4,466			4,466
Common stock issued pursuant to stock plans	152,423		1		707			—		—			708
Fair value of options granted to non-employee	—		—		219			—		—			219
Income tax benefit from stock option exercises	—		—		155			—		—			155
Balance at March 31, 2006	10,697,336		11		48,069			181		(12,780		)	35,481
Net income	—		—		—			—		3,519			3,519
Common stock issued pursuant to stock plans	54,189		—		179			—		—			179
Deferred stock units granted to Board of Directors	—		—		132			—		—			132
Stock-based compensation expense	—		—		326			—		—			326
Common stock repurchased	(193,500	)	—		(1,948		)	—		—			(1,948		)
Income tax benefit from stock option exercises	—		—		154			—		—			154
Balance at September 30, 2006	10,558,025		$	11	$	46,912		$	181	$	(9,261	)	$	37,843

See accompanying Notes to Condensed Consolidated Financial Statements.

5

RENTRAK CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

Note 1.  Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements of Rentrak Corporation have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with the accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The results of operations for the three and six-month periods ended September 30, 2006 are not necessarily indicative of the results to be expected for the entire fiscal year ending March 31, 2007. The Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and footnotes thereto included in our 2006 Annual Report to Shareholders.

The Condensed Consolidated Financial Statements reflect, in the opinion of management, all material adjustments (which include only normal recurring adjustments) necessary to present fairly our financial position, results of operations and cash flows.

Note 2.  Net Income Per Share

Basic net income per share (“EPS”) and diluted EPS are computed using the methods prescribed by Statement of Financial Accounting Standards (“SFAS”) No. 128, “Earnings per Share.” Following is a reconciliation of the shares used for the basic EPS and diluted EPS calculations (in thousands):

	Three Months Ended Sept. 30,		Six Months Ended Sept. 30,
	2006	2005	2006	2005
Basic EPS:
Weighted average number of shares of common stock outstanding	10,553	10,551	10,617	10,550
Diluted EPS:
Effect of dilutive deferred stock units, stock options and warrants	549	510	512	530
	11,102	11,061	11,129	11,080
Options not included in diluted EPS because the exercise price of the options was greater than the average market price of the common shares for the period	25	227	25	217

Note 3.  Business Segments, Significant Suppliers and Major Customers

We operate in two business segments, our Pay-Per-Transaction (“PPT”) and Advanced Media and Information (“AMI”) operating divisions, and, accordingly, we report certain financial information by individual segment under this structure. The PPT Division focuses on managing our business operations that facilitate the delivery of home entertainment content products and related rental and sales information for that content to our Participating Retailers on a revenue sharing basis. The AMI Division concentrates on the management and growth of our Essentials Suite™ of business intelligence services, primarily offered on a recurring subscription basis, which are no longer in the early stages, as well as operating our direct revenue sharing (“DRS”) services.

We did not have any revenues from our Other Division in the first two quarters of fiscal 2007 as Supply Chain Essentialsä, OnDemand Essentialsä and Retail Essentialsä moved from the Other Division to the AMI Division during the first quarter of fiscal 2007. Accordingly, revenue related to these products in the first two quarters of fiscal 2006 was reclassified to the AMI Division for comparison purposes.

Assets are not specifically identified by segment as the information is not used by the chief operating decision maker to measure the segments’ performance.

6

Certain information by segment was as follows (in thousands):

	PPT		AMI		Other(1)			Total
Three Months Ended September 30, 2006
Sales to external customers	$	20,172	$	3,911	$	-		$	24,083
Depreciation and amortization	11		334		71			416
Income (loss) from operations	3,804		1,651		(2,766		)	2,689
Three Months Ended September 30, 2005
Sales to external customers	$	17,442	$	2,722	$	-		$	20,164
Depreciation and amortization	5		413		85			503
Income (loss) from operations	3,125		680		(2,320		)	1,485
Six Months Ended September 30, 2006
Sales to external customers	$	43,675	$	7,309	$	-		$	50,984
Depreciation and amortization	23		652		147			822
Income (loss) from operations	7,703		2,915		(5,570		)	5,048
Six Months Ended September 30, 2005
Sales to external customers	$	35,641	$	5,405	$	-		$	41,046
Depreciation and amortization	20		622		173			815
Income (loss) from operations	5,602		1,637		(4,876		)	2,363

(1)Includes revenue and expenses relating to products and/or services which are still in early stages, as well as corporate expenses and other expenses which are not allocated to a specific segment.

Additional results of operations information by segment was as follows:

	Three Months Ended September 30, (1)
	2006				2005
			% of				% of
(Dollars in thousands)	Dollars		revenues		Dollars		revenues
PPT Division
Revenues	$	20,172	100.0	%	$	17,442	100.0	%
Cost of sales	14,974		74.2		13,037		74.7
Gross margin	$	5,198	25.8	%	$	4,405	25.3	%
AMI Division
Revenues	$	3,911	100.0	%	$	2,722	100.0	%
Cost of sales	587		15.0		481		17.7
Gross margin	$	3,324	85.0	%	$	2,241	82.3	%

	Six Months Ended September 30, (1)
	2006				2005
			% of				% of
(Dollars in thousands)	Dollars		revenues		Dollars		revenues
PPT Division
Revenues	$	43,675	100.0	%	$	35,641	100.0	%
Cost of sales	33,068		75.7		27,557		77.3
Gross margin	$	10,607	24.3	%	$	8,084	22.7	%
AMI Division
Revenues	$	7,309	100.0	%	$	5,405	100.0	%
Cost of sales	1,079		14.8		793		14.7
Gross margin	$	6,230	85.2	%	$	4,612	85.3	%

(1) Percentages may not add due to rounding.

Revenue by service activity was as follows (in thousands):

	Three Months Ended Sept. 30,				Six Months Ended Sept. 30,
	2006		2005		2006		2005
Order processing fees	$	1,700	$	1,391	$	4,233	$	2,966
Transaction fees	14,364		12,544		31,121		25,662
Sell-through fees	3,923		3,262		7,884		6,522
Other	4,096		2,967		7,746		5,896
	$	24,083	$	20,164	$	50,984	$	41,046

7

During the three and six-month periods ended September 30, 2006 and 2005, we had Program Suppliers that supplied product which generated in excess of 10% of our total revenues as follows:

	Three Months Ended Sept. 30,				Six Months Ended Sept. 30,
	2006		2005		2006		2005
Program Supplier 1	20	%	25	%	17	%	26	%
Program Supplier 2	17	%	n/a		17	%	n/a
Program Supplier 3	13	%	13	%	15	%	14	%
Program Supplier 4	12	%	n/a		11	%	n/a
Program Supplier 5	10	%	19	%	12	%	17	%

There were no other Program Suppliers who provided product that accounted for 10% or more of our total revenues for the three and six-month periods ended September 30, 2006 or 2005. Although management does not believe that the relationships with the significant Program Suppliers will be terminated in the near term, a loss of any one of these suppliers could have an adverse effect on our financial condition and results of operations.

There were no customers that accounted for 10% or more of our total revenue in the three and six-month periods ended September 30, 2006 or 2005.

Note 4.  Stock-Based Compensation

Adoption of SFAS No. 123R

Effective April 1, 2006, we adopted SFAS No. 123R, “Share-Based Payment.” We elected to use the modified prospective transition method as provided by SFAS No. 123R and, accordingly, financial statement amounts for the prior periods presented in this Form 10-Q have not been restated to reflect the fair value method of expensing stock-based compensation. Under this method, the provisions of SFAS No. 123R apply to all awards granted or modified after the date of adoption. In addition, the unrecognized expense of awards not yet vested at the date of adoption is recognized in net income in the periods after the date of adoption using the Black-Scholes valuation method over the remainder of the requisite service period. Prior to April 1, 2006, we accounted for stock options using the intrinsic value method as prescribed by Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees.” See also “Critical Accounting Policies and Estimates” in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

We provided disclosures of net income and earnings per share as if the method prescribed by SFAS No. 123, “Accounting for Stock-Based Compensation,” had been applied in measuring compensation expense in prior periods as follows (in thousands, except per share amounts):

	Three Months Ended September 30, 2005			Six Months Ended September 30, 2005
Net income, as reported	$	1,104		$	1,760
Deduct - total stock-based employee compensation expense determined under the fair value based method for all awards, net of related tax effects	(199		)	(397		)
Net income, pro forma	$	905		$	1,363
Net income per share — basic, as reported	$	0.10		$	0.17
Net income per share — basic, pro forma	$	0.09		$	0.13
Net income per share — diluted, as reported	$	0.10		$	0.16
Net income per share — diluted, pro forma	$	0.08		$	0.12

8

Certain information regarding our stock-based compensation was as follows (in thousands, except per share amounts):

	Three Months Ended Sept. 30,				Six Months Ended Sept. 30,
	2006		2005		2006		2005
Weighted average grant-date per share fair value of share options granted	$	-	$	-	$	-	$	7.26
Total intrinsic value of share options exercised	300		82		424		116
Stock-based compensation recognized in results of operations as a component of selling and administrative expense	148		-		326		-
Tax benefit recognized in statement of operations	28		-		52		-
Cash received from options exercised and shares purchased under all share-based arrangements	30		14		179		24
Tax deduction realized related to stock options exercised	108		30		154		43

No stock-based compensation was capitalized as a part of an asset during the three or six months ended September 30, 2006.

To determine the fair value of stock options granted, we used the Black-Scholes option pricing model and the following weighted average assumptions:

	Three and Six Months Ended September 30, 2005
Risk-free interest rate	4.16	%
Expected dividend yield	0.0	%
Expected term	6.39 years
Expected volatility	70.08	%
Discount for post vesting restrictions	0.0	%

There were no options granted in the three or six-month periods ended September 30, 2006.

The risk-free rate used is based on the U.S. Treasury yield over the estimated term of the options granted. Prior to the adoption of SFAS No. 123R, the expected term was estimated based on historical experience. Under SFAS No. 123R, our option pricing model will utilize the simplified method accepted under Staff Accounting Bulletin No. 107 to estimate the expected term. The expected volatility for options granted is calculated based on our historical volatility over the prior seven year period. We have not paid dividends in the past and we do not expect to pay dividends in the future and, therefore, the expected dividend rate is 0%.

Effective June 15, 2006, our Board of Directors (the “Board”), upon recommendation of the Compensation Committee of the Board, approved the grant of 9,000 deferred stock units (“DSUs”) to each of our five non-employee directors in lieu of the annual grants of stock options that had been in place under the 1997 Equity Participation Plan. The DSUs represent the right to receive an equal number of shares of our Common Stock pursuant to the terms and conditions of our 2005 Stock Incentive Plan on a deferred basis in compliance with the terms of Section 409A of the Internal Revenue Code, as amended. The awards of DSUs will vest in full on June 15, 2007, provided that the recipient continues to be a non-employee director on that date, and provided further that the DSUs will fully vest upon termination of the recipient’s service on the Board due to death or disability or a change in control of Rentrak Corporation before that date. The awards of DSUs will be payable following the recipient’s ceasing to be a director.

Compensation expense related to DSUs, which totaled $452,000, was calculated based on the fair value on the date of grant as if the stock was vested. We recorded an expense of $113,000 and $132,000, respectively, during the three and six-month periods ended September 30, 2006, with the remaining $320,000 of related compensation to be recognized over the remaining vesting period for these awards at the rate of approximately $113,000 per quarter through June 15, 2007.

9

We amortize stock-based compensation on a straight-line basis over the vesting period of the individual award, which is the requisite service period. We have not reduced the stock-based compensation for estimated forfeitures as there is no basis for estimating future forfeitures as most unvested options are held by members of senior management and the non-employee Directors.

Shares to be issued under stock-based awards will come from authorized but unissued shares.

The following reconciles what certain operating results would have been without the effects of applying SFAS No. 123R in the three and six-month periods ended September 30, 2006 (in thousands, except per share amounts):

	Three Months Ended September 30, 2006				Six Months Ended September 30, 2006
	As reported		If reported following APB 25		As reported			If reported following APB 25
Income before income taxes	$	3,029	$	3,177	$	5,741		$	6,067
Net income	1,931		2,033		3,519			3,778
Cash flow from operating activities	1,816		1,816		2,641			2,641
Cash flow from financing activities	214		214		(1,171		)	(1,171		)
Basic earnings per share	0.18		0.19		0.33			0.36
Diluted earnings per share	0.17		0.18		0.32			0.34

Stock Incentive Plan

The Rentrak Corporation 2005 Stock Incentive Plan (the “2005 Plan”) replaced the 1997 Non-Officer Employee Stock Option Plan and the 1997 Equity Participation Plan (the “Prior Plans”).

Under the 2005 Plan, we may grant incentive or nonqualified stock options, stock appreciation rights, restricted stock or units with time-based vesting, performance shares with vesting tied to performance goals and other equity-based awards to eligible participants, including our officers, other key employees, our non-employee directors and certain consultants. Up to a total of 1.0 million shares of our common stock may be issued pursuant to awards granted under the 2005 Plan, subject to adjustment for changes in capitalization. In addition, shares covered by outstanding stock options under the Prior Plans that are cancelled, terminate or otherwise expire without being exercised become available for grants of new awards under the 2005 Plan.

Our option plans are administered by the Compensation Committee of our Board, which determines the terms and conditions of options issued under the plans. Generally, options granted under the plans vest over periods of one to four years and expire ten years after the date of grant.

As of September 30, 2006, awards covering 848,500 shares of our common stock remained available for grant under our 2005 Plan and 2,347,866 shares of our common stock were reserved for issuance pursuant to the 2005 Plan and the Prior Plans combined.

Stock option activity for the six-month period ended September 30, 2006 was as follows:

	Options Outstanding		Weighted Average Exercise Price
Outstanding at March 31, 2006	1,574,798		$	6.17
Granted	-		-
Exercised	(74,932	)	5.56
Forfeited	(500	)	3.99
Outstanding at September 30, 2006	1,499,366		6.22

During the six months ended September 30, 2006, 20,743 shares of common stock with a market value of approximately $238,000 were withheld in payment of the exercise price for stock options.

10

Certain information regarding options outstanding as of September 30, 2006 was as follows:

	Options Outstanding		Options Exercisable
Number	1,499,366		1,263,491
Weighted average exercise price	$	6.22	$	5.65
Aggregate intrinsic value	$	9.3 million	$	7.1 million
Weighted average remaining contractual term	4.9 years		4.5 years

Deferred stock unit activity for the six-month period ended September 30, 2006 was as follows:

	Units Outstanding	Weighted Average Grant Date Fair Value
Outstanding at March 31, 2006	-	-
Granted	45,000	$	10.04
Vested	-	-
Forfeited	-	-
Outstanding at September 30, 2006	45,000	10.04

As of September 30, 2006, unrecognized stock-based compensation related to outstanding, but unvested options and DSUs was $1.4 million, which will be recognized over the weighted average remaining vesting period of 3.25 years.

Note 5.  Related Party Transactions

On January 25, 2005, we entered into a consulting agreement with F. Kim Cox, our former President and Secretary, whereby he is assisting us with strategic planning and product development issues.  Pursuant to the agreement, we pay Mr. Cox $25,000 per month from February 2005 through March 2007.  We paid Mr. Cox a total of $75,000 and $150,000, respectively, pursuant to this agreement in the three and six-month periods ended September 30, 2006 and 2005.

Note 6.   Repurchase of Shares

During the first six months of fiscal 2007, we repurchased a total of 193,500 shares of our common stock at an average price of $10.07 per share, which totaled $1.9 million. The stock repurchase plan, approved by our Board of Directors in January 2006, authorized the purchase of up to 1,000,000 shares of our common stock and does not have an expiration date. At September 30, 2006, 806,500 shares remained available for repurchase under this plan.

Note 7.  Renovation of Corporate Headquarter Office and State of Oregon and City of Portland Loans and Grant

In connection with our corporate headquarter office renovations, we will receive cash-based rent incentives of up to $0.9 million from the lessor based on our qualified expenditures. These amounts will be amortized against rental expense over the term of the lease, which begins January 1, 2007. Based on our expenditures to date less reimbursements previously received, we have recorded a landlord receivable of $415,000 as of September 30, 2006. See also “Critical Accounting Policies and Estimates” in Part I, Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

In addition, in June 2006, we received commitments for conditional loans from the State of Oregon and the Portland Development Commission (“PDC”) for funding in the amounts of $200,000 and $690,000, respectively. The loans contain provisions relating to forgiveness if we meet certain requirements. Additionally, we received a commitment for a conditional grant from the PDC for $58,000. These funds are being used to pay for leasehold improvements associated with our corporate headquarters and were provided to us as an incentive to maintain our corporate headquarters in Portland, Oregon rather than relocating to another state. Through September 30, 2006, we received $598,000 from these agencies and have recorded this amount as Notes Payable on our balance sheet. We expect to receive the remaining

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funds associated with these arrangements over the next few months as portions of our renovations are completed.

Note 8. Disposal of Assets

During the second quarter of fiscal 2007, we retired and/or disposed of fixed assets which were being replaced by new assets associated with our renovations (see Note 7). The gross value of the assets was $1.3 million; however, since most of these assets were fully depreciated, the amount of the loss associated with the disposals was approximately $33,000 and was included as a component of selling and administrative expense.

Note 9.  New Accounting Pronouncements

SFAS No. 158

In September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans,” which requires employers to recognize on their balance sheets the funded status of pension and other postretirement benefit plans, effective December 31, 2006 for calendar year-end companies. In addition SFAS No. 158 requires fiscal year-end measurement of plan assets and benefit obligations, eliminating the use of earlier measurement dates currently permissible, effective for fiscal years ending after December 15, 2008. We do not have any defined benefit pension or other postretirement plans and, accordingly, the adoption of the provisions of SFAS No. 158 will not have any effect on our financial position or results of operations.

SFAS No. 157

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair-value measurements. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007.  While we are still analyzing the effects of applying SFAS No. 157, we believe that the adoption of SFAS No. 157 will not have a material effect on our financial position or results of operations.

Staff Accounting Bulletin No. 108

In September 2006, the Securities and Exchange Commission issued Staff Accounting Bulletin (“SAB”) No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements,” which addresses how the effects of prior-year uncorrected misstatements should be considered when quantifying misstatements in current-year financial statements. SAB No. 108 requires companies to quantify misstatements using both the balance sheet and income statement approaches and to evaluate whether either approach results in quantifying an error that is material in light of relevant quantitative and qualitative factors. SAB No. 108 is effective for annual financial statements covering the first fiscal year ending after November 15, 2006. We believe that the implementation of SAB No. 108 will not have any effect on our financial position or results of operations.

FASB Staff Position No. AUG AIR-1

In September 2006, the FASB issued Staff Position No. AUG AIR-1, “Accounting for Planned Major Maintenance Activities,” which prohibits accruing for the future cost of periodic major overhauls and planned maintenance of plant and equipment in annual and interim periods. This Staff Position is effective for fiscal years beginning after December 15, 2006 and must be retrospectively applied. We do not accrue for such costs in annual or interim periods and, accordingly, the adoption of this Staff Position will not have any effect on our financial position or results of operations.

FASB Interpretation No. 48

In July 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes,” which defines the threshold for recognizing the benefits of tax return positions in the financial statements as “more-likely-than-not” to be sustained by the taxing authority. Interpretation No. 48 applies to all tax positions accounted for under SFAS No. 109, “Accounting for Income Taxes.” Interpretation No. 48 is effective for fiscal years beginning after December 15, 2006. Upon adoption, we will adjust our financial

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statements to reflect only those tax positions that are more-likely-than-not to be sustained as of the adoption date. Any adjustment will be recorded directly to our beginning retained earnings balance in the period of adoption and reported as a change in accounting principle. We are currently analyzing the effects of adopting Interpretation No. 48.

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

Certain information included in this Quarterly Report on Form 10-Q (including Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding revenue growth, gross profit margin and liquidity) constitute forward looking statements that involve a number of risks and uncertainties. Forward looking statements may be identified by the use of forward looking words such as “may,” “will,” “expects,” “intends,” “anticipates,” “estimates” or “continues” or the negative thereof or variations thereon or comparable terminology. The following factors are among the factors that could cause actual results to differ materially from the forward looking statements: our ability to retain and grow our customer base of retailers participating in the Pay-Per-Transaction system (the “PPT System”) (“Participating Retailers”) and customers for our business intelligence software and services; the financial stability of the Participating Retailers and their performance of their obligations under our PPT System; business conditions and growth in the video industry and general economic conditions, both domestic and international; customer demand for movies in various media formats subject to company guarantees; competitive factors, including increased competition, expansion of revenue sharing programs other than the PPT System by motion picture studios or other licensees or owners of the rights to certain video programming or video game publishers (“Program Suppliers”) and new technology; the continued availability of digital videodiscs (“DVDs”), video games and videocassettes (“Cassettes”) (collectively “Units”) leased/licensed to home video specialty stores and other retailers from Program Suppliers; the loss of significant Program Suppliers; our ability to successfully develop and market new services, including our business intelligence services, to create new revenue streams; and non-renewal of our line of credit. This Quarterly Report on Form 10-Q further describes some of these factors. In addition, some of the important factors that could cause actual results to differ from our expectations are discussed in Item 1A to our fiscal 2006 Form 10-K, which was filed with the Securities and Exchange Commission on June 12, 2006. These risk factors have not significantly changed since the filing of the fiscal 2006 Form 10-K.

Business Trends

Our corporate structure includes separate Pay-Per-Transaction (“PPT”) and Advanced Media and Information (“AMI”) operating divisions and, accordingly, we report certain financial information by individual segment under this structure.

Our PPT Division focuses on managing our business operations that facilitate the delivery of home entertainment content products (DVDs, cassettes, video games, etc.) and related rental and sales information for the content to home video specialty stores and other retailers, on a revenue sharing basis.  We lease product from various suppliers, typically motion picture studios. Under our PPT System, retailers sublease that product from us and rent it to consumers. Retailers then share a portion of each retail rental transaction with us and the studio. Since we collect, process and analyze rental and sales information at the title level, we report that information to both the studio and the respective retailers.

Our AMI Division concentrates on the management and growth of our Essentials Suite™ of business intelligence services which are no longer in the development stage, as well as operating our direct revenue sharing (“DRS”) services. Our Essentials Suite™ software and services, offered on a recurring subscription basis, provide unique data collection, management, analysis and reporting functions, resulting in business intelligence information valuable to our clients. Our DRS services collect, track, audit and report the results to our suppliers under established agreements on a fee for service basis.  During the first quarter of fiscal 2007, Supply Chain Essentialsä, OnDemand Essentialsä and Retail Essentialsä moved from the Other Division to the AMI Division as these lines were considered to be no longer in the development stage.

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The PPT Division

The financial results from the PPT Division continue to be affected by the changing dynamics in the home video and game rental market. This market is highly competitive and influenced greatly by consumer spending patterns and behaviors. The end consumer has a wide variety of choices from which to select their entertainment content. Some examples include renting Units of product from our Participating Retailers, ordering product direct via online subscriptions and/or online distributors, subscribing to at-home movie channels, purchasing and owning the unit directly or selecting an at-home “pay-per-view” option. Our PPT system focuses on the traditional “brick and mortar” retailer. We believe that our system successfully addresses the many choices available to consumers and affords our Participating Retailers the opportunity to stock their stores with a wider selection of titles and a greater supply of popular box office releases.  Most of our arrangements are structured so that most Participating Retailers pay minimal upfront fees and lower per transaction fees in exchange for ordering all Units offered by a particular Program Supplier (referred to as “output” programs). Since these programs usually result in more overall Units rented, our Retailers’ revenue and the corresponding share with the studios have increased. These programs are, in part, an economic response to the changing dynamics of the home video rental market.  We expect the growth of these output programs to continue, and believe that they will be financially beneficial for the Participating Retailers, Program Suppliers and us.

Our base of Participating Retailers continues to be strong and we are implementing strategies to obtain new Participating Retailers and Program Suppliers in an effort to further stabilize and grow our overall PPT revenue and earnings streams.

We continue to be in good standing with all of our Program Suppliers and we make on-going efforts to enhance those business relationships through improvement of current services offered and the development of new service offerings. We are also continually seeking to develop business relationships with new Program Suppliers. In September 2003, we entered into a combined DVD/VHS revenue sharing program with one of the world’s largest studios that has resulted in their becoming one of our largest Program Suppliers representing 17% and 26% of our total revenues, respectively, in the six-month periods ended September 30, 2006 and 2005. Also, in November 2005, based on our successful involvement with another major studio in Canada, we entered into a revenue sharing agreement which extends product offerings to Participating Retailers in the United States. This agreement was effective for titles released beginning in January 2006. This will allow our U.S. Participating Retailers access to the large volume of high quality entertainment that this major studio has been delivering for years. Additional Program Suppliers represented 17%, 15%, 12% and 11% of our total revenues in the six-month period ended September 30, 2006. As a result, our product mix was evenly spread among five major Program Suppliers (see Note 3 of Notes to Condensed Consolidated Financial Statements). However, as is typical of our agreements with Program Suppliers, our relationships with these Program Suppliers may be terminated without cause upon thirty days’ written notice by either party.

AMI and Other Divisions

We are also allocating significant resources towards our business intelligence service offerings, both those services that are currently operational as well as those that are in various stages of development.  Our suite of business intelligence services has been well received in the various targeted markets to date, as our offerings fit well with the needs identified by those market participants. Our Essentialsä business intelligence service offerings which are fully operational and no longer in significant stages of development, realized a revenue increase of 33% during the six-month period ended September 30, 2006 compared to the same period of the prior fiscal year. We intend to continue to invest in our existing, as well as new, business intelligence services in the near-term as we expand the markets we serve and our service lines, which likely will lower our earnings. Longer-term, we believe these services will provide significant future revenue and earnings streams and contribute to our overall success.

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Sources of Revenue

Revenue by segment includes the following:

PPT Division

·order processing fees generated when Units are ordered by and distributed to retailers;

·transaction fees generated when retailers rent Units to consumers; additionally, certain arrangements include guaranteed minimum revenues from our customers. We recognize the guaranteed minimum revenue on the street (release) date in accordance with Statement of Position 00-2, “Accounting by Producers or Distributors of Films,” (“SOP 00-2”) provided all other revenue recognition criteria are met;

·sell-through fees generated when retailers sell previously-viewed rental Units to consumers; and

·buy-out fees generated when retailers purchase Units at the end of the lease term.

AMI Division

·direct revenue sharing fees from data tracking and reporting services provided to Program Suppliers (“DRS”);

·revenues from Box Office Essentialsä;

·revenues from Home Video Essentialsä;

·revenues from Supply Chain Essentialsä;

·revenues from OnDemand Essentialsä; and

·revenues from Retail Essentialsä.

Other Division

·revenue relating to other products and/or services which are still in the development stage, including AdTrakerä, which will capture census-level data regarding viewing patterns of on-demand advertising for reporting to marketers and advertising agencies.

Results of Operations

	Three Months Ended September 30, (1)
	2006					2005
(Dollars in thousands)	Dollars			% of revenues		Dollars			% of revenues
Revenues:
PPT	$	20,172		83.8	%	$	17,442		86.5	%
AMI	3,911			16.2		2,722			13.5
	24,083			100.0		20,164			100.0
Operating expenses:
Cost of sales	15,561			64.6		13,518			67.0
Selling and administrative	5,833			24.2		5,161			25.6
	21,394			88.8		18,679			92.6
Income from operations	2,689			11.2		1,485			7.4
Other income (expense):
Interest income	341			1.4		254			1.3
Interest expense	(1		)	—		(1		)	—
	340			1.4		253			1.3
Income before income tax provision	3,029			12.6		1,738			8.6
Income tax provision	1,098			4.6		634			3.1
Net income	$	1,931		8.0	%	$	1,104		5.5	%

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	Six Months Ended September 30, (1)
	2006					2005
(Dollars in thousands)	Dollars			% of revenues		Dollars			% of revenues
Revenues:
PPT	$	43,675		85.7	%	$	35,641		86.8	%
AMI	7,309			14.3		5,405			13.2
	50,984			100.0		41,046			100.0
Operating expenses:
Cost of sales	34,147			67.0		28,350			69.1
Selling and administrative	11,789			23.1		10,333			25.2
	45,936			90.1		38,683			94.2
Income from operations	5,048			9.9		2,363			5.8
Other income (expense):
Interest income	695			1.4		410			1.0
Interest expense	(2		)	—		(2		)	—
	693			1.4		408			1.0
Income before income tax provision	5,741			11.3		2,771			6.8
Income tax provision	2,222			4.4		1,011			2.5
Net income	$	3,519		6.9	%	$	1,760		4.3	%

(1)Percentages may not add due to rounding.

Certain information by segment was as follows (in thousands):

	PPT		AMI		Other(1)			Total
Three Months Ended September 30, 2006
Sales to external customers	$	20,172	$	3,911	$	—		$	24,083
Depreciation and amortization	11		334		71			416
Income (loss) from operations	3,804		1,651		(2,766		)	2,689
Three Months Ended September 30, 2005
Sales to external customers	$	17,442	$	2,722	$	—		$	20,164
Depreciation and amortization	5		413		85			503
Income (loss) from operations	3,125		680		(2,320		)	1,485
Six Months Ended September 30, 2006
Sales to external customers	$	43,675	$	7,309	$	—		$	50,984
Depreciation and amortization	23		652		147			822
Income (loss) from operations	7,703		2,915		(5,570		)	5,048
Six Months Ended September 30, 2005
Sales to external customers	$	35,641	$	5,405	$	—		$	41,046
Depreciation and amortization	20		622		173			815
Income (loss) from operations	5,602		1,637		(4,876		)	2,363

(1)Includes revenue and expenses relating to products and/or services which are still in early stages, as well as corporate expenses and other expenses which are not allocated to a specific segment.

Additional results of operations information by segment was as follows:

	Three Months Ended September 30,(1)
	2006				2005
(Dollars in thousands)	Dollars		% of revenues		Dollars		% of revenues
PPT Division
Revenues	$	20,172	100.0	%	$	17,442	100.0	%
Cost of sales	14,974		74.2		13,037		74.7
Gross margin	$	5,198	25.8	%	$	4,405	25.3	%
AMI Division
Revenues	$	3,911	100.0	%	$	2,722	100.0	%
Cost of sales	587		15.0		481		17.7
Gross margin	$	3,324	85.0	%	$	2,241	82.3	%

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	Six Months Ended September 30, (1)
	2006				2005
(Dollars in thousands)	Dollars		% of revenues		Dollars		% of revenues
PPT Division
Revenues	$	43,675	100.0	%	$	35,641	100.0	%
Cost of sales	33,068		75.7		27,557		77.3
Gross margin	$	10,607	24.3	%	$	8,084	22.7	%
AMI Division
Revenues	$	7,309	100.0	%	$	5,405	100.0	%
Cost of sales	1,079		14.8		793		14.7
Gross margin	$	6,230	85.2	%	$	4,612	85.3	%

(1)Percentages may not add due to rounding.

Revenue

Revenue increased $3.9 million, or 19.4%, to $24.1 million in the three-month period ended September 30, 2006 (the “second quarter of fiscal 2007”) compared to $20.2 million in the three-month period ended September 30, 2005 (the “second quarter of fiscal 2006”). Revenue increased $10.0 million, or 24.2%, to $51.0 million in the six-month period ended September 30, 2006 compared to $41.0 million in the six-month period ended September 30, 2005. We realized increases in revenue across all of our product lines in both the three and six-month periods ended September 30, 2006 compared to the same periods of the prior fiscal year.

PPT Division

PPT Division revenues increased $2.7 million, or 15.7%, in the three-month period ended September 30, 2006 compared to the same period of the prior fiscal year and increased $8.0 million, or 22.5%, in the six-month period ended September 30, 2006 compared to the same period of the prior fiscal year as a result of improvements in all of our major service lines as detailed below (in thousands):

	Three Months Ended Sept. 30,				Six Months Ended Sept. 30,
	2006		2005		2006		2005
Order processing fees	$	1,700	$	1,391	$	4,233	$	2,966
Transaction fees	14,364		12,544		31,121		25,662
Sell-through fees	3,923		3,262		7,884		6,522
Other	185		245		437		491
	$	20,172	$	17,442	$	43,675	$	35,641

Order processing fees increased $0.3 million, or 22.2%, and $1.3 million, or 42.7%, respectively, in the three and six-month periods ended September 30, 2006 compared to the same periods of the prior fiscal year due partially to two new output programs with major suppliers, which went into effect in January and March 2006, as well as increased volumes and quality of content from some of our existing Program Suppliers. These stronger product offerings resulted in higher order processing fees per Unit in the three and six-month periods ended September 30, 2006 compared with the same periods of the prior fiscal year. These fees increased to $1.22 per Unit and $1.27 per Unit, respectively, in the three and six-month periods ended September 30, 2006 compared to $1.02 per Unit in the comparable periods of the prior fiscal year, resulting in increases of $0.3 million and $0.8 million, respectively, in revenues. In addition, the number of Units shipped increased by 15% to 3.3 million Units during the six-month period ended September 30, 2006 compared to 2.9 million Units in the comparable period of the prior fiscal year, which contributed to a $0.4 million increase in revenue.

Transaction fees increased $1.8 million, or 14.5%, and $5.5 million, or 21.3%, respectively, in the three and six-month periods ended September 30, 2006 compared to the same periods of the prior fiscal year primarily due to increased transactions related to output programs that began during the last quarter of fiscal 2006 as discussed above. Rental transactions at our Participating Retailers increased 30% and 31%, respectively, in the three and six-month periods ended September 30, 2006 compared to the same periods of the prior fiscal year, while the rate per transaction remained relatively flat in the current fiscal year periods compared with the prior fiscal year periods. A portion of the rental transactions were from

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arrangements which included minimum guarantees. Since some of the Units were released in the first quarter of fiscal 2007, the corresponding guaranteed revenue was previously recognized in that quarter. Thus, our overall transaction fees revenue increase of 14.5% was not as high as our increased rental transactions of 30% for the second quarter of fiscal 2007.

Sell-through fees increased $0.7 million, or 20.3%, and $1.4 million, or 20.9%, respectively, in the three and six-month periods ended September 30, 2006 compared to the same periods of the prior fiscal year primarily due to higher volumes of product available for sale to our Participating Retailers.

AMI Division

Revenues from our AMI division increased $1.2 million, or 43.7%, and $1.9 million, or 35.2%, respectively, in the three and six-month periods ended September 30, 2006 compared to the same periods of the prior fiscal year.

Our Essentialsä business intelligence service offerings, which include those services that management considers fully operational and no longer in significant stages of development, saw revenue increases of $0.5 million, or 32%, and $0.9 million, or 33%, in the three and six-month periods ended September 30, 2006, respectively, compared to the same periods of the prior fiscal year. Revenues related to our Essentialsä business intelligence service offerings have increased primarily due to our continued investment in, and marketing of, these offerings.

DRS revenues increased $0.7 million, or 57.9%, and $1.0 million, or 37.7%, in the three and six-month periods ended September 30, 2006, respectively, compared to the same periods of the prior fiscal year due to increases in the number of transactions processed by us and the addition of new customers.

Other Division

We did not have any revenues from our Other Division in the three and six-month periods ended September 30, 2006 as Supply Chain Essentialsä, OnDemand Essentialsä and Retail Essentialsä moved from the Other Division to the AMI Division during the first quarter of fiscal 2007. Accordingly, revenue related to these products in the same periods of fiscal 2006 was reclassified to the AMI Division for comparison purposes.

Cost of Sales

Cost of sales consists of order processing costs, transaction costs, sell-through costs, handling and freight costs and costs associated with certain Essentialsä business intelligence service offerings. These expenditures represent the direct costs to produce revenues. Order processing costs, transaction costs and sell through costs represent the amounts due to the Program Suppliers that hold the distribution rights to the Units. Freight costs represent the cost to pick, pack and ship orders of Units to the Participating Retailers. A portion of the Essentialsä business intelligence service offerings costs represent costs associated with the operation of a call center for our Box Office Essentialsä services, as well as costs associated with amortizing capitalized internally developed software used to provide the corresponding services and direct costs incurred to obtain, cleanse and process data and maintain our systems.

Cost of sales increased $2.0 million, or 15.1%, and $5.8 million, or 20.4%, respectively, in the three and six-month periods ended September 30, 2006 compared to the same periods of the prior fiscal year.  Cost of sales as a percentage of revenue was 64.6% and 67.0%, respectively, in the three and six-month periods ended September 30, 2006 compared to 67.0% and 69.1%, respectively, in the same periods of the prior fiscal year.

The increases in cost of sales were primarily due to the increases in revenues discussed above. The decreases in cost of sales as a percentage of revenue were primarily due to higher PPT revenue discussed above and an increase in AMI revenue as a percentage of total revenue. Revenue from our AMI Division generates higher gross margins than revenue from our PPT Division. In addition, we had a higher number of transactions which did not include guarantees during the three and six-month periods ended September 30, 2006 than in the corresponding periods of the prior fiscal year. In the first two quarters of fiscal 2006, we experienced more volume from agreements which included minimum rental guarantees. For these

18

agreements, we recognized the revenues and corresponding costs on the street (release) date in accordance with SOP 00-2, which lowered margins in the first two quarters of fiscal 2006.

Selling and Administrative

Selling and administrative expenses consist primarily of compensation and benefits, development, marketing and advertising costs, legal and professional fees, communications costs, depreciation and amortization of tangible fixed assets and software, real and personal property leases, stock-based compensation and other general corporate expenses.

Selling and administrative expenses increased $0.6 million, or 13.0%, to $5.8 million in the second quarter of fiscal 2007 compared to $5.2 million in the second quarter of fiscal 2006 and increased $1.5 million, or 14.1%, to $11.8 million in the six-month period ended September 30, 2006 compared to $10.3 million in the same period of the prior fiscal year.

The increases in selling and administrative expenses in the three and six-month periods ended September 30, 2006 compared to the same periods of the prior fiscal year were primarily due to increases in compensation and related expenses due to expansion of our existing and new lines of business. In addition, the three and six-month periods ended September 30, 2006 included $148,000 and $326,000, respectively, of stock-based compensation expense related to the implementation of SFAS No. 123R compared to none in the comparable periods of the prior fiscal year. See also Note 4 of Notes to the Condensed Consolidated Financial Statements.

As a percentage of revenues, selling and administrative expenses decreased to 24.2% and 23.1%, respectively, in the three and six-month periods ended September 30, 2006 compared to 25.6% and 25.2%, respectively, for the comparable periods of the prior fiscal year, primarily due to increased revenues over which to spread fixed costs.

Interest Income

Interest income was $341,000 and $695,000, respectively, for the three and six-month periods ended September 30, 2006 compared to $254,000 and $410,000, respectively, for the same periods of the prior fiscal year. The increases in interest income primarily related to higher interest rates and higher average cash and investment balances in the first two quarters of fiscal 2007 compared to the first two quarters of fiscal 2006. The higher interest rates were due to both higher market rates and the investment of our cash in higher-yield investments. Our average combined cash and investment balance was $29.6 million and $22.9 million for the six-month periods ended September 30, 2006 and 2005, respectively.

Income Taxes

Our effective tax rate was 38.7% and 36.5% in the six-month periods ended September 30, 2006 and 2005, respectively. Our effective tax rate differs from the federal statutory tax rate primarily due to state income taxes. The 36.5% effective rate in the six-month period ended September 30, 2005 benefited from the utilization of net operating loss carryforwards and capital loss carryforwards, most of which were fully utilized by March 31, 2006.

Liquidity and Capital Resources

Our sources of liquidity include our cash, cash equivalents and marketable securities, cash expected to be generated from future operations and investment income and our $15.0 million line of credit. Based on our current financial projections and projected cash needs, we believe that our available sources of liquidity will be sufficient to fund our current operations, the continued current development of our business intelligence services and other cash requirements through at least September 30, 2007.

Cash and cash equivalents decreased $8.0 million to $7.7 million at September 30, 2006 compared to $15.7 million at March 31, 2006. This decrease resulted primarily from the use of $7.3 million for the purchase of marketable securities, $2.3 million for the purchase of property and equipment and $1.9 million for the repurchase of our common stock, partially offset by $2.6 million provided by operations and $0.6 million

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provided by a note payable. Our current ratio was 3.5:1.0 at September 30, 2006 and 2.6:1.0 at March 31, 2006.

Accounts receivable, net of allowances, decreased $3.6 million to $14.7 million at September 30, 2006 compared to $18.3 million at March 31, 2006, due primarily to lower revenues in the last month of the second quarter of fiscal 2007 compared to the last month of fiscal 2006.

Landlord receivable at September 30, 2006 represents a $0.4 million receivable related to amounts due to us from the lessor of our corporate headquarters for our qualified renovation expenditures. See also Note 7 of Notes to Condensed Consolidated Financial Statements.

During the first two quarters of fiscal 2007, we spent $2.3 million on property and equipment, including $0.5 million for the capitalization of internally developed software for our business intelligence service offerings. The remaining expenditures were primarily for new accounting software and costs associated with our corporate headquarter office renovations. We anticipate spending a total of approximately $3.6 million on property and equipment in fiscal 2007, including approximately $1.6 million for the capitalization of internally developed software, primarily for our business intelligence service offerings. Other capital expenditures in fiscal 2007 will be primarily for new computer equipment, accounting software and leasehold improvements associated with our corporate headquarter office renovation. We are expecting to receive reimbursements from our landlord, the state of Oregon and the Portland Development Commission to offset these expenditures. See also Note 7 of Notes to Condensed Consolidated Financial Statements.

Accounts payable decreased $5.1 million to $10.4 million at September 30, 2006 compared to $15.5 million at March 31, 2006 primarily due to the timing of Program Supplier and other vendor payments.

Deferred rent, current and long-term, of $0.8 million at September 30, 2006 represents amounts paid for qualified renovations on our corporate headquarters. The deferred rent will be amortized against rent expense over the term of the related lease. See also Note 7 of Notes to Condensed Consolidated Financial Statements and Critical Accounting Policies and Estimates.

Accrued compensation decreased $0.5 million to $0.9 million at September 30, 2006 compared to $1.4 million at March 31, 2006 primarily due to payment during the first quarter of fiscal 2007 for bonuses that were accrued as of March 31, 2006.

Notes payable of $0.6 million at September 30, 2006 represents loans from the Portland Development Commission and the State of Oregon related to our corporate headquarters renovations. The loan from the Portland Development Commission of $0.4 million does not bear interest until it becomes due and contains provisions relating to forgiveness if we meet certain requirements. If the loan is not forgiven, it will accrue interest at the rate of 8.5% per annum beginning on the date that it becomes due. However, if the loan is forgiven, no interest will accrue. The loan from the State of Oregon of $0.2 million bears interest at the rate of 5% per annum and contains provisions relating to forgiveness if we meet certain requirements. See also Note 7 of Notes to Condensed Consolidated Financial Statements.

In January 2006, our board of directors adopted a share repurchase program authorizing the purchase of up to 1,000,000 shares of our common stock. Through September 30, 2006, 193,500 shares had been repurchased under this plan at an average price of $10.07 per share and 806,500 shares remained available for purchase. This plan does not have an expiration date.

We currently have a secured revolving line of credit for $15.0 million, with a maturity of December 1, 2006.  Interest on the line of credit is at our choice of either the bank’s prime interest rate minus 0.5 percent or LIBOR plus 2 percent. The credit line is secured by substantially all of our assets. The line of credit includes certain financial covenants requiring: (1) a consolidated pre-tax income to be achieved each fiscal quarter of a minimum of $1.00, and consolidated after-tax income not less than $1.00 on an annual basis, determined at fiscal year end; (2) a minimum current ratio of 1.5:1.0, measured quarterly; and (3) a maximum debt-to-tangible net worth ratio of 1.5:1.0, measured quarterly.  Based upon the financial results reported as of, and for the quarter ended September 30, 2006, we determined that we were in compliance with the financial

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covenants at September 30, 2006. At September 30, 2006, we had no outstanding borrowings under this agreement.

Critical Accounting Policies and Estimates

Except for the addition of the critical accounting policies for landlord incentives and stock-based compensation described below, we reaffirm the critical accounting policies and estimates as reported in our fiscal 2006 Form 10-K, which was filed with the Securities and Exchange Commission on June 12, 2006.

Landlord Incentives

We maintain our headquarters in Portland, Oregon where we lease 48,800 square feet of office space.  On December 2, 2005, we renewed our current lease. The new lease term begins on January 1, 2007 and expires on December 31, 2016. During fiscal 2007, we are in the process of renovating our headquarter offices and will expand our occupancy to approximately 55,500 square feet.  Our new lease contains provisions relating to an allowance from our landlord associated with the costs of our improvements. These landlord incentives are recorded as deferred rent and will be amortized as reductions to lease expense over the lease term. The leasehold improvements are recorded as assets and are included in Property and Equipment on the consolidated balance sheet. Once the renovations are complete, the leasehold improvements will be depreciated over their economic lives, which are estimated to be 10 years.

Stock-Based Compensation

On April 1, 2006, we adopted SFAS No. 123R which requires the measurement and recognition of compensation expense for all share-based payment awards granted to our employees and directors, including employee stock options and deferred stock units based on the estimated fair value of the award on the grant date.  Upon the adoption of SFAS No. 123R, we maintained our method of valuation for stock option awards using the Black-Scholes valuation model, which we had used historically for the purpose of providing pro forma financial disclosures in accordance with SFAS No. 123.

The use of the Black-Scholes valuation model to estimate the fair value of stock option awards requires us to make judgments on assumptions regarding the risk-free interest rate, expected dividend yield, expected term and expected volatility over the expected term of the award. The assumptions used in calculating the fair value of share-based payment awards represent management’s best estimates, but these estimates involve inherent uncertainties and the application of expense could be materially different in the future.

Compensation expense is only recognized on awards that ultimately vest. However, we have not reduced the stock-based compensation for estimated forfeitures as there is no basis for estimating future forfeitures as most unvested options are held by members of senior management and the Board of Directors.  We update for forfeitures as they occur and recognize any changes to accumulated compensation expense in the period of change. If actual forfeitures are significant, our results of operations could be materially impacted.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

There have been no material changes in our reported market risks since the filing of our fiscal 2006 Form 10-K, which was filed with the Securities and Exchange Commission on June 12, 2006.

ITEM 4.    CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management has evaluated, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (Exchange Act). Based on that evaluation our Chief Executive Officer and our Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed in our

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Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Controls

There has been no change in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1A.  RISK FACTORS

Our Annual Report on Form 10-K for the fiscal year ended March 31, 2006 includes a detailed discussion of our risk factors. There have been no material changes from the risk factors previously disclosed in our Annual Report on Form 10-K. Accordingly, the information in this Form 10-Q should be read in conjunction with the risk factors and information disclosed in our fiscal 2006 Form 10-K, which was filed with the Securities and Exchange Commission on June 12, 2006.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

We repurchased the following shares of our common stock in open market transactions during the second quarter of fiscal 2007 pursuant to our previously-announced repurchase program:

	Total number of shares purchased	Average price paid per share		Total number of  shares purchased as part of publicly announced plan	Maximum number of shares that may yet be purchased under the plan
July 1 to July 31	40,500	$	10.22	40,500	806,500
August 1 to August 30	—	—		—	806,500
September 1 to September 30	—	—		—	806,500
Total	40,500	$	10.22	40,500	806,500

The stock repurchase plan, which was approved by our Board of Directors in January 2006 for a total of 1.0 million shares, does not have an expiration date.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Our annual meeting of shareholders was held on August 17, 2006, at which time the shareholders elected six nominees for director to our Board of Directors.

The six directors elected, along with the voting results, were as follows:

Name	No. of Shares Voting For	No. of Shares Withheld Voting
Judith G. Allen	9,102,813	419,775
Cecil D. Andrus	8,903,820	618,768
George H. Kuper	8,672,397	850,191
Paul A. Rosenbaum	9,046,926	475,662
Ralph R. Shaw	9,113,913	408,675
Stanford C. “Bud” Stoddard	8,822,196	700,392

ITEM 6.  EXHIBITS

The following exhibits are filed herewith and this list is intended to constitute the exhibit index:

10.1	Form of Award Agreement for Non-Employee Director Deferred Stock Units.
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a).
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a).
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.

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SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 9, 2006	RENTRAK CORPORATION
	By:	/s/ Mark L. Thoenes
		Mark L. Thoenes
		Executive Vice President and Chief Financial Officer

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EX-10.1

EXHIBIT 10.1

AWARD AGREEMENT

for

NON-EMPLOYEE DIRECTOR DEFERRED STOCK UNITS

THIS AWARD AGREEMENT, effective as of _________, 20__ (the “Grant Date”), is made by and between RENTRAK CORPORATION, an Oregon corporation (“Corporation”), and _________________, a Non-Employee Director of Corporation (“Participant”).

RECITALS

A.            Corporation has adopted the 2005 Stock Incentive Plan of Rentrak Corporation (the “Plan”).

B.            Corporation’s Board of Directors has determined that it would be to the advantage and best interest of Corporation and its shareholders to grant the Award of Deferred Stock Units (the “DSU Award”) provided for in this Agreement to Participant as an inducement to remain on the Board of Directors of Corporation and as an incentive for increased efforts during such service as a director.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants in this Agreement and other good and valuable consideration, receipt of which is acknowledged, the parties agree as follows:

1.             GRANT OF DSU AWARD

1.1           Grant of Deferred Stock Units.  In consideration of Participant’s agreement to continue as a director of Corporation and for other good and valuable consideration, effective as of the Grant Date Corporation irrevocably grants to Participant 9,000 Deferred Stock Units upon the terms and conditions set forth in this Agreement and the Plan.

1.2           Nature of Units.  The Deferred Stock Units subject to this DSU Award are governed by the provisions of Section 9.1(b) of the Plan applicable to Restricted Stock Units.

1.3           Restriction Period.  During the period (the “Restriction Period”) commencing on the Grant Date and ending on the first anniversary of the Grant Date (except as provided in Section 1.4.2), Participant may not sell, assign, transfer, pledge, encumber, or otherwise dispose of this DSU Award or the Shares to be received under or governed by this DSU Award and Participant will not become Vested in the Deferred Stock Units unless Participant continues to serve as a Non-Employee Director of Corporation throughout the Restriction Period.

1.4           Vesting of DSU Award.

1.4.1        General.  The DSU Award is initially not Vested and will become fully Vested and nonforfeitable as of the expiration of the Restriction Period.  The DSU Award will be settled as of the Settlement Date pursuant to Section 2 rather than on the date the DSU Award becomes Vested.

1.4.2        Acceleration of Vesting.  Notwithstanding any other provision of this Agreement, the DSU Award will become fully Vested and nonforfeitable upon:

(a)           the death of Participant;

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(b)           the termination of Participant’s membership on Corporation’s Board by reason of Participant’s Disability; or

(c)           the termination of Participant’s membership on Corporation’s Board by reason of or in connection with a Change in Control of Corporation.

1.5           Forfeiture of DSU Award.  In the event that Participant ceases to be a Non-Employee Director of Corporation prior to the expiration of the Restriction Period for any reason other than death, Disability, or a Change in Control of Corporation, the entire DSU Award and all the Deferred Stock Units will be forfeited.

2.             SETTLEMENT OF DEFERRED STOCK UNITS

2.1           Settlement Date.  In the event the DSU Award becomes Vested pursuant to Section 1.4.1, the date of settlement of the DSU Award  (the “Settlement Date”) will be the first business day that is at least 30 days after the date that Participant ceases to be a Non-Employee Director of Corporation.

2.2           Accelerated Settlement Date.  In the event the Vesting of the DSU Award is accelerated pursuant to Section 1.4.2 due to the death or Disability of Participant, the Settlement Date will be the first business day that is at least 30 days after the date of death or the date Participant ceases to be a Non-Employee Director of Corporation by reason of Disability.  In the event the Vesting of the DSU Award is accelerated pursuant to Section 1.4.2 due to the termination of Participant’s membership on Corporation’s Board by reason of or in connection with a Change in Control of Corporation, the Settlement Date will be the date on which such termination occurs.

2.3           Form of Settlement.  If the DSU Award becomes Vested pursuant to Section 1.4, then on the Settlement Date, Corporation will deliver to Participant an unrestricted certificate for a number of Shares equal to the number of Deferred Stock Units subject to the DSU Award.

2.4           Withholding Taxes.  As of the Grant Date, no withholding taxes are due in connection with the grant, Vesting or settlement of the DSU Award.  In the event that as of the Vesting date or the Settlement Date, Corporation is (due to changes in applicable law) obligated to withhold any taxes in connection with the Vesting and/or the settlement of the DSU Award, Participant will be responsible for payment of all federal, state, and local withholding taxes and Participant’s portion of any applicable payroll taxes imposed in connection with the Vesting and/or the settlement of the DSU Award or the issuance of Shares (collectively, the “Applicable Taxes”).  Corporation’s obligation to issue Shares in settlement of the DSU Award is expressly conditioned on Participant’s making arrangements satisfactory to Corporation, in its sole and absolute discretion, for the payment of all Applicable Taxes.

3.             OTHER PROVISIONS

3.1           DSU Award Not Transferable.  Neither the DSU Award nor the Deferred Stock Units nor any interest or right in the Award or the Units or part of the Award or the Units may be sold, pledged, assigned, or transferred in any manner other than by will or the laws of descent and distribution, unless and until the DSU Award has been settled as provided in this Agreement.  Neither the DSU Award nor any interest or right in the Deferred Stock Units or part of the Award or the Units will be liable for the debts, obligations, contracts or engagements of Participant or his or her successors in interest or will be subject to disposition by transfer, alienation, anticipation, pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any attempted disposition will be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence.

3.2           Rights as Shareholder.  Prior to the issuance of a certificate for Shares in settlement of this DSU Award, Participant will have no rights as a shareholder of Corporation with respect to this DSU Award or the Deferred Stock Units.

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3.3           Shares to Be Reserved.  Corporation will at all times during the term of the DSU Award reserve and keep available such number of shares of Common Stock as will be sufficient to satisfy the requirements of this Agreement.

3.4           Notices.  Any notice to be given under the terms of this Agreement to Corporation must be sent to Corporation in care of its Secretary, and any notice to be given to Participant will be sent to Participant at the contact information given beneath Participant’s signature.  By a notice given pursuant to this Section 3.4, either party may designate different contact information for notices to be given.  Any notice which is required to be given to Participant will, if Participant is then deceased, be given to Participant’s personal representative if such representative has previously informed Corporation of his or her status and address by written notice under this Section 3.4.  Any notice will be deemed duly given when delivered personally or sent by facsimile transmission, e-mail communication or any other form of electronic transmission, or enclosed in a properly sealed envelope or wrapper addressed in accordance with this Section, deposited (with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service.  Such notice will be deemed effective at the earliest of the following:  (a) when received, (b) when transmitted by facsimile, e-mail, or other form of electronic transmission, (c) five days after its deposit in the United States mail, as evidenced by the postmark, if mailed postpaid and correctly addressed, and (d) on the date shown on the return receipt, if sent by registered or certified mail, return receipt requested.

3.5           Titles.  Titles are provided in this Agreement for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

3.6           Construction.  This Agreement will be administered, interpreted and enforced under the internal laws of the State of Oregon without regard to conflicts of laws of the State.

3.7           Conformity to Securities Laws.  Participant acknowledges that the Plan is intended to conform to the extent necessary with all provisions of the Securities Act of 1933 and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange Commission under such laws, including without limitation Rule 16b-3.  Notwithstanding anything in this Agreement to the contrary, the Plan will be administered, and the DSU Award is granted and may be exercised, only in such a manner as to conform to such laws, rules and regulations.  To the extent permitted by applicable law, the Plan and this Agreement will be deemed amended to the extent necessary to conform to such laws, rules and regulations.

3.8           Definition of Terms.  All capitalized terms used in this Agreement without definition have the meanings ascribed to such terms in the Plan.

RENTRAK CORPORATION
By
	Paul A. Rosenbaum
	Chief Executive Officer
[Name]
Contact Information:

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EX-31.1

EXHIBIT 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO RULE 13a-14(a)

I, Paul A. Rosenbaum, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Rentrak Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2006

By:	/s/ Paul A. Rosenbaum
	Paul A. Rosenbaum
	Chairman of the Board, President and
	Chief Executive Officer
	Rentrak Corporation

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

PURSUANT TO RULE 13a-14(a)

I, Mark L. Thoenes, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Rentrak Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 9, 2006

By:	/s/ Mark L. Thoenes
	Mark L. Thoenes
	Executive Vice President
	And Chief Financial Officer
	Rentrak Corporation

EX-32.1

EXHIBIT 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Rentrak Corporation (the “Company”) on Form 10-Q for the quarter ended September 30, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Paul A. Rosenbaum, Chairman of the Board, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)           The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Paul A. Rosenbaum
	Paul A. Rosenbaum
	Chairman of the Board, President and
	Chief Executive Officer
	Rentrak Corporation
	November 9, 2006

EX-32.2

EXHIBIT 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with the Quarterly Report of Rentrak Corporation (the “Company”) on Form 10-Q for the quarter ended September 30, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark L. Thoenes, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1)           The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ Mark L. Thoenes
	Mark L. Thoenes
	Executive Vice President
	and Chief Financial Officer
	Rentrak Corporation
	November 9, 2006